BHP Billiton (BHP) officially opened its $US3.4 billion Caval Ridge coking coal export mine in Queensland yesterday, two days before the Chinese government brings back import duties on coking and thermal coal.
The timing of the two is coincidental, but not fortuitous for BHP and its partner, Mitsubishi.
The Chinese move will a 3% duty to hard coking coal of the type produced at the mines in Central Queensland. A 6% import duty will apply to thermal coal.
The duties mean the Australian price will effectively fall by between $US3 and $US6 a tonne depending on the coal type.
Caval Ridge Mine is the BHP Billiton Mitsubishi Alliance’s (BMA) eighth mine in the rich Bowen basin in Central Queensland. It is already producing coal and will build towards an initial maximum capacity of 5.54 million tonnes a year of hard coking coal. The mine came in under budget and three months early.
BHP’s coal boss, Dean Dalla Valle said in a statement yesterday the official opening was an opportunity for BHP Billiton and Mitsubishi to showcase a world class new mine in Queensland, which will contribute to Australia’s coal export industry.
“Today’s opening of the Caval Ridge Mine is a significant milestone for BHP Billiton. The operation will produce metallurgical coal for the steel industry and has been constructed with the latest technology to be one of the most productive, sustainable and highly performing metallurgical coal mines in the world,” he said.
“Since commencing operation, the Caval Ridge team has already achieved an Australian record for the amount of overburden moved by a shovel in one week.”
Mr Dalla Valle said “Caval Ridge Mine’s 500 strong workforce commute from Cairns and Brisbane, include 21 per cent females, three per cent Indigenous and 43 per cent new-to-industry employees. We have invested considerably in recruiting and training new entrants to the coal industry who will work alongside some of our experienced operators,” he said.
Caval Ridge is a twinned mine with the nearby Daunia operation which opened 13 months ago and cost $US1.4 billion and produces 3.4 million tonnes of coking coal a year.
BHP YTD – BHP ignores coal woes opening Caval Ridge
Three weeks BHP announced that 700 jobs were being cut at other coal mines operated by the two companies because tough market conditions were threatening the viability of the business.
Queensland government figures released yesterday show that the state’s coalminers exported a record 158.5 million tonnes in the January-September period, up 12% from the same period in 2013.
BHP’s coal portfolio in Queensland includes seven BMA mines, the Hay Point Coal Terminal, as well as two BHP Billiton Mitsui Coal (BMC) coal mines, South Walker Creek and Poitrel, operated by BHP Billiton.
BHP shares rose 0.9% yesterday to $32.60.
A 1.7% rise in the iron ore price over the weekend helped, with the price rising above $US80 a tonne for the first time in more than a month.
