Speaking to International Longwall News, Talbot Group director of resources Denis Wood said PBS Coals had approached Talbot Group to get involved and described the deal as a “compelling” opportunity.

“We’ve seen an opportunity and we took it,” Wood said.

So far PBS Coals is Talbot’s only investment in the US but Wood told ILN the group was looking at others.

“We do have others in the pipeline but they are not public at this stage,” he said.

“We see the east coast of America as being highly potential at the moment.”

Wood said with the rising costs in mining the weakening US dollar made the US competitive and he saw no reason why it could not stay that way.

Earlier this week Australian coal stalwart and Talbot Group director Ken Talbot sold most of his stake in his flagship Macarthur Coal to Korean and Indian steelmakers before announcing his move into the US.

Wood said PBS was doing well with a solid cost structure but that Talbot had been approached partly on reputation to increase the capacity of PBS’s group of mines.

“They came and saw us and asked us to get involved,” Wood said.

“The two biggest shareholders in that system are investors, not mine operators, and they wanted to get a reputable mine operator in there, someone with experience.

“They are very good at doing what they are doing but to get that thing up double or triple the capacity over the next few years will take some effort and that is what we will be targeting.”

Wood said the real value of the PBS mines would come from an expansion of their capacity and he planned to get actively involved in the mines’ operation.

When asked how he planned to triple the PBS coal mines’ capacity Wood said: “That is a million dollar question at this stage but I am comfortable we can do it – I’ve been to site and I have had a look at it firsthand and I am very comfortable we can expand it.”

The PBS mines are close to port and rail and the Talbot Group has identified them as having huge export potential.

“The most important thing is that they have a huge amount of infrastructure – this project has access to two rail networks, to Baltimore and North Oak Ports, which are all under-utilised,” Wood said.

“We intend to use all of that asset that we can by expanding the production as quickly as we can.”

PBS is currently producing 1.8 million tonnes of product coal and has long-term domestic contracts.

The increased production is earmarked for export markets in Europe and Brazil.

Wood was bullish about increasing the capacity of PBS’s 13-odd bord and pillar mines.

“We are going to push it as far as we can,” he said.

“If we could double or triple it today there is a market for it.

“So you have to do it while the market is there – who knows if it will be there in five years time.”

Later this year PBS will be listed on the Toronto Stock Exchange as its two other major investors holding 19.9% are located in Canada.