The price of coal is expected to rise a Brisbane conference has heard.
Brisbane’s Major Projects Conference has heard from GVK Hancock Coal chief development officer Justin Crotty who said coal will recover to $US100 ($A96.92) a tonne by the end of next year, SMH reported.
Crotty said that there was strong demand for coal from GVK’s joint Alpha project in the Galilee Basin.
"We have demand for 43 million tonnes," he told the Brisbane Major Projects Conference.
"It's a good indicator that (buyers) have confidence in coal."
The Alpha project, 79 per cent owned by Indian conglomerate GVK and 21 per cent owned by Gina Rinehart's Hancock Prospecting, involves two coal mines in the Galilee Basin, a 495 km standard gauge railway line as well as the port facilities at Abbot Point.
Spot coal prices have fallen to a three-year low during 2012 hitting $US81 ($A78.51) a tonne at the end of October.
"We're near the bottom and it's only up from here,” Crotty added.
Crotty said increasing demand from China along with other Asian countries including Vietnam, the Phillippines and Thailand wouls help support coal prices.
"We actually think that beyond 2015 we will see the demand for coal basically increase at least two Alpha coal projects a year," he said.
The positive forecast for coal comes after China’s factory output is at its highest level in 13 months, marking an expansion in the manufacturing industry.
The Alpha project is set to create 650 jobs during port construction while the combined Alpha mine rail and port project will provide 1800 on-going, intergenerational operational jobs and employ 4000 people during construction.
As Australian Mining reported in October, GVK Hancock has delayed its Alpha Coal project by one year as it struggles to line up funding for the $10 billion dollar project.
The delay comes as GVK’s vice chairman said the initial target for the project had been overly ambitious and had to be pushed back due to its size and complexity.
GVK now expects to cut its stake to 51 percent and reach financial closure by the third quarter of 2013.