Western Canadian Coal sign new lease, set stage for possible port expansion

The recent news that Ridley Terminals Inc — located near Prince Rupert on Canada’s northwest coast — has signed a new long-term agreement with its largest shipper, Western Coal Corp, comes at an opportune time.

It underscores the current opportunity that Canadian coal producers have — to benefit from the unfortunate infrastructure woes in weather-affected Queensland, the primary source of metallurgical coal to the world’s steel industry.

The terminal achieved record through-put of 8.3 million tonnes in 2010. RTI should reach its design capacity of 12 Mtpa in 2011, the company has said.

Demand for throughput capacity comes not only from the Canadian coal producers who ship what is mainly metallurgical coal through the port, but also from U.S.-bound shipments of thermal coal, which largely comes from the Powder River Basin.

As a Federal Crown Corporation, RTI has been restricted in its ability to raise capital for expansion, limiting any benefits that would flow from doubling its capacity to 24 Mtpa — a relatively straightforward expansion plan that would largely take place on the port’s existing footprint.

With an assured shipper base, the stage is now set for Ridley Terminals to provide the port capacity needed to serve the resurgent coalfields in northeast British Columbia and Central Alberta.

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