100-year-old Australian mine given a second chance
New Delhi-based Jindal Steel & Power Ltd. has increased output at the 100-year-old Wongawilli coking coal mine in the Australian state of New South Wales.
The move comes in the face of unexpectedly high coal prices since the beginning of the year, despite analysts predicting that the high wave won’t last for long. As MINING.com reported, prices of coking coal have risen almost 150% to $14.80 per tonne due to slowing supply growth from China. As a result, metallurgical coal has become the best performing commodity of 2016 and it's trading at $195.70 a tonne.
Jindal Steel & Power Ltd. is also planning to resume operations at another mine in Australia and one in Mozambique, as prices for the commodity have more than doubled this year.
In light of these developments, Jindal re-started Wongawilli's operations in July after it spent two years on care and maintenance. Activities at this site began originally in 1916. The mine is now producing about 100,000 tonnes of coal a month.
“Our mines have zoomed into action,” chief executive officer Ravi Uppal told Bloomberg. He predicts that coking coal prices will remain high for the next six months. Thus, his company has also sought regulatory approval for resuming output at the Russell Vale mine in the same eastern area of the country.
Uppal also stated that Jindal will need large amounts coking coal by December when its 4 million tonnes-a-year blast furnace in Odisha-India starts operation. Currently, the giant uses it for its 1.7 million-tonnes-a-year blast furnace in the central state of Chhattisgarh.
Jindal is one of India’s largest steel producers, but has reported seven consecutive quarterly losses and is counting on its steel and mining operations to help generate profits. The company’s shares in Mumbai have lost almost 16% so far this year, compared with an 8.5% gain for the benchmark S&P BSE Sensex index.