TORONTO (miningweekly.com) – Vancouver-based Western Coal (formerly Western Canadian Coal) plans to boost production to ten-million tons a year of coal by 2013, chairperson John Byrne told shareholders at the firm's annual meeting on Tuesday.

Earlier this year, Western bought Aim-listed Cambrian Mining. The combined company has five mines in West Virginia and Western Canada, with an installed capacity for 7-million tons of coal a year. Western also owns a 50,6% interest Energybuild which produces high quality anthracite and thermal coals in South Wales.

The company agreed last week to sell its AGD Mining unit, which has a gold and antimony operation in Australia, to Mandalay Resources, led by former Lonmin CEO Brad Mills.

Byrne said the company will increase production by expanding its Brule mine to two-million tons a year, and restarting and expanding the shuttered Willow Creek mine, to 1,8-million tons a year.

It is also planning an underground mine at the Perry Creek project, which will boost production at the company's Wolverine operation to nearly three-million tons, he said.

New equipment will be purchased for the two West Virginia mines, Maple Coal and Gauley Eagle, lifting output to 1,8-million tons and 1,4-million tons respectively.

Development work at Brule and Willow Creek is expected to begin in the first half of next year, Western said.

The company plans to lift production levels to take advantage of recovering demand for metallurgical coal, with spot prices for coking coal now over $170/t, Byrne said.

Assuming the continued recovery in steel demand, Western expects next year contract coal prices to be significantly higher.

“With current operations performing better than expected along with the expectation of higher coal prices in the near-term, we believe the time is right to expand our operations,” CEO John Hogg added.

“Cash costs at Wolverine are now around $100/t, which is almost 50% lower than fiscal 2009 costs.

“The year-to-date effective stripping ratio at Wolverine is now approximately 13 to 1, which is almost 20% lower than the average in fiscal 2009 of 16 to 1, and trending towards a life-of-mine ratio of 10 to 1.”