JOHANNESBURG (miningweekly.com) – US coal-miner Peabody Energy, which has now started operations at its Bear Run mine, in Indiana, has signed a $2-billion five-year unsecured credit facility to replace an existing credit facility that matures in September next year.
“This new credit facility reflects our financial strength and the confidence of the credit markets in Peabody. We are pleased to have a consortium of lenders from four continents that complements the company's international growth strategies,” Peabody executive vice-president Michael Crews commented in a statement to shareholders.
The company was planning to continue growing its coal output in Australia, Asia and the US, with coal for power generation and for steel production purposes expected to continue increasing.
“I believe we are in the early stages of a long-term supercycle for coal,” chairperson and CEO Gregory Boyce stated.
He pointed out that coal had been the world’s fastest-growing fuel over the past decade, with demand for coal growing at twice the rate of natural gas and hydropower.
This trend was expected to continue, with Asian Pacific nations building more coal-fired power generation plants. More than 94 GW of new power generation plants were expected to come on line this year, resulting in 375-million tons a year of coal consumption.
“If growth continues at the current pace, generators would add another one-billion tons of new coal demand every three years,” he stated.
Further, Boyce highlighted that the demand for steel was expected to increase by 50% by 2020, with a similar increase of metallurgical coal needed as a basic feedstock.
Peabody expected seaborne coal demand to expand by between 300-million tons and 400-million tons by 2015, with China and India representing from one-half to two-thirds of this growth.
To that end, the company was planning to double its metallurgical and thermal export coal output, in Australia, to between 35-million tons and 40-million tons a year by 2014.
A number of projects in China, India, Indonesia and Mongolia would also help to boost output from the Asia Pacific region, where Peabody was aiming to achieve production of 100-million tons a year in the long term.
Meanwhile, production at the company’s Bear Run mine, in Indiana, had started. The mine was expected to build up to produce eight-million tons a year of coal by 2012.
With additional investment, output could eventually increase to 12-million tons a year.