U.S. Coal producer Massey Energy Company (MEE) signed a memorandum of understanding with India’s Jindal Steel & Power Limited (JSPL) for the development and operation of underground coal mining projects, with focus on potential projects in India, Mongolia, Australia and the United States. Separately, Massey announced that it has started the development of a new metallurgical coal mine within its Rowland reserve in Raleigh County, West Virginia.
Under the agreement, Jindal will be responsible for identifying various underground coal mining projects in India and other countries and obtaining necessary licenses, permits and approvals from the respective government authorities. Massey’s responsibility extends to providing technical mining expertise and developing detailed underground mine project plans. Massey will also provide the technical manpower and project management to ensure continuity and successful project implementation.
The companies expect the combination of Massey’s technical expertise in underground mining with Jindal’s broad portfolio of international assets and businesses will enable them to establish profitable joint ventures that will both extend Massey’s coal producing opportunities and provide lower cost, more stable energy supply for Jindal’s planned global expansion.
Separately, Massey announced that it has started the development of a new metallurgical coal mine. Massey’s Rowland reserves are located adjacent to its Marfork operation, having low and mid volatile reserves of about 56 million tons.
Massey first announced its intent to develop this reserve on October 28, 2009. It expects the new mine, along with other planned mining group on the Rowland reserve, to produce nearly two million tons of metallurgical coal annually and employ over 500 miners. Massey acquired most of the Rowland reserve in 1998 and added to it with several small acquisitions in 2008. Initial development of the property and construction of the mine is expected to be completed in time for the 2011 export season.
Richmond, Virginia-based Massey Energy Company, together with its subsidiaries, engages in the production, processing, and sale of bituminous coal of steam and metallurgical grades through its processing and shipping centers called resource groups. The company’s steam coal is purchased by utilities and industrial clients as fuel for power plants. Its metallurgical coal is used to make coke, used in the manufacturing of steel. We believe Massey controls some of the best remaining coal reserves in Central Appalachia, and is likely be in a stronger competitive position when coal demand recovers.
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