Fording Announces Elk Valley Coal to Develop Cheviot Creek Pit
16 März 2004 - 10:45PM
PR Newswire (US)
Fording Announces Elk Valley Coal to Develop Cheviot Creek Pit
CALGARY, March 16 /PRNewswire-FirstCall/ -- Fording Canadian Coal
Trust (TSX: FDG.UN, NYSE: FDG) today announced that the Elk Valley
Coal Partnership will proceed with the development ofthe Cheviot
Creek pit at its Cardinal River Operations located near Hinton,
Alberta. The initial production rate at Cardinal River will be 1.4
million tonnes of clean coal per year. The first coal production is
anticipated by the end of the fourth quarter of this year. If
market demand remains strong, production may be expanded to 2.8
million tonnes per year in 2005. "Our outlook for coking coal sales
is very positive," said Jim Popowich, President and CEO of Elk
Valley Coal. "Strong export coal markets present us with an
excellent opportunity to continue our operations near Hinton,
Alberta, and to increase our production capacity for high-quality
coking coal." Jim Popowich continued: "With 62 million tonnes of
coal reserves in the permit area, mining at the Cardinal River
Operations will provide jobs and economic benefits to the community
for more than 20 years." Elk Valley Coal has submitted its mine
license application to obtain the remaining approvals from the
Alberta Energy and Utilities Board and Alberta Environment to
develop the Cheviot Creek pit. Mining activities will begin in the
new mining area once the mining license approval is received. The
existing work force of 120 employees at Cardinal River Operations
will complete miningof existing pits and will progressively shift
to work on developing the infrastructure for the new mining area.
These activities will include the construction of a private coal
haul road and power line, both of which have received the necessary
regulatory approvals and permits. The capital cost to develop the
Cheviot Creek pit to an annual production rate of 1.4 million
tonnes is estimated at $50 million, which is expected to be largely
incurred during the second half of 2004. Additional capital cost to
expand production to 2.8 million tonnes per year is anticipated to
be another $70 million. The Trust's 65% share of the anticipated
capital expenditures will be financed with existing bank credit
facilities until permanent financing is arranged. Itis anticipated
that financing of this project will not impact cash available for
distribution in 2004. Fording Canadian Coal Trust is an open-ended
mutual fund trust. Through investments in metallurgical coal and
industrial minerals mining and processing operations, the Trust
makes quarterly cash distributions to unitholders. The Trust,
through its wholly-owned subsidiary, Fording Inc., holds a 65%
ownership of Elk Valley Coal and is the world's largest producer of
the industrial mineral wollastonite. Elk Valley Coal, comprised of
Canada's senior metallurgical coal mining properties, is the
world's second largest exporter of metallurgical coal, capable of
supplying approximately 25 million tonnes of high-quality coal
products annually to the international steel industry. DATASOURCE:
Fording Canadian Coal Trust CONTACT: Media Contact: Elk Valley Coal
Corporation, Dermot Lane, Director, Public and Environmental
Affairs, 403-260-9816; Community Contact: Cardinal River
Operations, Lloyd Metz,General Manager, 780-692-5110; Investors:
Fording Canadian Coal Trust, Mark Gow, CA, Director, Investor
Relations, 403-260-9834,
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