Coal is experiencing its worst slump in seven years. Yet whilst most coal mining companies are closing projects and cutting back on operations as costs continue to rise, such as Glencore Xstrata, who is cancelling projects and firing employees to cope with escalating production costs and slumping prices, GVK Group and Adani Enterprises are moving ahead with their $21 billion investments in Australia's Galilee Basin.
The reason?
The Australian bureau has recently released a report that predicts Asian demand for coal imports to increase to 824 million tonnes a year by 2018, up from 665 million tonnes last year. China will import an extra 22% from Australia, and India an extra 83%.
GVK and Adani expect that their new coal projects will be complete in time to take full advantage of this boost in demand.
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GVK, intends to have all financing in place to begin constructing it Alpha mine in the Galilee region of Queensland, with the project ready to export coal by 2017.
Adani will begin construction on the Carmichael mine, part of its $6.8 billion project in the region with coal production expected to begin by 2016.
Adani and GVK are just two of the companies planning to invest more than $32 billion on developing the Galilee basin, which covers 247,000 square miles, and contains an estimated 14 billion tonnes of coal.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More