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Anglo American approves Grosvenor project

Anglo American has announced Board approval of its 5 mtpa Grosvenor metallurgical coal project in the Bowen Basin of Queensland, Australia.
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The greenfield Grosvenor project is situated immediately to the south of Anglo American’s Moranbah North metallurgical coal mine and is expected to produce 5 mtpa of metallurgical coal from its underground longwall operation over a projected life of 26 years.

Capital expenditure for the Grosvenor project is forecast at US$1.7B on a nominal basis, representing a highly competitive capital intensity ratio for the project, the company said.

The Grosvenor project is 100% owned by Anglo American and forms a major part of the group’s strategy of tripling production of metallurgical coal from its Australian assets by 2020 using a standard longwall and coal handling and preparation plant (CHPP) design model.

In its first phase of development, Grosvenor will consist of a single new underground longwall mine, targeting the same well understood Goonyella Middle coal seam as Moranbah North, and will process its coal through the existing Moranbah North CHPP and train loading facilities.

A pre-feasibility study for expansion by adding a second longwall at Grosvenor is under way.

Grosvenor is expected to benefit from operating costs in the lower half of the cost curve. Synergies are also expected from the integration of Grosvenor with Moranbah North, including from blending and yield improvement, while a continued focus on improving longwall productivity to 100 cutting hours per week across the business’ underground operations will deliver further value, Anglo American said.

Seamus French, CEO of Anglo American’s Metallurgical Coal business said: “We are excited to be developing the first growth phase of our planned Moranbah hub which will drive our target of 12% compound annual production growth by 2020. Grosvenor and the wider hub will produce some of the highest quality coking coal in the world and represents a major investment commitment for the region.

“Our longwall design model will enable us to replicate our approach across our expansion footprint, ensuring the transfer of best practice project efficiency, cost control and risk mitigation. We have also now received confirmation of our development rights from the Queensland government for the expansion of the Abbot Point coal port – a dedicated export facility that would have the capacity to accommodate the growth from our Moranbah hub.”

First development coal from Grosvenor is expected in 2013 and the commissioning of the longwall in 2016. Such project timings are contingent upon the receipt of the appropriate licences and permits. Grosvenor has received approval of its Environmental Impact Statement, the project’s Environmental Authority is in train and the key Mining Lease is anticipated in Q1 2012.

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