Carborough Downs, Integra troubles raise questions about Vale coal

CONTINUED problems at Vale’s Carborough Downs longwall mine in Queensland and its reported failure to sell its Integra mine in New South Wales to Yancoal has renewed speculation the Brazilian giant may be downscaling its coal investment in Australia to focus on its global iron ore operations.
Carborough Downs, Integra troubles raise questions about Vale coal Carborough Downs, Integra troubles raise questions about Vale coal Carborough Downs, Integra troubles raise questions about Vale coal Carborough Downs, Integra troubles raise questions about Vale coal Carborough Downs, Integra troubles raise questions about Vale coal

Carborough Downs, image courtesy of Vale.

Lou Caruana

Vale yesterday declared force majeure at Carborough Downs after production had to stop on Tuesday because of dangerous levels of carbon monoxide at the mine.

An estimated 7700 tonnes of run of mine coal output has been impacted since the withdrawal of personnel on May 29.

In the first quarter of 2012, Carborough Downs produced 325,000t of metallurgical coal.

Meanwhile the Integra underground and open cut mine has reportedly been put up for sale by the company with the help of Merrill Lynch but so far has no takers, according to the Australian Financial Review.

“Merrill Lynch expects Vale’s Australian coal assets, its stake in aluminium producer Norsk Hydro and its oil and gas assets that could fetch a combined $US3 billion-plus may be put on the block,” the AFR said.

Vale did not respond to questions from ILN by press time but in the past a spokesperson said the company does not respond to market speculation.

The company was expected to be focusing on its Mozambique coal operations after earlier this week announcing it would be selling its Colombian thermal coal operations for $407 million.

The company is seeking to raise cash to fund its generous dividend payments and ambitious iron ore development program.

Earlier this year it withdrew from securing an allocation at the Abbot Point terminal despite holding tenements in the Galilee basin of Queensland that would need access to the port.

Vale also has several joint venture coal projects with Aquila Resources in Queensland’s Bowen Basin, including the Isaac Plains and Belvedere projects.

In March, the NSW Department of Planning and Infrastructure cleared Vale’s proposed extension of its Integra mine complex despite earlier problems in the past with safety at the underground mine.

The director general allowed Vale to modify its project approvals to extend the north open cut out-of-pit dump to the east and south and increase the maximum height of the north open cut emplacements from 135m to 141m.

The department’s assessment found the proposed modification would lead to minor additional dust impacts for residences, with levels remaining below relevant criteria and resulting in a slight increase in noise levels which were unlikely to lead to perceivable differences.

The open cut coal mining operations are located south of Integra underground and comprise the north open cut and south open cut, including the recently approved western extension.

The open cut operations produce both semi-hard and semi-soft coking coal (70%) and thermal coal (30%) for export.

The underground operation produces high quality, semi-hard coking coal for export, with the current approved production level set at a maximum of 4.5 million tonnes per annum of ROM coal.

Current approved maximum production levels are 1.5Mtpa of ROM coal from the north open cut and 4.5Mtpa of ROM coal from the south open cut.

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