The first of three continuous miners started cutting coal a month ago with stage one development of the mine costing $227 million for 500,000-700,000 tonnes per annum of production.

 

The stage two approval is a significant step to allow the mine to be transformed into a longwall operation with production of up to 8 million tonnes per annum.

 

The last hurdle is federal government environmental approval.

 

Whitehaven expects full production to result in 6Mtpa of low-ash, high-energy, low-sulfur thermal and pulverised coal injection coal for the export market.

 

“We are extremely pleased by the minister’s decision to award project approval to the Narrabri Coal stage two project,” Whitehaven managing director Tony Haggarty said.

 

“The coal handling and preparation plant, and other key stage two facilities have already been designed and tendered, and construction will commence as soon as we complete the final steps in the approvals process, which includes final approval under the federal Environmental Conservation and Biodiversity Conservation Act.”

 

The installation of the Bucyrus longwall, which can be retrofitted for longwall top coal caving (LTCC), is scheduled for delivery in early 2011.

 

Installation at the first longwall panel is expected in the September quarter of 2011.

 

Full-time employment is expected to reach 208 once longwall mining starts, while more than 120 people and 25 contracting businesses were involved in stage one construction of Narrabri.

 

Stage one development is almost complete with only a final section of the third access drift remaining.

 

The second continuous miner unit is scheduled to head underground in August.

 

The final design of the CHPP will include a dense medium cyclone unit which is expected to produce up to 40% of the processed coal as a PCI product.

 

Construction of the CHPP is expected to take 12 months.

Stage two mining covers 26 longwall blocks targeting the bottom section of the 4.25-9m thick Hoskissons seam.

 

Each panel will be 305m wide and extracted to an average height of 4.2m, while the face height will be 3.5m high at the main gate and tail gate ends, matching the 3.5m-high gate entries.

 

Cover depths are expected to range between 160m and 180m over the eastern area of the minesite and extend up to 380m over the western ridge area.

 

The JV behind Narrabri consists of Whitehaven (70%), Upper Horn Investments (7.5%), Electric Power Development (7.5%), EDF Trading (7.5%), plus Daewoo International and Korea Resources Corporation (7.5%).

 

Quarterly production results

 

Whitehaven’s Tarrawonga, Werris Creek, Rocglen and Sunnyside open cut mines were impacted by wet weather in the March quarter but performed well in the June quarter.

 

Total run-of-mine coal production reached 1.19Mt for the recent quarter, up 11% year-on-year.

 

For the 2009-2010 financial year, production was 4.22Mt – a 20% improvement on the previous year.

 

June quarter sales of 1.04Mt were in line with the corresponding 2009 period, while sales for the recent financial year of 3.48Mt were up 24% from the previous 12 months.

 

Whitehaven purchased the Vickery coal project in the Gunnedah Basin from Coal & Allied in January for $31.5 million and the project is expected to produce metallurgical coal.

 

“Indications are that Vickery could provide Whitehaven with a significant increase in metallurgical coal reserves,” Whitehaven said in its quarterly report.

 

“There are nine coal seams contained within the Vickery tenements of which three, the Shannon Harbour, Stratford and Cranleigh seams, are believed to have economic potential.

 

“The quality of these coal seams ranges from high-volatile soft coking coal to low-ash, high-energy thermal coal.”

 

Whitehaven ended June with cash of $141 million.