Hard Coking Coal Market

Hard coking coal (HCC) represents the premium band of coking coals (also referred to as metallurgical coals). HCC is used solely for the production of steel through the blast furnace process. It is a crucial input to this process and not substitutable in any baseload sense. Tier 1 HCC is the highest value HCC and is characterised by its very high coke strength and other characteristics that optimise blast furnace performance.

The global seaborne HCC market is approximately 200Mtpa in size. Seaborne HCC production is highly concentrated by mineral industry standards, with the two leading producer countries being Australia (the Bowen Basin in Queensland) and Canada (the Elk Valley complex in British Columbia). Leading seaborne HCC producers include the global resource majors of BHP/Mitsubishi, Teck, AngloAmerican and Glencore.

Growth in new HCC supply globally faces a multitude of current constraints including: depleting resource quality and mining economics in existing major HCC basins, rail and port infrastructure capacity limitations, sovereign development and operating risk (e.g. Mozambique, Mongolia), a growing focus on sulphur content levels, lengthening permitting and approvals timeframes, and Chinese HCC mine supply rationalisation and closures.

Against this market backdrop, Atrum's flagship Elan HCC Project represents a globally scarce asset. Elan is a shallow, large-scale deposition of Tier 1 HCC in close proximity to established rail and port infrastructure with surplus capacity, all located in a first-class operating jurisdiction.



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