Southland problems hoped over

REPORTING on the December 2002 quarter Gympie Gold said strata management problems at its Southland colliery were to blame for $9 million of the

Staff Reporter

According to Gympie's quarterly report, the recent problems at Southland have been due to longwall face stability problems, primarily relating to a zone of poor ground conditions.

Early in the December quarter the longwall unit was graded up to mine the upper portion of the seam, which improved roof integrity. Face stability was further increased by reducing the longwall cutting horizon and changing longwall procedures to reduce the span of unsupported coal in front of the longwall face.

This proved successful with October’s run-of-mine production achieving more than 100,000 tonnes. However, further difficult ground conditions restricted production for November and December to a total of less than 100,000 tonnes.

By the end of December 2002, Southland had mined through the zone of in-seam shearing and was returning the longwall unit back down to the seam floor, where mining conditions and coal quality are expected to support much improved production rates.

“This transition to the base of the seam requires complex strata management,” Gympie said. “In early January, a roof fall at the longwall face occurred that is expected to delay the transition to the seam floor until mid-February. During this transition period, low production rates are likely to continue as the longwall progresses slowly and safely downward to the bottom of the seam.”

Southland currently has approximately 3 million tonnes of coal developed and ready to extract, which is worth approximately $175 million in revenue terms. The outlook for 2002-03 has been updated to 1.2Mt coal output for the year.

To underpin the production of 2Mtpa Gympie has decided to bring forward the modernisation of the longwall face equipment, previously scheduled for 2006.

Gympie recently bought the near-new longwall face from the closed Moonee longwall mine near Newcastle. Replacement of the key half of the old longwall will take place toward the end of 2003 to coincide with commencement of the next longwall panel SL4.

The package, which includes upgrades to the entire longwall, is expected to cost under $10 million compared with the $50 million previously scheduled for a new longwall.

Gympie also announced the formation of a new alliancing contract between Southland Coal and operator Thiess, which started in November 2002.

The contract is characterized by full transparency in cost and performance measurement through an open-book approach and integration of the management teams of the owner and contractor. The contractor’s margin and administrative overheads are minimized.

Speaking to last week managing director Harry Adams said: "Shareholders are undoubtedly disappointed but no one's more disappointed than I am in the results from the colliery for the six months period. So it comes with the territory, to occasionally feel disappointment when you are doing something so big and challenging."