Calculating the ratio of development production to total raw coal output for each longwall mine in 2001 makes interesting reading. Australian longwall mines averaged 10% development to production ratios for the calendar year 2001.

The best performers were Oaky North (5%), North Goonyella (5%), Kestrel (7%), South Bulga (7%), German Creek Southern (7%), Baal Bone (7%), Tahmoor (7%) and Elouera (7%). See related table.

The two mines that closed in a planned and orderly manner last year, Cordeaux and Teralba, completed all development work in 2000 and so, of course, had a development to production ratio of zero for 2001. Similarly, two other mines winding down towards orderly closure this year, Kenmare and Alliance, had development to production ratios of less than 5% for 2001. Kenmare produced an extraordinarily good result for new owner the BHPB Mitsubishi Alliance – ironic given that it was its last full calendar year of operation. The Kenmare longwall is of course destined for trial punch longwall operations at Goonyella Ramp 4.

Perhaps of more interest is that 11 mines, or one third of the total, had development to production ratios of 10% or more last year. The two mines with the highest apparent development ratios, Bellambi West and New Wallsend, carry out bord and pillar operations in addition to longwall development and so are exempt from criticism on this measure. Bellambi West (formerly South Bulli) had the highest ‘development’ percentage last year of 75%, and has since closed.

New Wallsend (formerly Gretley, York Mining) had the next highest development percentage of 46%. New Wallsend is a miniwall operation with extraction percentages limited by subsidence issues relating to mining under residential areas on the outskirts of Newcastle. In addition to the miniwall and its associated development, the mine operates a pillar extraction section and introduced another continuous miner cut and flit section during 2001 – hence there was a big jump in the ‘development’ percentage from 24% in 2000 to 46% in 2001. New Wallsend has only a couple of years of reserves left in the Dudley and Young Wallsend seams, but is evaluating the feasibility of extending mine life by moving into the Victoria Tunnel seam.

Next on the list, with a development percentage of 31% was Powercoal’s Wyee. Wyee hit a major fault around August 2001, which necessitated substantial additional and unexpected development work. Wyee is expected to finish its current longwall panel (LW 22) this month and has one remaining 500m long panel blocked out.

This should take it through until June 2002, and it appears likely that the mine will close at that time. The problems at Wyee will not assist the NSW government in its efforts to privatise Powercoal.

Metropolitan also had a high development percentage of 22% in 2001. The two main factors here are that the longwall face is only 133m long, constrained by subsidence restrictions, and that additional development was required to develop longer panels during 2001.

Next comes Southland, with a development percentage of 21%. Such a high ratio is not surprising given that Gympie Gold’s new mining contractor, Thiess, has been focused on catching up on development work that had fallen critically behind under the previous contractor. So, in the case of Southland, the high development percentage is actually a positive sign.

Next come Moonee and Oaky No.1, each with a development percentage of 16%. Moonee has, of course, suffered from a variety of problems over the past few years and longwall production there is to be wound up in June 2002.

Four other mines have moderately high development percentages of between 10% and 12% - these are West Cliff, which is developing into areas with longer panels, Newstan, Tower, which is slated to close at the end of the year, and Dartbrook.

Beyond 2002, a number of the remaining longwall mines may need to battle hard to survive.

· Metropolitan – prospects look brighter under new owners but significant problems remain to overcome.

· New Wallsend – has limited reserves as previously noted.

· Southland - we are reasonably positive about the future of Southland but its development conditions will always be difficult.

· German Creek Central – progressing to ever increasing depths

· North Goonyella – better performed of recent years but has often teetered close to the edge.

So it seems clear that the future of the Australian longwall industry will increasingly rely on fewer, high capacity longwall units. Over the next few years, however, most of the new high capacity longwalls will only replace adjacent high capacity units that are approaching reserve exhaustion.

These include South Bulga being replaced by Beltana, German Creek Southern being replaced by Grasstree, and Newlands Southern being replaced by Newlands Northern. Over the longer term, new high capacity units may come on stream, such as BHPB’s Wyong project, but only a relatively anaemic recovery in longwall output can be expected in 2003 and 2004.

* Clyde Henderson is principal of Energy Economics.