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Rio Tinto to shut Blair Athol export thermal coal mine by year-end

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Rio Tinto to shut Blair Athol export thermal coal mine by year-end

Rio Tinto Coal Australia said Wednesday it would close earlier thanexpected its Blair Athol mine for export thermal coal in Queensland's BowenBasin coal field, partially blaming falling international thermal coal prices.

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The Blair Athol mine was nearing the end of its mineable coal resources,but its closure was not due to happen for several until 2015-16, according toinformation posted on the company's website in October 2010 to coincide withthe opening of Blair Athol's replacement mine, Clermont.

In a statement Wednesday, Rio Tinto Coal Australia cited "the recentsignificant drop in thermal coal prices, and other factors such as risingcosts and the foreign exchange rate," as the reasons Blair Athol's miningoperations would terminate by December this year after 30 years of coalproduction.

"The final day of production at Blair Athol mine will depend on theprogress of mining operations over coming months, but we expect it will bebefore December," David Pretorius, operations general manager for thecompany's Clermont region, said in the statement.

Blair Athol produced 2.8 million mt of thermal coal for export customersin Asia last year. The mine's coal production will be replaced by the nearbyClermont mine.

Rio Tinto Coal Australia employs 170 people at its Blair Athol mine andaround 30 jobs will remain after its closure at a coal handling andpreparation plant and rail load-out facility that are used by the Clermontmine.

Rio Tinto is the largest shareholder in the Blair Athol mine with 71%.Other shareholders are Japanese utility J-Power and the Japan CoalDevelopment Association, according to information on the coal company'swebsite.

CLERMONT MINE

The closure of Blair Athol leaves RTCA with three coal mines inQueensland - Clermont, Kestrel and Hail Creek which employ 2,400 people. Thecompany's former standalone subsidiary Coal & Allied Industries has severalcoal mines in New South Wales.

In July, Rio Tinto Coal Australia said it was laying off an undisclosednumber of staff at the Clermont mine for export thermal coal, due to lowercoal prices.

"Rio Tinto is looking at ways to reduce costs at Clermont mine, toimprove its competitiveness in an environment of significantly lower thermalcoal prices," the coal producer said in a July 19 statement.

Two other Queensland coal producers, Ensham Resources and BHPBilliton-Mitsubishi Alliance said separately in July they were cutting100-200 contractor posts from single mine operations, partly due to lowercoal prices.

Seaborne market spot prices for premium-grade Australian 6,000 kcal/kgnet as-received thermal coal have tumbled from $120/mt FOB Newcastle inFebruary to about $90/mt FOB this week, according to Platts price assessments.

--Mike Cooper, michael_cooper@platts.com--Edited by Jeremy Lovell, jeremy_lovell@platts.com