Anglo American kicks off expansion of coal mine in Canada

Diversified mining giant Anglo American (LON: AAL) has began working on a $200-million expansion of its Trend coal mine in northeast British Columbia, hoping the location will help the company win more contracts from steel makers in Asia.

Anglo has budgeted $50-million for the first phase of the multiyear project to boost output of coking coal, a key ingredient in the production of steel. The expansion, named the “Roman Project,” will extend the mine's life by 16 years, boosting its output from 1.5 million tonnes per year of metallurgical coal to 2.5 million tonnes.

CEO Mark Cutifani said in a statement the project was an important milestone in Anglo’s strategic plans to grow its metallurgical coal output in Canada.

The expansion is happening despite coking coal prices have dropped over 50% in the last two years, to US$147 a tonne.

Anglo American, which wholly owns the B.C. project through its Peace River Coal Inc. subsidiary, also operates six coal mines in Australia.

The company said it expects the second phase of the project to be permitted by the end of this year, and to complete the Roman expansion by the first quarter of 2014.