Coking coal and thermal coal is produced by Mitsui at its Moura and Theodore coal mines in Queensland through a joint venture that is 49% owned by the Japanese trading house and 51% by Anglo Coal Australia, a subsidiary of U.K.-based Anglo American plc. The partners will together spend $800 million on the expansion, according to The Australian.
Almost all of the increased output will be exported to Japan, in the form of coking coal to steelmakers and thermal coal to power companies, to satisfy the nation's hunger for the material, Japanese business news website Nikkei Net reported on Wednesday.
The companies said they intended to establish two additional operations on adjacent tenures to the Moura mine, with the new and expanded operations to be known as the Dawson Complex.
A new coal preparation plant will be built, additional mining equipment bought and a coal conveying system and rail load out facilities added.
The completion of the Dawson Complex project is expected by late 2006 with additional coal available for the market in 2007. The operation will produce 7.1Mtpa of high-grade coking coal and 5.6Mtpa of steaming coal.
Since Japan’s consumption of coking coal tops 60Mt a year, the added production translates into 5% of the current demand, Nikkei reported.
Mitsui hopes to take advantage of market conditions by supplying more coking coal to Japanese steelmakers. Second-ranked Mitsui Japanese trading house also hopes that increased coal exports will enable it to take on Mitsubishi Corp. Mitsubishi, the leading Japanese coking coal supplier, has been enjoying solid earnings thanks to strong demand for the material.
The news comes on the same day as South Korean steel giant Posco announced it plans to buy 5% stakes in two Australian coal mines, at Carborough Downs in Queensland and Glennies Creek in New South Wales.
The company, which is the world’s fifth largest steel producer, announced that it expected to sign the stake acquisition contract with US mining firm American Metals & Coal International by January.
