London, England — MININGREVIEW.COM — 25 July 2008 – The Rio Tinto mining group – fending off a hostile US$142 billion (R1 140 billion) takeover bid from mining giant BHP Billiton Limited – plans to double coal output by 2015 to meet increased demand, and says the outlook for its energy and minerals businesses remains strong.
Bloomberg News quotes Preston Chiaro – head of Rio’s energy unit, which is based here – as saying: “There are strong outlooks, supported by sustainable fundamentals.” In a presentation lodged with the Australian stock exchange, he added that growth in coal-fired power generation in India and China would require significant coal imports.
“Rio’s output of coking coal – used to make steel – will increase to 15.2 million metric tonnes a year, and thermal-coal output could rise to 49.2 million tonnes by 2015,” said Chiaro. Rio produced 6.2 million tons of coking coal last year and 24.4 million tons of all other coal from Australian mines, according to its annual production report in January.
Bloomberg reports that mining companies, including Xstrata plc – the world’s largest thermal coal exporter – won a 125% gain in contract prices to US$125/tonne in the year that started on April 1. Analysts are predicting that the price may rise next year to US$150 a ton because of supply constraints.