Luscar Energy Partnership

Luscar Energy Partnership
Luscar Coal Ltd.

January 05, 2005 17:17 ET

Luscar Energy Partnership: Coal Valley Mine Expansion to Double Capacity


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: LUSCAR ENERGY PARTNERSHIP

AND LUSCAR COAL LTD.

JANUARY 5, 2005 - 17:17 ET

Luscar Energy Partnership: Coal Valley Mine Expansion
to Double Capacity

TORONTO, ONTARIO--(CCNMatthews - Jan. 5, 2005) - Luscar Energy
Partnership ("LEP") has announced the expansion of its Coal Valley mine
to 4 million tonnes per year, doubling thermal coal production capacity
at the mine. The mine is scheduled to be at full capacity by the second
quarter of 2006. This $75 million project involves doubling the coal
wash plant capacity and adding additional mining equipment. The
expansion is expected to create at least 100 new permanent jobs at the
mine.

The Coal Valley mine, located 100 km south of Edson, Alberta, was opened
in 1978 to meet growing domestic power demand. Over the years, the focus
of the mine has shifted to supplying coal to consumers in the Pacific
Rim. The additional coal produced by the expansion will be shipped via
rail to coal terminals on the coast of British Columbia, where it will
be loaded on to ships bound for Pacific Rim locations.

LEP expects export coal markets to remain relatively strong over the
next few years. High and volatile natural gas pricing in North America,
the migration of thermal coal into metallurgical markets, strong
domestic Chinese requirements, and increased demand in remaining North
Asian countries contribute to this expectation.

The expansion builds on recent operational improvements realized
throughout LEP's operations. The existing coal cleaning plant will be
rehabilitated and expanded within its current space, resulting in a
world class coal preparation facility. Work will begin immediately on
the detailed design of the expanded coal wash plant and the ordering of
additional mine equipment.

The additional mining equipment of $50 million will be lease financed.
The partners of LEP have agreed to fund the remaining capital
requirements for the plant expansion and mine development of $25 million.

LEP, formed on February 21, 2001, is a 50 / 50 general partnership
between subsidiaries of Sherritt International Corporation and the
Ontario Teachers' Pension Plan Board. LEP is Canada's leading producer
of coal and operates ten thermal coal mines in Alberta and Saskatchewan.
The mines produce approximately 39 million tonnes of coal annually. Most
of the coal produced is sold under long-term coal supply agreements to
adjacent electric power stations in Alberta and Saskatchewan. These
stations produce most of the electric power in these two provinces.

This news release contains forward-looking statements identified by
words such as "expect", "schedule", "will" or similar words or phrases.
These forward-looking statements are not based on historical facts, but
rather on current expectations and projections about future events and
are subject to risks and uncertainties such as changes in coal markets,
including with respect to price and demand, and changes or errors in
current cost or productivity estimates. These risks and uncertainties
could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Luscar Energy Partnership
    Deanna L. Horton
    (416) 934-7655
    Website: www.luscar.com