Australia: Rio Tinto shows muscle in coal industry debate

Rio Tinto has unveiled ambitious plans to double coal production over the next seven years, in a clear sign that coal-fired energy is here to stay despite moves to cut carbon emissions.

Preston Chiaro, head of Rio’s energy unit, yesterday forecast large growth in coal-fired power generation in China and India that would require significant coal imports.
“Growth in power demand is expected globally, especially in developing economies,” Mr Chiaro told an investor briefing in Sydney.

“Demand will grow for power from coal-fired generation, particularly in China.”

Rio, which is currently fending off a $150 billion hostile bid from BHP Billiton, wants to lift output of thermal coal – used mainly in power generation – to 49.2 million tonnes per year by 2015.

Rio also intends to hike production of coking coal, a steel-making ingredient, to 15.2 million tonnes a year.

Thermal coal prices have increased five-fold in the past five years because of China’s rapid industrialisation and transport and infrastructure bottlenecks, while coking coal prices have tripled this year after floods in Queensland disrupted mining operations.

Herald Sun