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VANCOUVER — Anglo American PLC is expanding its northeastern B.C. mine, betting that the quality of the coal and the ease of transport to Asia will help the company win more contracts from steel makers in Japan, China and others in the region.
London-based Anglo American, one of the world’s largest mining companies, will make the expansion announcement Thursday at its operations near Tumbler Ridge, B.C., about 700 kilometres northeast of Vancouver.
The company has budgeted $50-million for the first phase of a $200-million, multiyear project to boost output of coking (or metallurgical) coal, a key ingredient in the production of steel.
Seamus French, head of Anglo American’s metallurgical coal division, said in an interview that its Tumbler Ridge coal is high quality, and that the rail line transporting it to the port of Prince Rupert for export is underutilized. “We see fantastic long-term potential,” he said in an interview, adding that the mining expansion will provide employment security for the 420 Anglo American workers in B.C. as well as generate 100 construction jobs.
Mr. French and Mark Cutifani, an Australian who was appointed Anglo American’s chief executive officer in April, will be at the Roman mine site to unveil details of their company’s decision to ramp up production.
The expansion is occurring even though coking coal prices have plunged more than 50 per cent over the past two years, to $147 (U.S.) a tonne.
Current output of 1.5 million tonnes a year of metallurgical coal at the B.C. venture is expected to rise after the initial expansion is completed in the first quarter of 2014, clearing the way for a production rate of 2.5 million tonnes annually, Mr. French said. Total output may rise to as much as four million tonnes a year in subsequent phases.
Mr. Cutifani’s move to expand the company’s lone Canadian coal mine follows a series of setbacks over the past year in the global mining sector, which has been hard hit by sharp falls in prices for commodities, such as gold, silver and coal. Vancouver-based Teck Resources Ltd. decided three weeks ago to delay restarting its Quintette coal project, also located near Tumbler Ridge.
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