John Byrne, chairman of Western Coal, said that the projects include expanding Brule to two million tonnes per year; developing an underground mine at Perry Creek, which will expand the operations at Wolverine to nearly 3 million tonnes; re-starting and expanding Willow Creek to a 1.8 million tonne producer of PCI and hard coking coal.
He added that the projects also include purchasing new equipment at the two mines, Maple Coal and Gauley Eagle, in West Virginia to their full potential of 1.8 million tonnes (or 2 million tons) and 1.4 million tonnes (or 1.5 million tons), respectively; and assisting Energybuild Group, in which the company has a 50.6% interest, to grow to 750,000 tonnes per year.
The company expects to initiate the development of both Brule and Willow Creek in the first half of calendar 2010. This allows Western Coal to take advantage of the recovery in world metallurgical coal markets, with spot prices for coking coal now over US$170 per tonne. Assuming the continued recovery in steel demand, the company expects next year contract coal prices to be higher.
John Hogg, president & CEO of Western Coal, said: “With current operations performing better than expected along with the expectation of higher coal prices in the near-term, we believe the time is right to expand our operations.”
Western Coal produces metallurgical and thermal coal from mines located in northeast British Columbia (Canada) and West Virginia (USA). The mines have the capacity to produce 7 million tonnes per year and have over 20 years of coal reserves. Western also owns a 50.6% interest in Energybuild which produces anthracite and thermal coals in South Wales (UK).
