Australian juniors developing new met coal mines in the province despite global glut
Despite a global glut of metallurgical or “met” coal that has shuttered mines in B.C., Australian junior mining and exploration companies have been moving into the province with plans for new mines – underscoring the view of industry analysts that the long-term demand for steelmaking coal is strong, particularly for B.C.’s high-grade coal.
Jameson Resources Ltd. (ASX:JAL) is among the handful of Australian junior miners that have recently been buying up claims in B.C.’s coal-rich Peace River and Crowsnest regions.
The company recently applied through the B.C. Environmental Assessment Office for a new open-pit mine 13 kilometres northeast of Sparwood, not far from Teck Resources Ltd.’s (TSX:TCK.B) Fording River and Coal Mountain met coal mines.
With a capital expenditure that Cannacord Genuity estimates at US$123 million to US$339 million, Jameson Resources’ Crown Mountain coal mine would produce an estimated 3.7 million tonnes per year over 16 years.
Although Jameson is headquartered in Perth, its chairman is David Fawcett, a B.C. mining engineer with an extensive history in B.C.
Meanwhile, Atrum Coal NL (ASX:ATU) is planning a new anthracite mine northeast of Stewart, and Riversdale Resources last year acquired the Crowsnest Pass Complex just across the border in Alberta.
Riversdale is best known in the industry for developing a coal play in Mozambique that Rio Tinto PLC (NYSE:RIO) acquired, only to take a US$3 billion bath when it walked away from the project due to problems with rail and port transportation.
Although Mozambique has high-quality coal, the country suffers from a lack of infrastructure, said Joe Aldina, an analyst for Wood Mackenzie. And that may explain why western Canadian met coal plays are viewed as more promising.
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