Rio Tinto and its joint venture partners have approved the development of the $425 million Hail Creek coal project in central Queensland near Mackay. The project is based on one of the largest coking coal deposits in the world, with total resources estimated at 1.2 billion tonnes.

 

Chief executive of Rio Tinto Energy group, Greg Boyce, said conditions in the international coal market were right for the development of Hail Creek.

 

"Mine closures in Canada and an energy shortage in the US have provided a natural opening for a new mine like Hail Creek," Boyce said.

 

"Its low sulphur characteristics offer significant environmental advantages, which buyers have picked up on."

 

Rio Tinto said it had received strong support from buyers in Asia and Europe, with a letter of intent received for about half of annual output.

 

The proposed open cut coking coal mine is a joint venture between Rio Tinto's wholly owned Queensland coal subsidiary, Pacific Coal (92.00%), Marubeni (5.33%) and Sumitomo (2.67%). Pacific Coal will build and manage the operation.

 

"We have seen significant improvement in the production and financial performance of our Queensland coal operations," said Brian Horwood, managing director of Pacific Coal. "It is because of these improvements we have the confidence to invest in the world class resource at Hail Creek."

 

Once fully operational, the mine will produce 5.5Mt of high-quality hard coking coal every year for the export market, generating annual export earnings in excess of $400 million at current market prices.

 

The $425 million investment will include a dragline, mine infrastructure, wash plant and a 52-kilometre railway link to the Goonyella rail line.

 

Coal from Hail Creek will be railed 175km to the Dalrymple Bay Coal Terminal with first shipments scheduled for the third quarter of 2003.

 

Peabody raises $US420 million

 

Peabody Energy launched its initial public offering last week, raising $US420 million from the sale of 15 million shares at $US28 each. Peabody stock began trading on the New York Stock Exchange under the symbol "BTU".

 

Based on 49.6 million shares, Peabody emerged from the IPO with a market value of about $US1.4 billion. After first day trading share value had risen to $US36.80, a 31% gain.

 

Bob Cameron elected chairman of NSW Minerals Council

 

The NSW Minerals Council has elected a new chairman, Bob Cameron, managing director of Centennial Coal Company.

 

Cameron said he looked forward to working with other member companies, the NSW Government and other stakeholders on the key issues for the industry.

 

"The minerals industry is one of the state's major industry sectors, generating significant employment and benefits to regional communities and to the state. It is also an industry which places a high priority on improving health and safety and its standards of environmental management," Cameron said.

 

"The council will continue to work to provide a strong voice for the industry and to improve the regulatory framework within which we operate."

 

Cameron also thanked the council's outgoing chairman, Tony Haraldson, for his contribution.