BHP Billiton Opens New Queensland Mine - Analyst Blog
06 September 2013 - 4:00AM
Zacks
Mining giant, BHP Billiton
Limited (BHP), recently opened the Daunia mine, the ninth
operating metallurgical coal mine in central Queensland, Australia.
The Daunia mine is founded as a 50-50 joint venture between BHP
Billiton and Mitsubishi Development Pty Ltd., a wholly-owned mining
subsidiary of Japan-based Mitsubishi Corporation
(MSBHY).
The construction of the Daunia mine
started in 2011 and was completed in July this year. The mine is
capable of producing roughly 4.5 million tonnes of metallurgical
coal per annum with a useful life of 30 years. Apart from the $1.4
billion invested in the mine, the joint venture has invested
roughly $7.7 billion for major projects in Queensland over the past
three years. Currently, the joint venture operates seven coal mines
in the region, which will increase to eight next year, with the
completion of the construction of Caval Ridge mine.
Queensland coal operations are a
major contributor to the company’s revenues. BHP Billiton has
various expansion plans on the anvil to tap the immense growth
potential of the region. Another expansion plan in the region, Hay
Point Stage Three Expansion project, is expected to start in
2015.
BHP Billiton’s share of
metallurgical coal production reached 38 million tonnes in fiscal
2013, increasing 13.0% year over year. Metallurgical coal
production for fiscal 2014 is expected to increase to approximately
41 million tonnes. However, with the start of Daunia mine and the
scheduled commissioning of Caval Ridge mine, BHP Billiton’s total
Queensland coal business capacity will increase to 66 million
tonnes per annum by the end of 2014.
The new mine will also contribute
to its corporate social responsibility with new jobs. As much as
450 jobs will be created with the start of the mine, with roughly
100 positions for female candidates. We believe such strategies
from the company will not only improve its financial health but
also enhance its credibility in the market.
BHP Billiton currently carries a
Zacks Rank #3 (Hold). Other mining stocks that warrant a look
include Denison Mines Corp. (DNN) and US
Energy Corp. (USEG). Both the companies carry a Zacks Rank
#2 (Buy).
BHP BILLITN LTD (BHP): Free Stock Analysis Report
DENISON MINES (DNN): Free Stock Analysis Report
MITSUBIS CP-ADR (MSBHY): Get Free Report
US ENERGY CP-WY (USEG): Free Stock Analysis Report
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