Outlook Promising for Australia's Mining Exports

Researched by Industrial Info Resources Australia (Perth, Australia)--The recent approval of a $950 million export facility at the Bunbury Port Inner Harbour, Western Australia, will see the major southwest coal mining company Lanco Infratech Limited (NSE:LITL) (Gurgaon, India) initiate a four-fold expansion of its Griffin Coal Mine activities, in order to export between 10 million and 12 million metric tons.

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The upgrades come after a three-year approval process and will include a storage facility; conveyors; rail loop; train-unloading and ship-loading facilities; roads; and other supporting infrastructure. The expansion will allow other companies to use the remainder of the facility's 15 million-metric-ton-per-year export capacity. Markets most likely will include South Korea, China, the Philippines, Bangladesh, Pakistan and India.

Lanco Infratech's decision to expand the Bunbury Port would provide for a more sustainable coal industry in Western Australia. The increase in production also could double the workforce of the Griffin Coal Mine.

The addition is scheduled to be completed in 2016, along with that of the Fitzroy River Coal Terminal, based in Rockingham; together, the projects will allow Australia to export an additional 25 million metric tons of coal.

Assuming the Abbot Point Coal Terminal Expansion goes ahead, Australia will be able to provide emerging markets with up to 172 million metric tons of coal by 2017.

The increase in Australia's export capacity is becoming clearer as the Australian mining industry gradually transitions from a heavy construction phase to one more focused on production and productivity improvement. When the transition has been fully established throughout Australia, the country will be able to export up to and beyond 500 million metric tons of coal by 2018--a number that may change, depending on future expansions and additions.

Australia's export capability for all commodities is increasing. By 2015, Australia aims to increase export capacity for all commodities by more than 520 million metric tons of ore. In 2016, this export capacity will be increased by 204 million metric tons, followed by an additional export capacity increase of 420 million metric tons by 2017. By 2018, Australia is forecast to have an export capacity of 1.125 billion metric tons commodities to the emerging Asian marketplace.

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