Less Gloom More Local Growth

WHILE there has been a 26 percent rise in thermal coal prices since May the resurgence may be short lived caution analysts.

An industry analyst said there was an expectation China’s local coal production would come back online in the forth quarter.

“Coal was oversold and prices fell too far, but we’ve reached a stage where the Chinese had curtailed some of their production and suddenly people were looking at their wharf in China and realised they needed more coal and that caused a turn around,” said the industry analyst.

“But there is an expectation that China might loosen its grip on coal production or let some of the higher quality mines increase output again and that could push the coal price back down, so it might be a short burst of cheerfulness,” they said.

The rise in thermal coal price is expected to continue to be buoyant in the third quarter due to the coal provenances in China coming out of their wet season and also the government imposed restrictions of working 276 days a year, which has curtailed their domestic production.

The expectation is the coal price will lower during the fourth quarter of the year once the Chinese domestic production comes back online.

However, on the local front Mt Pleasant and Dartbrook mines are laying the ground work for production which will create hundreds of new local jobs in the coal industry.

Earlier this month Rio Tinto finalised the sale of Mount Pleasant to MACH Energy Australia.

MACH Energy is currently building infrastructure on the site and aims to have first production coal by the end of 2017.

They anticipate there will be 500 to 600 workers required to develop the mine and 200 to 350 to operate the mine.

Australian Pacific Coal is also preparing to restart operations at Dartbrook mine and pending finalisation of the sale from Anglo American could begin producing coal in 2017 and will require 100 to 150 employees.

Australian Pacific Coal also has plans to apply for the mine to become an open cut operation.

Related Stories:

• Final Steps of Dartbrook Acquisition – June 8, 2016.
• Dartbrook Estimates 1.2 billion tonnes – May 25, 2016.
• Preparing to Operate Dartbrook – April 6, 2016.
• Dartbook Development – February 3, 2016.
• Dartbrook Mine – Jan 11, 2016.