XCBC owns the First Coal Corp. leases, acquired by Xstrata Coal in August 2011, representing more than 100,000 hectares of contiguous coal licenses and applications; the Lossan coal deposit acquired by Xstrata Coal in October 2011; and the Sukunka coal deposit (See related World News story on p. 6). Xstrata will develop, operate and manage the assets on behalf of the joint venture. In addition to its 25% interest, JX Nippon will be the exclusive marketing agent for First Coal and Sukunka coal sold into Japan.
“JX and Xstrata Coal have built a strong relationship over the years via our Oakbridge joint venture in Australia,” said Yasushi Kimura, president, JX Nippon. “This opportunity has great significance for JX as it marks our entry into the hard coking coal market. Our existing coal business focuses on the supply of thermal coal to utility companies, and this joint venture enables a full-scale expansion of our business into hard coking coal, which is essential for steel manufacturing. Xstrata Coal has a strong track record of developing projects and extracting maximum value from coal assets, which will prove invaluable as we build a significant new business that will contribute to the long term stable supply of hard coking coal.”
Technical studies indicate the two most advanced XCBC projects, Sukunka and Suska, have the potential to produce up to approximately 9.5 million metric tons (mt) per year. The majority of this production is expected to comprise hard coking coal with the balance expected to be PCI coal. Xstrata Coal has combined the project, formerly known as Lossan, with neighboring First Coal tenements to create an expanded open cut coal project, now known as the Suska coal project, of significantly larger scale. “Our consolidation of the First Coal, Lossan and Sukunka assets since August 2011 will enable Xstrata Coal to increase our exposure to metallurgical coal further,” said Peter Freyberg, CEO, Xstrata Coal.