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Chile's Mina Invierno plans to begin exporting coal in first half of 2013

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Chilean mining firm Mina Invierno intends to start exporting sub-bituminous coal, mainly to Asia, in the first half of 2013, a company executive said Monday.

The company's plan will mark the first time Chile has exported coal, Chief Commercial Officer Ian Philippi said on the sidelines of the Coaltrans Asia conference in Bali, Indonesia.

He said Mina's cost of production will be relatively low, enabling it to compete with with coal from the US, Colombia and even Indonesia.

Philippi said his firm is spending $550 million to develop the 6 million mt/year mine and a dedicated 10 million mt/year coal port that can handle Capesize vessels of up to 140,000 mt.

The construction of the port is currently half complete and will be operational by the end of this year. The mine, whose planned first phase production is 6 million mt annually, is being developed in Isla Riesco in Chile's Magallanes region, the third largest island in the country.

Philippi said between three to four million mt of coal annually will be sold to domestic coal buyers, representing about 25% of Chile's coal demand.The remaining tonnages will be sold to international buyers, with a focus on thermal coal buyers in north Asia and in India even though Mina Invierno is in a "privileged position" in that it has access to Chilean as well as Pacific and Atlantic markets, Philippi said.

Philippi said that although seaborne coal prices are slumping, he is optimistic that prices will rebound in mid-2013.