xstrata chief sees coal rebounding, page-5

There's a very negative article in today's Australian about Wandoan, Surat and Cockatoo.

Personally, I feel that Xstrata's Wandoan project will not be delayed since it will take them 4 years to construct but who knows what they are thinking? All forecasts on coal demand 4-7 years out from now indicate that there will be huge demand for a number of reasons.

Glencore/Xstrata merger vote is on 7 Septemeber. We will find out after that I reckon about the plans Xstrata has for Wandoan. It has been reported that a successful merger of the two companies will mean a definite delayed start up of Wandoan.

As you may be aware Peter Freyberg, CEO of Xstrata Coal Wandoan has recently stated

"a coal recovery is likely coming in 2013, and will be “underpinned by rising oil prices and a reduction in exports from the US, where some producers [are] now ‘out of the money’, and Colombia, due to industrial unrest."

He also said that

"I think the market probably bottomed about a month ago and there’s been steady improvement over the last four or five weeks, where we’ve seen thermal prices increasing by US$ 5 or US$ 6 in the spot market."

So why would they delay the Wandoan project if they see thermal coal prices improving?