BHP to Inject $US267 Million in Queensland Coking Coal Mine

One of the leading mining companies of the world BHP Billiton (BHP) is planning to invest $US267 million in an attempt to speed up the development of its Queensland coking coal mine along with a terminal expansion. According to BHP, the fund will be used for procurement of long-lead-time items, feasibility study and preliminary project activities for the Caval Ridge mine and the Hay Point Coal Terminal Stage three extension. BHP Billiton Mitsubishi Alliance jointly owns the projects. It is to be mentioned that the BHP Billiton Mitsubishi Alliance is the largest exporter of coking coal of the globe. Coking coal is used by the steelmakers.

BHP stated that it is expecting to see around 5.5 million tonnes of production high-quality coking coal from the Caval Ridge project which is located in the Bowen Basin and an incremental 2.5mtpa from the Peak Downs mine. The annual capacity of the Hay Point Coal Terminal is expected to increase from 44mtpa to 55mtpa through the expansion of the terminal. The miner is expecting to get the final approval for the development of these projects following the completion of the feasibility studies, assumed to be during the third quarter of the year 2011, according to BHP Billiton. The world’s largest miner made an announcement in September that the process of government approvals had delayed the port expansion by two years. The company is now expecting to see productions from the mine from 2013-14.

It is to be mentioned that both BHP Billiton and Rio Tinto is expected to face close competition from Brazilian iron miner Vale in the iron market. Vale is believed to have the capability to boost its exports faster than the Australian miners. Vale’s market share in the iron ore industry dropped from 31 percent to 26 percent during 2007 as both Australian and Indian producers were enjoying cheaper transport costs because of being the closer to China.