THIS MONTH IN COAL: Australia's Dalrymple Bay Expansion Wins Approval

Engineering and Mining Journal, Nov 2006

Babcock & Brown Infrastructure Ltd., owner of Australia's second-largest coal export terminal, will invest about A$639 million (US$485 million) to expand the terminal after the project won approval from a regulator, The Star reported. The expansion will take capacity at the Dalrymple Bay coal terminal to 85 million metric tons a year (mtpy) by the end of 2008, Sydney-based Babcock & Brown Infrastructure said during late October. The Queensland Competition Authority's approval of the project follows a similar approval in August for an A$532 million initial phase of the expansion, which will take coal-handling capacity at the north-eastern Australian port to 68 million mtpy by the end of 2007. The port handles coal produced by miners such as Xstrata Plc, Rio Tinto Group and Macarthur Coal Ltd.

Chile Prepares to Tender Coal Concessions

The bidding rules for the Isla Riesco coal concessions and the Boquerón Chañar iron ore mine in southern and north-central Chile, respectively, are in the final approval process, said a SEP (Sistema de Empresas Públicas) spokesperson. According to BNamericas, SEP administers state development agency Corfo's participation in state companies and handles the sale of the state agency's mining assets. The organization has been preparing the tenders, scheduled for this year, of the Rí Eduardo and Elena coal concessions covering 2,900 ha in Isla Riesco in Region XII, and the Boquerón Chañar iron ore mine in Region III, which includes the Chañar and El Paico mining concessions.

Chinese Plants Get Upgrade After Acid Test Failure

Four of Shanghai's decades-old coal-fired power plants will be closed, moved or upgraded to cut back on sulphur emissions that cause acid rain, Shanghai Daily reported. The plants, the oldest of which was built in the 1880s, use out-dated generators not fitted with desulphurization devices, according to the Shanghai Electric Power Co., Ltd., operator of the city's nine power plants. Sulphur pollution in the city has increased in the past few years amid growing demand for fossil-fuel energy, and has contributed to rising levels of acid rain, according to the bureau, which has urged power plants, the biggest sources of sulphur pollution, to reduce emissions. The city aims to limit sulphur discharges to 134,000 tons a year by 2010, down from 306,000 tons last year. Shanghai Electric Power said its plans for the four plants would reduce emissions and also increase capacity by almost 1 million kw.

Low-Grade Coal's Abundance Hurting Canadian Coal Exports

An abundance of lower-grade coal on the world market is hurting the bottom line at Fording Canadian Coal Trust, CEO Jim Popowich said. "We've seen a shift in the global supply balance due to the increased use of lower-quality, lower-priced coals" in integrated steel mills. According to The Montreal Gazette, that has made it tougher to sell the metallurgical coal that is Fording's key asset. Fording holds a 60% interest in the Elk Valley Coal Partnership, the world's second-largest exporter of the high-grade coal, which is primarily used in steelmaking. Elk Valley sales contracts for 2007 are not yet complete, but analysts are forecasting lower prices for the premium, high-coking coal, which jumped up as high as US$125/ton in 2005. It was at US$109/ton in the third quarter. Fording said it expects coal prices to average $107/ton for the next six months. Third-quarter coal prices were $109/ton, $2 higher than the expected price, because of a small carry-over of 2005 tons. Those contracts are now complete. Inventory was also decreased to 2 million metric tons in the quarter, meeting targets.

Asia Gold Gets More Time to Complete Mongolian Coal Acquisition

Asia Gold and Ivanhoe Mines have agreed to allow more time to complete their pending Coal Transaction, under which Asia Gold will acquire the coal division of Ivanhoe Mines in consideration for the issuance of common and preferred shares. The agreement gives the companies additional time to fulfill certain conditions that are required to close the transaction, including completion of the transfer of certain mineral exploration licenses in Mongolia that currently are held by Ivanhoe. Asia Gold has been advised by Ivanhoe that during the past month the Cadastral Office of the Mineral Resources and Petroleum Authority of Mongolia accepted applications filed by Ivanhoe to transfer the ownership of Ivanhoe's portfolio of coal licenses in accordance with the provisions of the Mongolia's revised Minerals Law.