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BHP considers increased coking coal output from Queensland amid price surge

BHP Billiton Group is considering higher coking coal production from its mines in Queensland amid the commodity's price surge, though a company executive reiterated BHP's ongoing focus on its copper and oil businesses, The Australian reported Dec. 11.

Mike Henry, head of BHP's Australian minerals business, said the mining giant is avoiding huge spending on coking coal investments but it continues to develop longer-term options. Henry described BHP's medium-term coking coal output guidance as "light" and "conservative," forecasting about 45 million tonnes of production this year and up to 49 million tonnes per annum in the midterm.

Potential upgrades could yield 20 million tonnes of coking coal output annually, including joint venture partners' shares. The miner already unveiled a low-cost expansion at its Caval Ridge plant and is assessing a 4 mtpa expansion at the Blackwater coal mine.

The report added that BHP could consider further expansion at Caval Ridge's mine and wash plant for another 5.7 mtpa. Previous permit applications also show the Goonyella and Wards Well underground coal mines have the potential to add combined production of over 15 million tonnes.

Henry warned that he does not expect current coal prices to last and said BHP is not planning a big jump in production immediately, adding that expansion plans will be supported by market conditions and capacity of the coal project's wash plants.