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Buffier was speaking at the NSW Mineral Exploration & Investment conference last week.

As the world’s largest thermal coal exporter, Xstrata has 15 operating mines in NSW producing around 40 million tonnes per annum.

Xstrata has been quick to react to the global financial crisis, shutting its Oaky No. 1 longwall mine in Queensland before opening it again this month for short-term production after winning spot coking coal contracts.

The miner also recently announced production cuts to its Ulan thermal coal operations and Tahmoor coking coal mine in NSW, making 280 workers redundant.

Buffier said NSW was a place where Xstrata felt comfortable and wanted to continue to invest and grow.

But he warned that gaining support from the community and government was crucial.

“Increasing government charges and regulatory inefficiency represent a significant impediment to investing – there are global choices,” he said.

He spent some time discussing the federal government’s proposed Carbon Pollution Reduction Scheme and said, in its current form, it would be a major impediment to future investment and needed to be more aligned to other nations.

“Coverage of fugitive emissions from coal mining has not been attempted anywhere globally,” he said.

Buffier was also short and sharp in the final words of his address.

“Xstrata has a significant pipeline of opportunities in New South Wales coal if the return on investment fundamentals are there.”

Development

Xstrata is working towards a strategy of integrating its NSW mines into four main complexes through acquisition and development, with Buffier saying there were significant growth opportunities.

The Bulga complex will host Xstrata’s Bulga mine and Beltana longwall operation, as well as the upcoming Blakefield South longwall mine which will replace Beltana’s production – 6.4Mt last year – in the first half of 2010.

The Ravensworth complex will host the Ravensworth Underground, Narama and Cumnock operations along with the Ravensworth North project.

The Ulan complex hosts the Ulan mine and the Ulan West project, while the Mt Owen complex will cover the namesake mine as well as the Ravensworth East, Glendell and Liddell operations.

While Blakefield South development continues, Buffier discussed the Ulan West and Ravensworth North projects set to start mining in 2013.

Ravensworth North will cost $US1 billion to develop, is targeting 7Mtpa and is expected to have synergies with Ravensworth Underground.

With a mine life of 30 years, the proposed mine is looking at a full-time workforce of 550.

Xstrata’s Ulan West project is also expected to cost $1 billion to develop.

The proposed mine will use Ulan’s existing infrastructure and is targeting 6Mtpa for a 14-year mine life, creating 300 full-time jobs.

Buffier said $22 million was committed to advance the project to execution, with the project team in place.

Investment barriers

Outside of his views on the CPRS, Buffier said the coal industry continued to be demonised and would need political support for its future in addition to industry efforts.

He said the current NSW government approvals system caused delays in project commencement, uncertainty of long-term tenure and lack of certainty on return on investment.

Buffier argued for a more efficient process, saying Xstrata was currently facing numerous regulatory approval delays and duplication.

With various coal mining royalties increased last year to an average of 7%, Buffier said the state’s royalty regime posed a significant impost to future investment and a sovereign risk for 20 to 30-year investments.

He also said the NSW government’s waste levy had a combined potential cost of $A36 million, going by 2008 figures.

Turning to the Hunter Valley Coal Chain, he said exporters and infrastructure owners required greater commercial certainty to underpin investment and would like to see Australian Rail Track Corporation track access arrangements aligned with port “ship-or-pay” 10-year contracts.

Meanwhile, Xstrata is upping its focus in South America, with a $US1 billion development project at its wholly owned Prodeco coal mine in Colombia targeting 8Mtpa of thermal coal production from 2013.

There is also an expansion project under assessment for the massive Cerrejon open cut thermal coal mine in the country to add more than 3Mtpa of production by around 2015.

The mine exported 31.36Mt last year and is equally owned by Xstrata, BHP Billiton and Anglo American.