US COAL firm Peabody Energy said yesterday it had entered into an agreement with the Xinjiang government to pursue development of a 50m tonne-per-year surface coal mine in Xinjiang, China.
As per the agreement, Peabody said it would construct, manage and operate the mine.
The company will also conduct geologic, engineering and environmental reviews of the coal mine.
The Xinjiang Region is China’s largest administrative region with vast reserves of coal estimated to account for about 40 per cent of China’s reserves, Peabody said.
The government expects Xinjiang’s coal output will increase from about 100m tonnes in 2010 to more than 1bn tonnes, the company said.
Meanwhile, Peabody Energy and ArcelorMittal have agreed to slightly increase their planned $5bn (£3.1bn) bid for Macarthur Coal, after the Australian target company agreed to open its books to them.
ArcelorMittal, the world’s top steelmaker, and Peabody want Macarthur for its reserves of cheaper, cleaner pulverised coal coveted by steel makers.
“Strategically, it is a good deal for Arcelor, so the fact it can now enter into due diligence with Macarthur is definitely a positive,” said Ingo-Martin Schachel, analyst at Commerzbank.