Ausenco clinches Bandanna's Springsure contract

AUSENCO has been awarded a contract to provide project management and engineering support services for Bandanna Energy’s Springsure Creek Coal project in Queensland’s Bowen Basin.
Ausenco clinches Bandanna's Springsure contract Ausenco clinches Bandanna's Springsure contract Ausenco clinches Bandanna's Springsure contract Ausenco clinches Bandanna's Springsure contract Ausenco clinches Bandanna's Springsure contract

Drilling at Springsure Creek. Image courtesy of Bandanna Energy.

Lou Caruana

Ausenco will deliver an engineered budget, schedule and execution plan to allow Bandanna Energy to finalise the design and capital cost of the project by June 30.

Stage 1 of the Springsure Creek Coal Mine Project involves a single underground longwall with a production capacity of 5.5 million tonnes per annum, with an estimated capital expenditure of $743 million.

Bandanna Energy is scheduling to start production in mid-2015.

Ausenco CEO Zimi Meka said: “We are delighted to be working with Bandanna Energy on the Springsure Creek project, the most advanced thermal coal project in the country.”

Since completing the definitive feasibility study, Bandanna has continued detailed work to optimise planned coal production from the project.

The DFS, completed in December 2012, was undertaken based on the production of up to 11Mtpa from two longwalls, each targeted to produce 5Mtpa with approximately 1Mtpa of development coal.

Forecast FOB operational costs (excluding royalties) from that production were assessed to be $65.61/tonne.

“Since that time, increased confidence regarding mining conditions as a result of additional drilling and geotechnical assessment has enabled optimisation of production plans,” Bandanna said.

“Independent external mine planning has confirmed that a single longwall at Springsure Creek is now forecast to produce more than 7Mtpa in line with experience with similar modern high production longwall projects both within Australia and overseas.

“The forecast improvement in longwall utilisation, and the consequent increase in forecast production, has lowered the project’s estimated FOB operating costs (excluding royalties) to $59.80/tonne.”

Commenting on the lower operating cost estimates, Bandanna Energy CEO Michael Gray said: “Additional drilling has confirmed the consistent quality and thickness of the target Aries 2 seam, and the ability for greater production from a single longwall.

“The resultant reduction in forecast operational costs further enhances the competitive position of the Springsure Creek project compared with much existing thermal coal production.”

With the optimisation of mine planning and production schedules now complete, Bandanna is seeking to finalise capital costs for the project and is confident of a “significant opportunity for a reduction in capital costs as a result of optimised project design and changing market conditions”.