with an exploration targe in the several billions REY should be...

with an exploration targe in the several billions REY should be thinking big!! like this coal mine in colombia...



BHP, Anglo, Xstrata Ship Coal 10,000 Miles to China (Update2)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Heather Walsh

March 12 (Bloomberg) -- BHP Billiton Plc, Anglo American Plc and Xstrata Plc are shipping coal 10,000 miles to China from their Cerrejon mine in Colombia for the first time this year because of surging demand and rising prices in Asia.

Cerrejon, the world?s largest open-pit mine of coal for export, started shipping fuel through the Panama Canal and on other routes to China after prices became ?much better? than those in Europe, Leon Teicher, the venture?s chief executive officer, said in an interview. Cerrejon may also make its first sales to India this year, he said.

China?s accelerating economic growth is stoking demand for coal to fuel power plants and steel mills. Prices 45 percent above Europe make it worthwhile to transport the fuel to ports that are twice as far as European harbors such as Rotterdam. China?s coal imports tripled last year to 126.6 million metric tons, according to the China General Administration of Customs.

?There is a transition,? Teicher said in a March 10 interview in Bogota. ?Prices in the Pacific are much higher than they have ever been relative to Europe.?

Thermal coal used by power utilities rose 22 percent in the 12 months through March 5 to $107.70 per ton in Qinhuangdao, a port in northeastern China, from $88 a year ago, according to data from McCloskey Group Ltd. The price was 45 percent higher than the $74.40 for coal delivered to northwestern Europe.

Chinese Growth

China will be a net importer of coal this year even as its own output climbs, Teicher said. The nation?s gross domestic product expanded 10.7 percent last quarter, the fastest since 2007. Last week, central bank Governor Zhou Xiaochuan said policies to stimulate the economy must end ?sooner or later.?

?I don?t believe that China is a bubble,? Teicher said. ?China has arrived.?

An ?important? share of Cerrejon?s exports may be sent to Asia this year, he said, without providing an estimate. Coal prices will be stable or rise on demand in Asia, Teicher said.

China is the world?s largest user and producer of coal. The country will probably stop being a net importer of the fuel in 2011 as new production comes online, Huainan Mining Industry Group Co. President Kong Xiangxi told reporters today in Beijing.

Output at Cerrejon, on the northeastern edge of Colombia, will rise to between 31 million and 32 million tons of coal in 2010, after falling last year as demand waned in Europe, he said. BHP, Anglo American and Xstrata each own a third of the mine.

Mine?s Capacity

Annual output capacity may be expanded to 40 million tons at a cost of $800 million to $1 billion once ?the market will take that expansion,? Teicher said. ?Right now is not yet the time.?

Capacity may reach 60 million tons, Teicher said, without providing a timeframe.

Last year, Cerrejon sold most of its coal to Europe, the U.S. and Latin America. Demand in Europe remains ?depressed? because of weak economic growth and as the region draws on stockpiles of coal purchased prior to the downturn, he said.

To contact the reporter on this story: Heather Walsh in Bogota at