BHP Billiton Limited
), recently opened the Daunia mine, the ninth operating
metallurgical coal mine in central Queensland, Australia. The
Daunia mine is founded as a 50-50 joint venture between BHP
Billiton and Mitsubishi Development Pty Ltd., a wholly-owned
mining subsidiary of Japan-based
The construction of the Daunia mine started in 2011 and was
completed in July this year. The mine is capable of producing
roughly 4.5 million tonnes of metallurgical coal per annum with a
useful life of 30 years. Apart from the $1.4 billion invested in
the mine, the joint venture has invested roughly $7.7 billion for
major projects in Queensland over the past three years.
Currently, the joint venture operates seven coal mines in the
region, which will increase to eight next year, with the
completion of the construction of Caval Ridge mine.
Queensland coal operations are a major contributor to the
company's revenues. BHP Billiton has various expansion plans on
the anvil to tap the immense growth potential of the region.
Another expansion plan in the region, Hay Point Stage Three
Expansion project, is expected to start in 2015.
BHP Billiton's share of metallurgical coal production reached
38 million tonnes in fiscal 2013, increasing 13.0% year over
year. Metallurgical coal production for fiscal 2014 is expected
to increase to approximately 41 million tonnes. However, with the
start of Daunia mine and the scheduled commissioning of Caval
Ridge mine, BHP Billiton's total Queensland coal business
capacity will increase to 66 million tonnes per annum by the end
The new mine will also contribute to its corporate social
responsibility with new jobs. As much as 450 jobs will be created
with the start of the mine, with roughly 100 positions for female
candidates. We believe such strategies from the company will not
only improve its financial health but also enhance its
credibility in the market.
BHP Billiton currently carries a Zacks Rank #3 (Hold). Other
mining stocks that warrant a look include
Denison Mines Corp.
US Energy Corp.
). Both the companies carry a Zacks Rank #2 (Buy).
BHP BILLITN LTD (BHP): Free Stock Analysis
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US ENERGY CP-WY (USEG): Free Stock Analysis
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