The large Hail Creek open cut mine is looking at a rate of 8 million tonnes per annum of raw coal production for the next six months but Rio’s long-term planning work will assess optimal open pit scale and “underground options”
But the leading opponent of the resources super-profits tax told attendees of this year’s Australian financial community site visit that the tax created uncertainty for these plans at Hail Creek.
Over to the Kestrel Mine Extension project, Rio said it was slightly behind schedule with first mining under the higher 5.7Mtpa setup to start in late 2012 or even in 2013.
While the longwall mine is expected to produce 4.3Mt of run-of-mine coking coal for this financial year, Rio said there were future thermal coal options within the Kestrel West project.
The massive Clermont open cut mine kicked off in May and is ramping up to a rate of 12Mtpa of ROM coal while the Blair Athol mine it will replace is winding down to 3Mtpa.
Looking at the infrastructure arrangements for its Queensland coal operations, Rio said the total throughput expansion from 20Mtpa to 50Mtpa is underway.
While there is enough contracted capacity for future Clermont, KME and Hail Creek production, Rio noted that further port expansion options exist at Abbot Point while Prime Infrastructure is investigating further expansion at the Dalrymple Bay Coal Terminal.
Rio took issue with the Goonyella coal chain which is performing far below contracted levels.
This results in lost sales and added demurrage costs with the rail system not keeping up with port throughput capacity.
In the case of DBCT, which hit nameplate capacity of 85Mtpa in mid-2009, a DBCT spokesperson recently told ILN the rail capacity feeding the terminal was running at around 72Mtpa.
On a brighter note, Rio said the Goonyella to Abbot Point Expansion project will open up access to Abbot Point while the possible industry ownership of Queensland Rail’s coal tracks could address rail-side delivery, planning and performance issues.
Rio also provided updates for its 76%-owned subsidiary Coal & Allied.
While the major Hunter Valley producer’s prefeasibility study for the Mount Pleasant project is nearing completion, the 8.5Mtpa thermal coal project to develop the open cut north of the Bengalla mine is now under review.
Coal & Allied also placed the ramp ups of Bengalla to 7.5Mtpa of saleable production in the first stage and 8.5Mtpa in a second-stage expansion under review.
Rio illustrated the impact of the RSPT on its growth plans using graphs.
Rio shares closed up 2.1% to $72.34 yesterday while Coal & Allied shares gained 21c to $93.70.
