The Angus Place mine in the Western Coalfield of New South Wales achieved record saleable production of 3.4 million tonnes for the recent financial year.
The mine achieved this rate mainly from the first panel to be mined using its new longwall equipment.
During the longwall change in March, Centennial took the opportunity to modify its longwall equipment and Cameron was pleased with the outcome.
He made sure there was an image of the longwall in the results presentation yesterday.
“Being a mining engineer, I had to stick the photo in, because it’s fantastic isn’t it?” he said.
“You would put that on the lounge room wall. It’s a really good-looking longwall and it has performed very strongly.”
The Clarence Colliery put its Joy flexible conveyor train (FCT) into production in May.
Cameron and other Centennial senior personnel saw the FCT over in America and were convinced it would suit the conditions at Clarence.
“It’s already had a best shift of 3205 tonnes which is around twice what our conventional units will do with shuttle cars,” Cameron said.
“We’ve had a best week already from this unit alone of over 21,000 tonnes and look it’s barely underway.”
He can see huge upside with the FCT and said it would have more applications at Clarence and potentially at Airly and at Centennial’s other continuous miner operations.
On the project front, Centennial is continuing exploration for its Mandalong South Extension project to allow the longwall mine to continue well into the future.
The main focus is the Newstan Lochiel Project adjacent to its existing Newstan mine in the Newcastle Coalfield.
The prefeasibility study is nearing completion but there are still two mining options under consideration.
One is for a potential 4Mtpa run-of mine longwall operation and the other is for a continuous miner operation using a flexible conveyor train.
With 197 million tonnes of resources, the project differs from Centennial’s main thermal coal plays as it holds semi-soft coking coal.
Cameron said the project could produce a good quality Hunter Valley semi-soft product which again is in relatively short supply.
“A lot of the big new thermal coal mines in the Hunter simply don’t have semi-soft,” he said.
Drilling is underway at the northeastern end of Angus Place, while Centennial already plans to expand the mine to 4Mtpa of run-of-mine coal production.
Commenting on the drilling, Cameron said enough was already done to confirm an additional four panels but a lot of the seam up there was of a lower height than what was being extracted.
Consequently, he said Centennial was looking at a potential plan to establish a new low-height longwall.
As part of the longer term goal, Cameron said feasibility studies were continuing at Angus Place and the nearby Springvale mine to possibly create a “super pit” capable of 7Mtpa.
The new Airly mine started exporting coal in April and Cameron said the conditions were encouraging and with no surprises.
The underground continuous miner operation was established through entries off a small open cut, allowing Centennial to avoid costs in shaft sinking or driving drifts.
Exploration is planned for Centennial’s new Inglenook exploration project , west of its Charbon Colliery, with a prefeasibility study underway.
The project encompasses a large area with four exploration licences while inferred and indicated resources already total 256Mt.
Coal markets and Banpu
Cameron said the company was continuing to receive “constant enquiries from both its new and existing customers”
While noting the current spot price of thermal coal was lower than the benchmarks at about $US86 a tonne, he said discussions with Centennial’s serious long-term customers involved prices around the contract price.
Cameron said most customers were looking for security of supply and reliable counter parties with a history of meeting their obligations.
He clarified that China was clearly now a significant net importer of thermal coal with a billion people in the country “still waiting to turn on power”
Cameron will also be in China next week as Centennial is getting its own rail wagons and coal hoppers made in the country to tackle rail constraint issues in New South Wales.
Reflecting the strong coal market fundamentals, interest in Australian coal stocks has been strong for the past few years, but especially in recent times.
“Centennial and Banpu seem to have created this tsunami of M&A type activity and discussion with respect to Australian coal companies,” Cameron said.
Banpu is awaiting Foreign Investment Review Board approval for its $2 billion takeover of Centennial.
The looming federal election this Saturday is causing FIRB approval delays with Banpu willing to extend its $6.20 per share offer until September 6.
An independent expert for the deal noted it was fair and reasonable and valued Centennial shares in the range of $5.74 to $6.36 each.
Banpu owned 26.76% of Centennial as of Friday.
Cameron added that Banpu was aiming to export Centennial’s coal to exactly the same customers.
Centennial shares closed down 1c to $6.03 yesterday.