HomeEnergy MineralsAnglo expects strong coal prices

Anglo expects strong coal prices

Anglo Coal head
Norman Mbazima
Landau coal mine, South Africa — MININGREVIEW.COM — 13 April 2010 – The chief executive of Anglo Coal “’ mining giant Anglo American’s coal unit in South Africa “’ says he expects coal prices to remain strong, while exports would match last year’s despite rail constraints.

Making this prediction here during a media visit to the Mpumalanga mine, Anglo Coal head Norman Mbazima told journalists he expected the price of coal to be around US$85 per tonne this year. Richards Bay Coal Terminal’s free on board prices have been around US$82 to US$85 per tonne for the past month.

“Those are exciting prices and we think they will be maintained,” Mbazima added. He said that he also expected the company to export around 16 million tonnes of coal, unchanged from last year, despite railing hitches to the export terminal.

Coal exporters have said that rail hitches to the Richards Bay Coal Terminal “’ the continent’s largest export terminal “’ have been blamed for low coal deliveries.

The terminal “’ owned by South Africa’s largest exporters of the fuel, including BHP Billiton, Anglo and Xstrata plc “’ is serviced by the railway arm of the logistics group Transnet .

Transnet’s rail division said earlier this year that it expected to transport 65 million tonnes of export coal to the port this year and would try to raise that to 70 million tonnes.

Mbazima revealed that the company was seeking to exploit thermal coal opportunities in Indonesia, Australia and Colombia. “We are looking at global growth opportunities for the seaborne market,” he said. He added that Anglo Coal planned to increase coal exports to India this year from last year’s 4.9 million tonnes.

Mbazima went on to say that the coal producer was also looking to facilitate the development of a power station using its own discarded or waste coal. The power plant could produce about 300 megawatts of electricity to be used for Anglo’s operations in South Africa, including its platinum and iron ore mines.

He pointed out that there was enough waste coal “’ left over after the processing of coal destined for export “’ for the life of a power station of around 40 to 50 years. He said the company did not plan to finance, build or operate the station, but hoped to attract an independent power producer to do so.

“We will be providing the power purchase agreement to say that if you come in, build this plant and run it, we will buy the power for the next forty years, and we will provide the fuel,” Mbazima explained.