If the shoe fits?Canadian metallurgical coal miner Grande Cache Coal is seeing an uptick in demand, driven by China and the return of its traditional customers to the market after nearly 18 months of severe cutbacks, its CEO said. "Steel production in China is becoming more concentrated in coastal areas and that makes it a lot easier (for it) to import significant quantities of hard coking coal," CEO Robert Stan told Reuters. China will account for about 40% to 45% of Grande Cache's revenue this fiscal year. The revenue contribution has the potential to rise slightly, Stan said. He added, however, the company is likely to limit its exposure to China at that level. "From a strategic point of view, we are unlikely to ever put more than half of our product into China," Stan said, adding that a diversified portfolio will give the company more stability. Japan, Korea, Taiwan and western Europe are Grande Cache's traditional markets. "These are quite stable markets," Stan said. "We expect to see a return to a reasonable level of steel production in Europe and Asia through next year." The company, which recently received a regulatory approval for a new surface mine in Alberta, expects to get approval for another underground mine area over the next year, he said. "Right now we are considering some other opportunities in Western Canada, and also in the United States and Australia," Stan said. "We are more interested in producing facilities and in operations that have existing mines and cash flow," he said. "We are not keen at this stage on greenfield opportunities." The company is actively looking at Brazil as another area of growth, he added. Grande Cache, which expects to see higher coal prices next year, is also looking at expanding in countries in the Mediterranean.
(Calgary Herald 091211)