The coal stories that counted: part 4

THE last quarter of the year was marked by several mine approvals, including an expansion at Austar, continued mining at Bloomfield, environmental go-ahead at Daunia, and federal recognition for the China First project.
The coal stories that counted: part 4 The coal stories that counted: part 4 The coal stories that counted: part 4 The coal stories that counted: part 4 The coal stories that counted: part 4

Coal trucks at Coppabella. Image courtesy of Macarthur Coal

Angie Tomlinson

October

Oaky North revealed it had exceeded all previous shift, daily, weekly and monthly longwall production records and was well on its way to challenging the Australian annual longwall production record.

Oaky North produced a massive 29,642 tonnes (30,840 run-of-mine tonnes) from the longwall in a 12-hour shift, and in more than 24 hours achieved 56,890t (58,637t ROM).

A deal was struck between Queensland Rail, Aquila Resources and Vale Australia to connect Bowen Basin rail with Abbott Point Coal Terminal.

The agreement paved the way for the development of the Eagle Downs longwall which is at definitive feasibility stage, with final approval due mid-2011. A logistics solution for Eagle Downs was essential to its future.

Hail Creek got cracking on constructing a brand-new rope shovel onsite, which it commissioned in November ready to lift production 25% to 7.5 million tonnes next year.

The Austar longwall top coal caving mine received approval from the New South Wales government to start its stage 3 expansion covering longwall blocks A6 to A17, estimated to produce 45.3Mt over a 21-year mine life.

The privately owned Bloomfield colliery also received approval to continue mining and recover an additional 14Mt of ROM coal.

Felix Resources grabbed more headlines this month as the Foreign Investment Review Board dragged its feet on the decision to approve the Yanzhou takeover.

Felix did get the green light and the deal looks to go through by the end of this year.

In supplier news, after a disastrous year for Waratah Engineering, some good news arrived with Polish group Kopex announcing it would purchase the company, bringing it out of voluntary administration.

Retrieving companies from bankruptcy was a theme this month when, across the other side of the world, Massey snapped up the assets of Appalachian Fuels.

The deal gave the US producer 23Mt of reserves, a permitted preparation facility and refuse area, permitted deep and surface mines, infrastructure and some mining equipment.

November

November marked a good month for coal projects with several mines being fast-tracked by government.

The federal government gave major project facilitation status to Waratah Coal’s proposed $7.5 billion China First coal mine and infrastructure development, adding to the significant project declaration already instated by the Queensland government on the Galilee Basin development.

The status is supposed to give the project a timely and efficient approvals process.

The Queensland government also declared the Vale and Aquila Resources $2 billion Belvedere longwall project in the Bowen Basin as significant.

BHP Billiton Mitsubishi Alliance’s $625 million Daunia mine in the Bowen Basin was given environmental go-ahead.

Construction of the 4Mtpa mine is expected to begin in early 2010 and operations will start in 2011.

Coal & Allied struck a deal to sell its undeveloped Maules Creek project in the Gunnedah Basin to Tinkler Group’s Aston Resources for $480 million cash this month. Maules Creek has total coal resources of 398Mt.

A downer during the month was Vale’s closure of the Broadlea mine, where 80 jobs were cut. Vale attributed the closure to lower Australian dollar sales prices, continuing low yields and high fixed-to-variable cost ratios relative to volumes.

In contractor news, WDS won the stage 1 expansion of Peabody Energy’s Metropolitan and development work at BMA’s Broadmeadow operation.

Making headline news in the United States, billionaire Warren Buffett and Berkshire Hathaway bought large rail shipper Burlington Northern Santa Fe for $US34 billion.

Buffett said the country’s future prosperity depended on having an efficient and well-maintained rail system.

December

Despite the slowdown into Christmas, news is still trickling in from the coal industry.

Waratah Coal chief executive Peter Lynch detailed his plans for the China First project, which includes an extensive underground section. Four longwalls each producing 9Mtpa are expected to be built, along with two surface mines kicking in 20Mtpa.

The $US5.15 billion project will begin construction late next year with first coal expected in the third quarter of 2013.

Gujarat NRE Minerals revealed it was making progress at its Wonga project, driving all three of its underground roadways more than 1km as it works towards longwall operations at the NSW project by the 2014 financial year.

At Gujarat’s working Wongawilli longwall mine, operations have ramped up from 8000 tonnes per week to 23,500t/week, reflecting the potential of the mine.

Capping off a successful year, rail provider Asciano won the $A500 million, 12-year contract to haul coal from Idemitsu’s Boggabri mine in the Gunnedah Basin and a 10-year deal with Aquila Resources and Vale to haul coal from the Isaac Plains mine.

This year the start-up phase of Asciano’s Queensland operations has delivered more than 4Mt.

Small producer Caledon Resources announced it had given up on its quest to sell the company after 10 months. Caledon will now focus on increasing production at its Cook mine and developing the Minyango project.

In the US environmental groups made a major impact on the Fola operations in West Virginia, with owner Consol Energy blaming law suits from these groups for the idling of the operations.

Consol said it would close the operation from February 2010, making redundant nearly 500 workers at two mines.

While it will be forced to close one mine, Consol was busy ensuring it had buyers for its output by appointing Xcoal as its selling agent in Beijing, Seoul, Tokyo and Singapore.

Xcoal will sell Consol-branded coal of metallurgical grade from the Buchanan mine in Virginia and the Bailey mine in Pennsylvania and will exclusively market thermal coal output from Consol’s northern Appalachian properties.

Several major stories broke at the end of the year, the least of which was Bucyrus’s $US1.3 billion purchase of Terex.

The deal covers Terex’s hydraulic mining excavators, electric-drive mining trucks, track and rotary blasthole drills, and highwall miner, as well as the related parts and aftermarket service businesses O&K, Unit Rig, Reedrill, Superior Highwall, Halco and Hypac.

Bucyrus will pay cash for the company, but Terex has the option to take $300 million in Bucyrus shares.

Big news broke just before Christmas with the proposed takeover of Gloucester Coal by Macarthur Coal. While Macarthur is still thrashing out some of the detail with Gloucester’s major shareholder, Noble Group, an offer has been made with a bidder’s statement due in February next year.

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