Metallurgical coal is used in the production of steel. Around 64% of global steel production relies on inputs of coal. (Source: World Coal Institute)
PCI coal is crushed into a fine powder and injected into blast furnaces as a replacement for coke in the production of pig iron. A blast furnace is depicted in the diagram below.
The replacement ratio of low volatile PCI coal to coke varies according to the requirements of each blast furnace, however replacement ratios are continuing to improve in favour of low volatile PCI coal. Typically, 1.0 tonne of low volatile PCI coal can replace 1.5 tonnes of more expensive coking coal. Low volatile PCI coal is increasingly sought by steel mills in preference to high volatile coal that has traditionally been used as PCI coal. Low volatile PCI coal provides superior performance in the blast furnace due to its higher carbon and energy content. The worldwide shortage of coke and its relatively high price further enhance the appeal of low volatile PCI coal. Low volatile PCI coal is produced at both the Coppabella and Moorvale mines, with the two mines supplying approximately 44% of the low volatile coal exported from Australia. Low volatile PCI coal has also been identified in some of Macarthur Coal's exploration prospects. Click here to view a typical low volatile PCI coal specification for the Coppabella and Moorvale mines. Low volatile PCI coal has been the fastest growing segment of the coal market since the 1990s. Macarthur Coal capitalised on this high growth sector by increasing its ownership of the Coppabella Mine by 23.3% to 73.3% in December 2003.
Coking coal is coal that can be used in the production of coke which in turn is used in the blast furnace in the production of pig iron. Coking coals are able to be softened, liquified and resolidified into hard and porous lumps when heated in the absence of air (Source: Australian Coal Association). Coking coal is a high value segment of the market. Coking coal can be produced from the lower working seam of the Moorvale Mine and has been confirmed in Macarthur Coal's Olive Downs prospect, and prelminary tests indicate that it is also present at the Moorvale West and Vermont East prospects. Production of coking coal provides Macarthur Coal with the option to supply coal to a domestic coke plant in addition to the export market. The company's subsidiary, Queensland Coke & Energy Pty Ltd, is currently investigating the feasibility of establishing a coke plant adjacent to the Stanwell Power Station near Rockhampton in Queensland.
Macarthur Coal also produces an ultra low volatile anthracite type product suitable for use in the sintering process, used to produce sintered feed to blast furnaces. In the sintering process iron ore fines are converted into a form suitable for use in the blast furnace. Most of Macarthur Coal's customers are integrated steel mills incorportating sintering plants. Ultra LV coal is essentially low volatile coal that has been subjected to accelerated heating during its geological formation.