Rio Tinto nearly doubles coal reserves at Wyoming mine

0 Comments | Deseret News (Salt Lake City), Dec 17, 2004 | by Bloomberg News

Rio Tinto Group, the world's third-largest mining company and parent of Kennecott Utah Copper, increased coal reserves at its Antelope mine in Wyoming after buying the West Antelope land near the project for $146.3 million.

The purchase will almost double coal reserves at the site to 400 million short tons, the Anglo-Australian company said in a statement to the Australian Stock Exchange. The company had about 1.5 billion tons of U.S. coal reserves prior to the purchase, spokesman Ian Head said.

Rio Tinto owns six coal mines in the U.S. in Wyoming, Colorado and Montana. The company bought the West Antelope tract from the U.S. government, Head said. Antelope currently produces 30 million short tons of coal a year, the company statement said.

Rising electricity demand in the U.S. has prompted more purchases of thermal coal, the fuel used in power stations, and allowed producers to raise prices. Peabody Energy Corp., the largest U.S. coal producer, in the third quarter raised prices for the coal it sells to U.S. utilities by 5.1 percent.

"With strong energy demand growth, high gas prices and minimal new nuclear and hydro capacity, North American coal continues to be an important part of the U.S.'s mixed energy portfolio," said Bret Clayton, president of Kennecott Energy Co., Rio Tinto's U.S. unit.