Interest in Canadian projects continues even in the 'Age of Austerity' Report

Insight 02 January 2014

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Report summary

Interest in both brownfield and greenfield development of Canadian coal projects remains strong despite a pull-back in expansion capital spending across the coal industry. In this Insight, we examine how nine projects we've classified as "probable" and "highly probable" to move forward stack up in terms of geography, project sponsors, potential returns, margins, capital efficiency and other metrics. We then assess how these projects will compete against global peers.

Executive summary
Introduction
Canada looks like a safe bet
How do the projects stack up economically?
High hurdle rates for projects in the current environment
- Mining methods, capital intensity and cash costs of projects
Canadian projects compare favourably with global peers
Developers focus on British Columbia's Peace River coalfield
Significant expansion capital will be deployed in Canada
- Expansion capital expenditure by mine status - Canada
Conclusion
Appendix I: Coal price assumptions
Appendix II: Classification of projects
- Highly probable projects
- Probable projects
- Possible projects

Tables and charts

This report includes the following images and tables:

Summary of Canadian probable and highly probable projects
Financial metrics for Canadian probable and highly probable projects
Seaborne export metallurgical coal margin curve, 2026 (nominal dollars)

Seaborne export thermal coal margin curve, 2021 (nominal dollars)
Thermal and metallurgical price assumptions used in project valuation (US$/tonne, nominal basis)
Interest in Canadian projects continues even in the 'Age of Austerity': Table 3
Interest in Canadian projects continues even in the 'Age of Austerity': Image 3
Marketable production by mine status - Canada