BHP Billiton Mitsubishi Alliance is Investing Over a Quarter of a Billion Dollars in Two Australian Coal Projects

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Brisbane-Australia based BHP Billiton Mitsubishi Alliance (BMA) is going to spend over a quarter of a billion dollars on two coal projects that are scheduled to be operational by late 2005. Based on the BMA's proposed plan, $67 million will be spent to develop the Broadmeadow coal deposit located in central Queensland (PEC 86000537) into a new punch longwall underground coal mine with an annual production capacity of 3.6 million ton of high quality coking coal. At the end of the two-year construction period, which began late last year, BMA will employ a workforce of around ninety people for the start-up Broadmeadow longwall coal mine.

The remaining $180 million will be spent on a new 14-million-ton per year coal preparation and handling plant at the Blackwater open-cut coal mine located 24 kilometers south of the town of Blackwater, Australia. The new plant will centralize onsite coal processing, which is now being handled through three coal preparation plants - the Blackwater CPP, South Blackwater CPP, and thermal crushing plant. The thirty-seven year-old Blackwater mine, the largest open cut coal mine in Australia, uses six draglines, a rope shovel, rear dump trucks, hydraulic excavator, front-end loaders, a hydraulic shovel, and coal haulers. Although construction employment at Blackwater is expected to peak at 400, the operational workforce will actually reduce by 72 full time employees, and a majority of these positions will be phased out at the end of construction. The two-year construction period is expected to commence by midyear.

BMA, an alliance created between BHP Billiton Limited (BHP: NYSE) and Mitsubishi Development Pty Limited (MDP) in June 2001 is Central Queensland's largest private employer. MDP is the Australian wholly owned subsidiary of Mitsubishi Corporation (OTC: MSBHY: PK). BMA currently employs 4,400 people will an annual pay roll of $334 million. It owns seven Bowen Basin coal mines (Blackwater, Goonyella Riverside, Gregory Crinum, Norwich Park, Peak Downs, Saraji, South Walker Creek) and the Hay Point coal export terminal near Mackay, Queensland. Under the BMA arrangement, the two parent companies share equal ownership and management. With a production capacity more than 50 million tons of coal (coking & thermal) a year, exported to more than 60 customers in 20 countries, BMA is positioned as the world's premier mega-supplier. Coking coal is use for manufacturing steel, and thermal coal is use for generating electrical power and for more general industrial use. By the end of 2005 this capacity will increase with the commission of the broadmeadow mine.