The coal stories that counted: part 3

EMERGING from despondency, coal companies racked up production and development notches in the third quarter with a record-breaking performance from Newlands Northern, development at Blakefield South, expansion plans at Mt Arthur and the start of mining at Carborough Downs, Wongawilli and River View.
The coal stories that counted: part 3 The coal stories that counted: part 3 The coal stories that counted: part 3 The coal stories that counted: part 3 The coal stories that counted: part 3

An aerial view of the Mt Arthur Coal operation

Angie Tomlinson

July

On one hand, Xstrata cut workers at Ulan and Tahmoor, but on the other announced it would re-open the Oaky No. 1 mine. At the beginning of the month Xstrata started making 280 workers redundant from Ulan and Tahmoor.

Later in the month, Xstrata announced it would re-open Oaky No.1 after suspending production in December. The plan was to move the development crew over to provide short-term production for spot sales the miner had secured.

In more good news, Centennial Coal revealed the Mandalong longwall’s stellar year, breaking previous production records. The mine looked on track to deliver 4.88 million tonnes for the year.

BHP Billiton approved the expansion of its Mt Arthur coal mine in the Hunter Valley of New South Wales, opening the door to increase output at the open cut from 11.5Mtpa to 15Mtpa.

BHP will spend $US260 million on the expansion work which is expected to start up in the first six months of 2011 and will see 190 more workers employed at the mine.

While some confidence seemed to be creeping back into the market, it wasn’t soon enough for Waratah Engineering. The underground coal mining and tunnelling machine supplier entered voluntary administration.

In the United States, the coal industry was still suffering. Alliance Resource Partners laid off 72 workers at its Pontiki Excel complex in Kentucky, and usual strong performer Arch Coal announced a $US15.1 million loss for the second quarter due to weaker demand.

Meanwhile, Massey and Foundation were busy sorting their reserves for more efficient future production.

Massey acquired about 23Mt of reserves and operating assets, including Foundation’s idle Laurel Creek complex in Mingo County, and adjacent to its existing North Surface mine and Feats rail loadout.

In return, Foundation created a contiguous reserve in the Harts Creek/Atenville area through its receipt of over 19Mt of steam and metallurgical-grade coal. The Maryland operator now holds a reserve block in the area totalling more than 120Mt.

On the technology front, Bucyrus Australia signed a non-exclusive worldwide licensing agreement with CSIRO Exploration and Mining, giving it access to CSIRO’s LASC longwall automation technology.

August

The big news this month was the launch of Yanzhou Coal’s $3.3 billion takeover bid for Felix Resources.

Lauded China’s biggest acquisition in Australia, the deal was just this week approved by Felix shareholders after clearing Chinese and Australian regulatory hurdles.

In August, it emerged Xstrata’s Newlands Northern mine had been churning out coal to become Australia’s top producing longwall. The mine set new weekly and monthly production records and toppled Beltana from its traditional mantle.

However, Beltana is not down and out yet and will emerge in a new guise next year. This month, the surface mini build of longwall equipment for the Blakefield South mine began. Blakefield will take over coal production from Beltana in the first half of next year.

Back from the dead was the old Elouera mine re-birthed as NRE Wongawilli. The NSW southern coalfields mine entered the final stages of commissioning this month with a refurbished and reinstalled longwall.

Gujarat plans to increase run-of-mine production from the 179,000t produced in the 2009 financial year to annual production of 1.5Mt.

In further good news, Hancock Prospecting said it would consider longwall mining at Kevin’s Corner in Queensland’s Galilee Basin and kicked off the environmental impact study for the neighbouring Alpha Coal project. Both massive operations are expected to produce 30Mtpa each.

Also in Queensland, Ensham Resources revealed the Ensham Central project in Queensland would chiefly use longwall and bord and pillar mining instead of open cut mining as first envisaged.

The decision was based on market conditions, lessons learnt from the 2008 flood and community pressures.

In the US, Alpha Natural Resources and Foundation Coal officially merged. The new company, Alpha Natural Resources, became the third-largest producer in the US behind Arch Coal and Peabody Energy with more than 60 mines and 14 preparation facilities and control of more than 2.3 billion tons of reserves.

Producer Murray Energy announced it was diversifying into original equipment manufacturing with the opening of subsidiary American Equipment and Machine in Illinois.

The new company is producing and rebuilding customised longwall equipment exclusively for Murray Energy.

September

This month, the Carborough Downs longwall produced first coal. The combination of Eickhoff shearer with LASC, Tagor roof supports with Tiefenbach electro-hydraulic control systems and Inbye Mining Systems’ armoured face conveyor was up and running by mid-month.

Whitehaven’s Narrabri mine announced it had selected Bucyrus to supply equipment for the prospective longwall.

The OEM will supply a longwall capable of being retrofitted for top coal caving with delivery scheduled for October 2010.

The long-running stand-off between mining companies and farmers in the Liverpool Plains found new clarity this month when the NSW government announced amendments to the special conditions of BHP’s exploration licence, preventing the company from applying for a mining lease that includes longwall mining underneath the deep alluvial irrigation aquifers, and longwall or open cut mining underneath the floodplains.

BHP had already made a public commitment that it wouldn’t longwall mine the floodplains, but the mining lease cemented the agreement.

Recommendations from the inquest into the death of Jason Blee, who was crushed between a shuttle car and the rib at a bord and pillar section of Moranbah North in 2007, were released this month.

The Queensland coroner has made 18 safety recommendations which have been put into practice or are planned.

At the Bluefield Coal Show in West Virginia this month, Joy Mining Machinery and Matrix Design Group announced their partnership to develop and distribute continuous miner proximity protection systems.

The agreement gave Joy the sales rights, installation and service of the systems while collaborating with the Kentucky supplier on additional development and efforts to continually refine the system.

In more positive US news, Natural Resource Partners acquired more than 200Mt of coal reserves in Illinois and the beginnings of a new longwall development expected to produce up to 10Mt a year.

NRP bought the Deer Run mine from Cline Group for $US255 million. Initial production from the mine is expected in 2010, with longwall production to start in 2011.

Alliance Resource Partners got the $270 million River View room and pillar operation up and running this month. The 600-worker complex is expected to hit prime production levels by mid-2010.

In technology news, Consol Energy, West Virginia University, and the National Energy Technology Laboratory began a $US13 million field trial in West Virginia to enhance coalbed methane recovery with simultaneous carbon dioxide sequestration in an unmineable coal seam.

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