The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/830355
8 | ASIA Miner | Volume 14 • Issue 2 | 2017 Future of Coal THE rally in coal prices over the past 12 months has prompted a rush to restart moth- balled mines, resume mine expansion plans and launch new mines in coal mining centres around the world. The coal industry upturn has created thousands of jobs and provided fresh hope to mining communities and fam- ilies whose fortunes nose-dived as prices plunged in 2014. In Australia the industry's revitalisation has been of most benefit in the large, traditional coal mining regions of Queensland and New South Wales, while there has been renewed interest in the newer coal regions in both states. The Minerals Council believes the industry has a rosy future and its CEO Stephen Gal- ilee said the recovery was providing an op- portunity to deliver jobs and investment over the coming years, as well as more royalties for mining communities. NSW Resources Minister Anthony Roberts said coal would remain a very important en- ergy source for Asia, even as the transition to alternative energy sources gathers momen- tum. The same sentiments are shared by government and industry representatives in Queensland. Private, family-owned company Bloomfield Group is one of many coal companies that have taken advantage of the upturn through its operations in the Hunter Valley of NSW. Its chairman John Richardson is quietly opti- mistic about the rising coal price. "We believe demand will remain strong in the north Asian countries and probably over time be supple- mented by some of the South East Asia coun- tries as they come on line." Bloomfield has played an important part in the upturn in the Hunter Valley as it acquired Vale's former Camberwell mine, re-named it Rix's Creek North and reopened it in 2016 as the coal price surged. It advertised 100 jobs and received 1000 applications. Elsewhere in the Hunter, Glencore is re- opening the Integra underground mine, plans to expand the Mount Owen mine, and has lodged an application to develop a new mine combining the existing open cut at Wambo Coal with a new open cut at United Collier- ies; Mach Energy plans to restart the Mount Pleasant mine, which it bought from Rio Tinto, in 2018; Australian Pacific Coal plans to re- develop Dartbrook mine; and there is interest in Anglo American's Drayton South mine. Also in NSW, Jindal Steel & Power is ramping up output at the Wongawilli mine, which its sub- sidiary Wollongong Coal reopened last year. The story is similar in Queensland's Bowen Basin, although there has been a short-term setback with flood damage caused by Cy- clone Debbie. Cockatoo Coal has emerged from voluntary administration and is restart- ing production at Baralaba North; Mineralogy plans to establish the Styx coal project involv- ing two open cut operations with a 20-25 year mine life; New Hope Group has received approval for a $900 million expansion of New Acland mine which will increase annual pro- duction to 7.5 million tonnes; Pembroke Re- sources aims to build a coal mine at Olive Downs, after purchasing some of its projects from Peabody Energy; and Gateway Mining has negotiated a provisional agreement to ac- quire two large, adjacent coking coal projects - Wilton and Fairhill. Among the other coal developments are: Approval for Yancoal-Rio deal Yancoal has secured Foreign Investment Re- view Board approval for its proposed A$3.2 billion acquisition of Coal & Allied Industries, Rio Tinto's Hunter Valley coal division. Coal & Allied owns majority stakes in the Hunter Val- ley, Mount Thorley and Warkworth coal mines. The proposed deal between involves a $US1.95 billion upfront payment and the potential for a further $US500 million over a five-year period. Rio Tinto will also potentially be entitled to royalties once the deal is com- pleted. The transaction, which is expected to close in the September quarter, will see Yancoal's Australian coal portfolio expand to seven sites across Queensland and NSW. BMA to build overland conveyor The BHP Billiton Mitsubishi Alliance (BMA) has approved a A$270.1 million investment in the Caval Ridge Southern Circuit (CRSC) capital growth project in the Bowen Basin. CRSC is an 11km overland conveyor system which will transport coal from Peak Downs mine to the coal handling preparation plant near Caval Ridge mine. BHP said the project would create up to 400 new construction jobs and about 200 ongo- ing operational roles. It would also result in the Caval Ridge preparation plant increasing an- nual throughput capacity to 10 million tonnes. BHP Billiton operations president, minerals Australia, Mike Henry said, "The investment flowing from the project will help support the local community and state economy after what has been a difficult time in the region." Construction is scheduled to commence in mid-2017 and take 18 months to complete. The project will also mean a new stockpile pad and run-of-mine station at Peak Downs, and upgrades to the coal handling preparation plant and stockyard at Caval Ridge. BMA will also invest in new mining fleet, including exca- vators, and trucks. TerraCom to restart Blair Athol TerraCom has secured A$13.5 million in fund- ing to facilitate the transfer of the Blair Athol mining lease in Queensland. The funding, secured through subsidiary Orion Mining, will also allow for the start of mining and rehabilita- tion activities at the coal mine. In 2016 TerraCom signed a binding sales and purchase agreement with Rio Tinto to acquire Blair Athol for A$1. Under the agree- ment, TerraCom will receive A$80 million from Rio to meet rehabilitation costs at the site. TerraCom will start more than 50 hectares of rehabilitation while bringing the mine back into production, with the project expected to deliver 2 million tonnes a year over the first seven years of operation. Operations are likely to restart during the current quarter. Glencore Collinsville ramp-up Increased demand has led Glencore to ramp up operations at the historic Collinsville mine in the Bowen Basin. The company scaled back Australian coal miners buoyed by prices Glencore's Mount Owen operations in the Hunter Valley of NSW.