Expansion on the cards for Wesfarmers

COST reduction is the future focus for Wesfarmers Coal as it finalises expansion plans at its Bengalla and Curragh sites.

Staff Reporter

While the Bengalla expansion hangs on infrastructure availability and is expected to be decided in the near future, the Curragh feasibility study results and a final decision are not expected until mid-2008.

Wesfarmers Coal managing director Stewart Butel said the Curragh East site has around 40 million tonnes of good quality coking coal.

Expansion plans involve an upgrade to the coal preparation plant to increase capacity to around 2000t per hour and additional plant equipment.

Also paramount to the project is the relocation of the Blackwater Creek that runs between the Curragh and Curragh East sites.

If given the go-ahead additional volume ramping up will be from late 2009.

Butel said the additional volume will be extracted by truck and shovel, raising cash costs per tonne; however, the option of installing another dragline is being looked into.

The mine currently hosts four Marion walking electric draglines for overburden removal, including a Marion 8750 super with a 103 cubic metre bucket and a P&H 2355, and produced a total sales volume of 8.7Mt in the previous year.

Operating costs are expected to decrease for the company this year with the commissioning of the Curragh North conveyor, reducing haulage on about half of the total coal produced and expected lower demurrage costs.

Butel said lower coal prices at annual price settlements do not accurately represent the market, which he sees as very tight with strong customer demand.

He said high stocks at steel mills led to a drop in demand late last year which was then counteracted by higher demand leaving the outlook for the coal price very promising.