Final roll of the dice for Queensland mine - Part 1

Staff Reporter

One of the country’s highly-credentialled new longwalls has failed to meet performance expectations. The latest lifeline could be its last.

The new man at the helm of one of central Queensland’s most troubled underground coal mines, North Goonyella, believes he has inherited what is needed to ramp up production to more than four million tonnes per annum. This would finally set the operation on the course Japanese owner Sumitomo has pursued since start-up in February 1994.

And it would be another feather in the cap of general manager Brian Nicholls, whose most recent management stint in the Bowen Basin led to the revitalisation of MIM Holdings Ltd’s Oaky Creek operation.

Upon arriving at North Goonyella in April, Nicholls immediately set about making the changes necessary to restore Sumitomo’s, and customers’, confidence in the high-quality coking coal producer. In his words the key changes have included a restructuring of the mine management team, and redefining of the mine’s culture and attitudes towards the workforce. Efforts had also been made to refocus the attention of all site personnel onto the core production and maintenance areas.

Late last year Sumitomo was left somewhat high and dry after American operator Cyprus Amax Minerals Company elected not to pick up equity in the mine, signalling a retreat from the Australian coal scene. Sumitomo, which has long wanted to sell a portion of the mine, approached Nicholls to run an operation best known for burying longwall faces.

The longwall at North Goonyella extracts 4.5m of the Goonyella Middle Seam, making it one of the country’s top thick seam operations. This, coupled with some complex geotechnical challenges which include complex reverse thrusting faults, have presented management with problems from day one. In fact, they appear not to have been overcome at all.

During a rare media visit to the mine, Australia’s Longwalls was told by Nicholls equipment problems had compounded the challenges posed by North Goonyella’s “natural” drawbacks.

“When you get normal faults crossing reverse thrust faults as we do, particularly on the southern side, it’s a very unstable geotechnical problem,” he said. “If combined with that you have a series of technical problems, like engineering problems with the supports on the face, you’ve then got a very major problem.”

When Nicholls arrived, mining of LW5 south was a struggle. Constant roof support failure was contributing to problems such as the roof breaking up in front of the face, causing lengthy stoppages and creating a need for manual extractions. All of which slowed coal output to a trickle. At the same time, development of LW1 north had just been completed so that both faces could be mined simultaneously for annual output of about 4.5mt. By then, however, the predicament in LW5 had worsened to the point where Nicholls decided to simply stop the face and secure it until a decision could be reached on the best way to retrieve the situation. The focus meanwhile shifted to getting LW1 north up and running at budgeted capacity. To help achieve this Nicholls brought in various specialist consultants such as Chris Taylor of CT Mining to help sharpen the overall operational focus on the longwall.

Working out precisely what went wrong with LW5 taught management some useful lessons, and not only about geotechnical challenges.

An audit by equipment supplier Joy Mining of a random batch of the original Gullick supports found failing blipper valves were causing the shields to lower before they reached their specified yield. Resultant failure, while not a safety threat, caused the roof to break up in front of the face. This exacerbated already difficult geotechnical conditions.

Remedial action, expected to cost $13-15 million, will require an overhaul of all support hydraulic legs as well as updating of the shield control systems. According to Nicholls, maintenance issues were quickly identified as priority items in need of being addressed by the new management team. Other longwall components had also been neglected, apparently the result of the operation being primarily “breakdown maintenance oriented”

“People were focused on running the operation seven days a week and never got down to the basics of a good preventative maintenance program,” Nicholls said. “The end result of that is we have some fairly substantial maintenance catch-up to undertake over the next few months.”

Further complicating the path to smooth operations at North Goonyella is the seam extraction height, something Nicholls admits to being somewhat equivocal about.

“When you look at the resource and you look at what’s invested in a mine like this, which is the best part of $500 million, then you really need to get as much coal as you can to minimise the actual capital invested per tonne of recovered coal,” he said.

“So you need to mine as high as possible to maximise the resource recovery and minimise capital cost.

“On the other hand mining at 4.5m is a game only a few players have played in Australia. In Europe, where they have mined like this (longwall) for a number of years, they never mine at the rate needed here to make money out of the operation. My belief is that at a mine like this you might be better off mining a lower seam section — extracting about 4m and losing some of the resource, but at least maintaining consistent production so you’re generating cash.”

Such a strategy has its own hurdles. The North Goonyella equipment, for instance, limits operating parameters to a between 3.6-4.5m. At 3.6m “you are squeezing in the equipment”, according to Nicholls. “There is no room for any mistakes with horizon and you can get into a situation of ‘letterboxing’ the face.”

Another matter requiring attention is exploration. Over the next six months a major drilling program in the north of the lease, and a 3D seismic program focused on the southern side of the mine, is to be undertaken. Management hopes the work will delineate in the region of 40mt of coal. They also expect to define a resource, to support about five years of mining, at a level of detail which will allow accurate and optimal panel placement as well as predicting output and coal quality.