Reuters reported that Italy's Coeclerici has postponed plans to double capacity at its Siberian mine following the collapse in coal prices.

Mr Giovanni Marchelli MD of Coeclerici's Coal & Fuels division told Reuters in an interview that "If you look at what is going on in this business, you have to plan accordingly, so we don't expect to double production until 2010.”

He said Coeclerici invested USD 8 million in new equipment to expand production at the Korchakol mine, near Novokuznetsk in western Siberia, after becoming the first foreign company to purchase a Russian steam coal mine in April 2008.

His company plans to produce 500,000 to 600,000 tonnes at the mine this year, up from 450,000 tonnes in 2008. It has 20 million tonnes of certified reserves.

Mr Marchelli said that "What Coeclerici decided to do is not to stop production, not to fire people.” He added that "We are the first foreign company operating a mine in Russia and we want to keep everybody happy."

With costs more than double those of rivals in South Africa and Colombia, the Russian coal industry has been hard hit by the downturn and is expected to reduce exports this year.

Mr Marchelli said that per tonne API2 Russian steam coal index prices were about USD 70 at present down from their peak above USD 200 in July 2008. He said that "I'm almost sure that the prices we had six months ago, we will never have them again for the next 20 years. They were so high and it made no sense at all. There was no connection to the real market."

(Sourced from Reuters)