Pike River chooses lower carbon route for coal transport

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COSTLY COAL: A worldwide rally in energy prices has seen coal break $US100 a tonne in Europe.

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Pike River Coal, which is developing a mine near Greymouth, says it has chosen a transport route for the coal that will result in lower carbon emissions than an alternative option.

The company said today that using current fuel prices it will cost $41 a tonne to transport coal from its coal preparation plant to loading on to export vessels at Lyttelton. That was up from an estimate of $38 in November.

A long term road transport agreement had been signed with TNL Group to truck Pike River's high quality coking coal 22km to the point of loading on rail at Ikamatua in the Grey Valley.

At mine production averaging about 1 million tonnes a year from mid-2009, 10 truck and trailer units carrying 30 tonnes of coal would be operating each day. All loads will be covered to ensure coal dust was contained, Pike River said.

Two main trucking route alternatives were considered – the northern 22km route to Ikamatua, and a southern 41km route to an existing rail loading facility at Stillwater.

The capacity, environmental and commercial advantages of the much shorter trucking route to Ikamatua determined the decision.

Carbon emissions for the trucking leg would be halved, and while the rail leg was now slightly longer, rail had significantly less carbon emissions compared to trucking, the company said.

From Ikamatua the coal will be railed to the Port of Lyttelton for export.

Pike River has been granted resource consents to build and operate a $12m rail loading facility at Ikamatua, with the facility due to be built by December.

Coal production is due to get under way from July, but Pike River said it would take some months before any sizeable quantities were available.

During that time, coal would be stockpiled at the mine's coal preparation plant, with trucking to the new rail loading facility in readiness for the first train shipments to Lyttelton expected to start late this year or early 2009.

Pike's total production is to be exported to coke and steel makers.

Earlier this month Pike announced it had settled the sale price for its coal with two Japanese steel mills and its Indian shareholders at $US300 ($NZ403) a tonne for deliveries in the year to the end of March.

Pike River shares were up 2c to $1.91 around noon today, having ranged between $2.14 and 77.4c in the past year.

- NZPA

- Reuters