BHP Billiton has made its first sizeable coking coal investment approval in years, signing off on a $US200 million investment in a conveyor belt linking its Peak Downs mine to its Caval Ridge processing plant, in Queensland’s Bowen Basin.
The move will boost production by two million tonnes of coal a year and reduce the cost of another two million tonnes that is currently being trucked between the two mines.
The investment will mean the full capacity of the Caval Ridge plant is used. It will create up to 400 construction jobs, 100 new operational roles and make permanent another 100 jobs currently trucking coal from Peak Downs, that now rely on healthy coal prices for them to continue.
The low-cost expansion comes as coking coal prices soar in the wake of Cyclone Debbie. But the company (BHP) says that this has had no impact on the decision, which is designed to feed long-term demand.
“We do expect that, over time, prices will come back from the spike we’ve seen, but coking coal is a non-substitutable commodity,” Mr Henry said.
“As developing economies continue to grow they are going to need more steel and if they are going to produce steel, they are going to need coking coal and we are sitting on the best resources globally.”
BHP coking coal boss Ragg Udd said the investment would be profitable at all stages through the coal cycle.
The Caval Ridge Southern Circuit is an 11km conveyor system that will move four million tonnes of coal a year from Peak Downs to the Caval Ridge coal plant.
The plant, which has capacity of 10 million tonnes, is now taking six million tonnes of coal a year from the Caval Ridge mine and will soon be taking two million tonnes of coal that is being trucked from Peak Downs.
Construction will start in the middle of 2017 and take 18 months to complete.
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