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Commodity trading major Vitol will fund the restart of a coal mine in Australia that has not been operational in 16 years.
The company will provide $60 million for the mine, Dartbrook, which will be operated by a joint venture between Australian Pacific Coal and Tetra Resources. The two plan to begin production in the first quarter of 2024, Bloomberg reports.
The joint venture also inked a sales and marketing deal with the commodity trading major, which will provide 100% of the money necessary to restart the mine, Australian Pacific Coal said.
Thermal coal prices remain robust and we have received numerous inbound inquiries for Dartbrook’s” coal, Australian Pacific Coal’s interim CEO Ayten Saridas said, as quoted by Bloomberg. “We are confident in Vitol’s marketing capabilities and we look forward to working with them as we bring this world class asset back to full operational status.”
The mine could contribute to Australia’s expected 17% expansion of coal production in the 12 months to next June, totaling 252 million tons.
Coal has been a big target for transition advocates and for governments that have signed up for a fast transition but demand for the commodity has been on the rise in developing nations, most notably in China and India: the powerhouses of Asia.
China has been building even more coal generation capacity than it has been installing wind and solar systems, and India recently said it would triple its coal mining output to meet its growing energy needs.
This has been happening amid intensifying calls for the phaseout of coal and all hydrocarbons in general—a topic expected to be discussed at the COP28 in Dubai that begins today. However, expectations for a decision on that topic is less likely with such major energy consumers prioritizing energy security over the transition.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com