Continuous miners are cutting the coal at the Narrabri mine in the Gunnedah Basin of New South Wales.
The second CM unit started last week while the third is due underground in November.
Once longwall mining starts up next year, Whitehaven aims to cut a 4.2-metre bottom section of the 8-9m thick Hoskissons seam for the first two panels of the 26-panel mine plan.
These two 4-kilometre long panels will provide Whitehaven with the necessary geotechnical knowledge to evaluate the option of longwall top coal caving for the remaining blocks.
The Bucyrus longwall equipment can be retrofitted for this purpose, and Whitehaven notes this could be done during a normal longwall change-out.
Should LTCC mining be feasible, Whitehaven will be able to double the remaining 4km-long and 300m-wide panels from 6Mt of raw coal to 12Mt.
This will obviously extend the mine life as the company estimates an extra 300Mt in resource recovery.
The choice of LTCC over conventional longwall mining at Narrabri is expected to reduce development costs, plus lower costs associated with gas management as spontaneous combustion risks are also reduced.
On the other hand, Whitehaven will need to substantially upgrade its facilities on the surface, especially the wash plant which will have to take care of the full seam.
The longwall equipment is scheduled to arrive in January while all contracts for the stage two plans for longwall mining have been awarded.
Whitehaven has gone ahead with plans to add a dense-medium cyclone to the second-stage upgrade of its coal handling and processing plant.
This is expected to result in a 40% pulverised coal injection coal product with the remaining output as thermal coal.
Sedgman has started the construction of the stage two CHPP and this project is scheduled to finish in May 2011.
Under Whitehaven’s production goals, its four open cut mines in the state are expected to achieve up to 5.5Mtpa of saleable production by 2013 while Narrabri is slated to reach about 6Mtpa.
Whitehaven is expecting another 15-20 years of life out of its wholly owned Werris Creek mine which is permitted to produce up to 2Mtpa of PCI and thermal coal.
Whitehaven’s Rocglen mine has another 9-10 years of life for 1.5Mtpa in run-of-mine output while its 70%-owned Tarrawonga mine can produce 2Mtpa ROM for 15-20 more years.
The wholly owned Sunnyside mine in the Gunnedah Basin is looking at more than 20 years of up to 1Mtpa ROM production.
While entrepreneur Nathan Tinkler has already recouped a lot of the $A480 million he paid Coal & Allied for the Maules Creek project in the region by floating Aston Resources, Whitehaven is yet to fully evaluate the Vickery project in the Gunnedah Basin it acquired from Coal & Allied for $31.5 million.
Vickery’s Bluevale open cut resource is 15.5Mt, while the rest of the project hosts 292.7Mt of open cut resources and 22Mt of resources amenable to underground mining.
Whitehaven plans to further extend the known Bluevale open cut area while it notes the seams contain a range of soft coking coal, semi-soft coking coal, PCI coal and high-quality thermal coal.
The company has a total of 1.63 billion tonnes of resources across its portfolio of mines and resources, with 339.43Mt measured, 594.08Mt indicated and 699.5Mt inferred.
Total marketable reserves are 318.1Mt, including 133.64Mt proved and 184.43Mt in the probable category.
Whitehaven’s total share of ROM coal production reached 3.72Mt for the recent financial year, up 23% from the previous 12 months.
Saleable coal production was up 24% year-on-year to 3.48Mt, while sales increased 16% to 4.13Mt.
Lower coal prices and various infrastructure costs weighed down on earnings with net profit after tax falling 53% year-on-year to $A114.9 million.
Nevertheless, Whitehaven ended June with available cash of $141 million and “sufficient” funding to complete the $300 million stage two development of Narrabri and the expansion of its open cut mines.
A fully franked final dividend of 2.8c per share is scheduled to be paid on September 30.
Shares in Whitehaven closed down 6c to $6.05 yesterday.