Xstrata Board approves US$1.1B Ulan West coal project

The Ulan West underground longwall mine will produce 6.7 mtpa of export thermal coal, with a life of mine of approximately 18 years.

Situated within the existing Ulan mine complex, Ulan West will complement the Ulan No. 3 underground mine and use some of the existing infrastructure at the Ulan complex.

Subject to the receipt of a Development Approval and other Government environmental approvals, construction of the mine is expected to commence in late 2010, with the first longwall coal to be extracted in 2014.

Xstrata Coal chief executive Peter Freyberg commented: “The development of Ulan West will add another low-cost, efficient longwall operation to Xstrata Coal’s portfolio, leveraging a known resource base at Ulan to increase our production volumes by at least seven million tonnes per annum to satisfy growing demand for export quality thermal coal in Asia.

“Through our continued investment into new operations, Xstrata Coal is providing new employment and local business opportunities within the Mudgee region and making an important contribution to the State’s economy.”

Ulan Coal Mines Limited is jointly owned by Xstrata Coal (90%) and Mitsubishi Development (10%).