Wesfarmers to increase coal production
Wesfarmers Limited (WES) announced that export metallurgical coal production capacity from its Curragh mine would increase from 6.5 – 7.0 million tonnes per annum to 8.0 – 8.5 mtpa from late 2011 following approval by the Wesfarmers board to expand the mine. The company said under the terms of the agreement, Curragh would gain access to an additional 46 million tonnes of reserves currently held by Stanwell Corporation Limited in the Curragh North mining area.
Wesfarmers said a key element of the expansion was reaching an agreement with Stanwell, which would underpin the increase in Curragh mine metallurgical coal sales, subject to market conditions.
The company said Stanwell would benefit through a new export rebate formula linked to Curragh metallurgical coal sales above 7 mtpa.
Wesfarmers said the expansion would include the construction of a new stand-alone Coal Handling and Preparation Plant as well as mine infrastructure at a cost of $286 million and is expected to be completed by late 2011.
Managing Director of Wesfarmers Resources, Stewart Butel, said the expansion would further lift the long term prospects for Curragh and ensure that the company can take advantage of the forecast increase in seaborne metallurgical coal demand
“It will provide additional employment at the mine both during the construction phase and in the longer term,” Mr Butel said.
“Our customers will benefit from increased metallurgical coal supply and the Queensland State Government will receive higher royalty collections.”
Wesfarmers said it has contracted rail and port capacity in place to support the increase in metallurgical coal sales from the Curragh mine.
The company also announced director of its Industrial Divisions, Keith Gordon, is leaving the company to become managing director and CEO of Emeco Holdings Limited.
As at 1344 AEDT, Wesfarmers shares were up 69c to $27.38.
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