Celsius makes plans as demand in target market rises
PERTH (miningweekly.com) – A market study by coal junior Celsius Coal has identified a demand and supply gap for coking coal in Xinjiang, a Chinese administrative district which borders the Kyrgyz Republic.
The study also found that the Xinjiang coking coal markets were poised for growth, owing to a rapid growth in its blast furnace steelmaking capacity.
The report noted that Xinjiang’s own coal resources could not provide adequate coking coal supply, with only 2% of the region’s overall coal resource known to have coking properties.
Coking coal prices in the region have also steadily increased owing to the supply gap, and were now at a premium to seaborne coking coal prices.
“The study confirms our understanding that a significant supply gap for premium coking coals exists in the region, leading to the potential for a far more positive market dynamic in Xinjiang than the current outlook for seaborne coking coals," said Celsius executive chairperson Alexander Molyneux.
He pointed out that the market analysis could be used to help optimise the company’s mine planning studies.
Molyneux said that Celsius was well positioned to capitalise on Xinjiang’s demand, as the company had development-stage coal resources in the Kyrgyz Republic.
The company has now started building direct customer relationships with the goal of establishing offtake agreements for its coking coal projects, and would be providing samples to various customers.
“The road ahead of us includes the move through feasibility, project financing and development,” Molyneux said.
Celsius recently released their maiden Joint Ore Reserves Committee resource of 255-million tonnes of coal at its Uzgen Basin coking coal project, in which it owns an 80% interest, and has commenced scoping studies into the development of the project with the aim of commencing starter export operations in 2014 to 2015.
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