North Goonyella suffered roof falls after fire

PEABODY Energy has identified several roof falls at its North Goonyella longwall mine in Queensland after it re-entered the mine last month.
North Goonyella suffered roof falls after fire North Goonyella suffered roof falls after fire North Goonyella suffered roof falls after fire North Goonyella suffered roof falls after fire North Goonyella suffered roof falls after fire

Peabody Energy's North Goonyella mine in Queensland.

The mine, which was closed after an underground fire last September, is still under strict regulatory oversight.

"Following substantial delays, the company proceeded with re-entry and exploration of the first zone earlier this month," Peabody said.

"The regulatory environment continues to be challenging given the unprecedented nature of the recovery actions. 

"Advancement during the recovery phase has been subject to the discretion of the regulatory authority, special protocols and substantial related administrative requirements, which has resulted in a far slower rate of progress than originally contemplated."

Based on these changes the North Goonyella project team, led by Peabody executive vice-president and chief operating officer Charles Meintjes and Australian Operations president Marc Hathhorn, is assessing prospective paths, timetables and costs.  

"The company continues to take action to appropriately scale on-site activities based on underground mine conditions and external factors, with all work currently being undertaken required to preserve value," Peabody said.

"Actions include the completion of a voluntary reduction program; continued engagement with the Queensland Mines Inspectorate on the evolving recovery protocols; and conducting extensive value-engineering activities on prospective paths." 

Peabody is continuing to evaluate this project through a stage-gated approach to prove feasibility. 

North Goonyella project costs of US$28.4 million came in below the quarterly guidance range of $30 million to $35 million, even with $2.3 million in charges associated with the voluntary employee reduction program, based on reduced activity levels at the mine.

"Paths to recognise value include determining if the base case to access the 10 North panel remains, based on timing, costs and project risk; evaluating an alternative route through the second zone to the southern panels of the mine; and other scenarios," Peabody said.

"All potential paths preserve the opportunity to access more than 40 million tons of high-quality hard coking coal in the lower-seam reserves over time and provide the opportunity to explore commercial activities. 

"Given ongoing activities, Peabody is suspending North Goonyella guidance at this time, and intends to provide new targets around North Goonyella production timing and costs in accordance with the determined path.  The company expects to complete its evaluation within the next three months."