The latest round of figures from the Australian Bureau of Agricultural and Resource Economics shows investment in the resources sector remains strong, despite a number of mining projects being put on hold as a result of the global financial crisis.
According to ABARE’s Minerals and energy, major development projects – April 2009 listing report, the downturn was not reflected in the value of advanced projects, but in the sliding number of new projects added to the list.
Eleven new projects were added to the list over the past six months, compared with 31 in the six months to October 2008 and 58 to April 2008.
“Despite the uncertainty inherent in projects at these earlier stages of consideration, the significant number of large-scale projects at less advanced planning stages is expected to provide a firm platform for future growth in Australian minerals and energy production in the medium term and beyond,” the report stated.
Coal projects finished over the past six months chipped in $A1.3 billion towards a total capital cost of completed energy projects of $1.8 billion.
The largest project was Anglo Coal and Mitsui’s $US726 million Lake Lindsay mine in Queensland’s Bowen Basin, which will produce 4 million tonnes per annum, comprising 1.9Mt of hard coking coal, 1.8Mt of PCI and 300,000t of thermal coal.
Also completed in the Bowen Basin was the 4Mtpa Vermont coal project at a cost of $264 million.
In New South Wales, Whitehaven Coal commissioned the $35 million, 1.5Mtpa Rocglen thermal coal mine.
As of April 2009, energy projects accounted for 42 of the 74 advanced projects on ABARE’s list.
Coal mine and coal infrastructure projects accounted for 24%, or $10.4 billion, of the capital cost of all advanced energy projects.
The largest coal mine development is Rio Tinto’s $US1.3 billion Clermont open cut mine in Queensland. The mine, due for completion in 2010, will produce 12Mtpa of thermal coal and will replace production from the existing Blair Athol mine.
Another Rio Tinto project, the $US991 million Kestrel longwall, will have an increased annual production capacity of 1.7Mt of coking coal. Rio Tinto has previously said construction work at Kestrel will slow in response to falling coking coal demand; however, it is currently scheduled to finish in 2012.
Xstrata’s $1 billion Mangoola (formerly Anvill Hill) development in NSW is expected to produce 10.5Mtpa of thermal coal from 2011.
Also in NSW, Felix Resources will be working towards completion of Stage 1 of the Moolarben project.
The 8Mtpa open cut segment of the $405 million project is expected to ramp up in 2010, with the 4Mtpa underground operation anticipated to start extracting from 2012.
The report pointed out there were another five advanced projects worth $1.2 billion expected to raise coal production capacity by around 7Mtpa over the next three to four years.
ABARE said the large number of coal projects recently commissioned and scheduled for completion in the short to medium term had provided the impetus for expanding the capacity of coal infrastructure, both rail and port.
At the end of April 2009, there were seven coal terminal expansions and five rail expansions either committed or under construction.
The first stage of the $US1.1 billion Newcastle Coal Infrastructure Group terminal is expected to be finished in early 2010, to export 30Mtpa.
Also at Newcastle Port, Port Waratah Coal Services is completing a $456 million expansion and refurbishment of the Kooragang Island Coal Terminal, which will increase annual capacity by 11Mt.
In Queensland, the $818 million Abbott Point Coal Terminal X50 expansion, which will double capacity to 50Mtpa, is due for completion in 2011.
The $679 million Dalrymple Bay Coal Terminal 7X expansion due for completion in the middle of this year will expand capacity by 17Mt.
Major rail projects include the $500 million Jilalan Rail Yard upgrade, duplication of the track between Coppabella and Ingsdon, and the Stanwell to Wycarbah upgrade.
The listing’s less advanced projects comprise 59 prospective projects worth $38 billion.
ABARE said projects new to the list included Gujarat NRE Minerals’ proposed $250 million expansion at the NRE No. 1 Colliery mine near Wollongong. The expansion is expected to increase production to 3Mtpa, as well as upgrade existing surface infrastructure and build new infrastructure.
Felix Resources is progressing a $120 million development plan for Stage 2 of its Moolarben mine, which will increase output by 12Mtpa from the open cut mines and 4Mtpa from two underground mines.