Glencore, Peabody Energy Join Forces, Agree to Merge Hunter Valley Coal Mines
Two of the biggest mining companies in Australia have decided to join forces. Swiss commodities trader Glencore has agreed to merge its United Colliery coal mine in Hunter Valley with Peabody Energy’s Wambo mine to form a jointly managed project.
The merger, which is the first of its kind in the region, is intended to produce six million tons a year of coal from 2017, with the two partners entitled to half of the output each. The joint venture excludes Peabody’s underground mine at Wambo.
According to the agreement, Glencore will manage the mining operations while Peabody will continue to operate coal washing and loading facilities.
The joint venture will allow Glencore to recoup tonnage lost from declining volumes produced at its existing mines in the Hunter Valley. For Peabody, the deal will help to improve productivity as well as cutting costs and extending the life of both mines.
"Peabody continues to take positive steps to further reduce costs, improve our competitive position and create value," said Peabody Energy president and chief operating officer Glenn Kellow.
The JV will also help preserve jobs and investments in a region that has suffered from the coal downturn over the past few years, according to The Construction, Forestry, Mining and Energy Union.
"It is very welcome news at a time when our region is suffering from substantial job losses in the coal industry," CFMEU district president Peter Jordan said in a statement.
The JV will see miners employed at Peabody’s existing Wambo open cut mine transfer across to the new operations, which Glencore will manage.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.