Phase one of a Xinjiang premium metallurgical coal market study conducted for Celsius Coal has identified a significant, and widening, demand-supply gap for coking coal in China’s Xinjiang region, which borders the Kyrgyz Republic where Celsius has a development stage coal project.

The independent survey, conducted by Bryanston Resources, forecast coking coal prices to increase to US$235 from US$145 per tonne by 2017 – fuelled by rapid blast furnace steel capacity growth and a dearth of local availability. The assessment, through visits to more than 20 customers for discussions on usage and logistics, showed local values higher than seaborne prices.

Celsius executive chairman Alexander Molyneux exuded confidence over “a positive market dynamic” for premium coking coals in the vast, sparsely-populated Xinjiang Autonomous Region, which comprises one-sixth of China’s landmass.

Alistair Muir, director of operations at Celsius, adds: “The information we have gained is a valuable piece in our overall market analysis review and can be used to help optimize our mine planning studies.”

Headquartered in Australia, Celsius Coal is focused on developing coking and thermal coal mining operations in the Kyrgyz Republic. It owns 80% of the Uzgen Basin Coking Coal project, comprising Kargasha, Kokkia and Min Teke prospects with five majority interests prospective assets – the Uzgen Basin Coking Coal Project, and 90% of the Alai Range Coal Project comprising the Sary Mogol and Bel Alma prospects.

Celsius officials note that project studies are ongoing in the Kyrgyz Republic with a view to road and rail infrastructure catering to Xinjiang market.

Following the successful outcome of the study, Celsius has commenced the process of building direct customer relationships with the goal of establishing an offtake agreement. The company will be providing samples of its coal to various customers and also inviting potential customers to review its Uzgen Basin Coking Coal Project in more detail, including site visits and logistics studies.

Commenting on the future milestones for the company Alexander Molyneux says, “The road ahead of us includes the move through feasibility, project financing and development.”

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