Coal giant soars on thermal production

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 26 Jul 2012   Posted by admin


THE coal division of global diversified mining group Xstrata is the world’s largest seaborne exporter of high energy thermal coal, used to generate electricity, and a significant producer of coal that is used to make steel.
Xstrata Coal has interests in more than 30 operating coal mines in Australia, South Africa and Colombia, and development projects in Canada.
In 2011, the company produced about 100.5 million tonnes of managed coal, of which about 85 per cent was exported: making it Australia’s leading exporter of thermal coal.
With a range of expansions and project developments under way, the company is set to continue increasing its production rate in the near future.
Newlands mine
The Newlands mine, in the northern part of Queensland’s Bowen Basin, is part of the NCA project: a mining, processing and exporting partnership between Xstrata Coal (55 per cent), Itochu Coal Resources (35 per cent) and Sumitomo (10 per cent). The NCA project comprises the Newlands open cut and underground longwall operations, the Collinsville open cut mine and the Abbot Point coal terminal (which is owned by the Ports Corporation of Queensland).
Development of the Newlands mine began in 1981; open cut mining began in 1983, followed by underground mining in 1998. Mining at Newlands is currently focussed on the Eastern Creek, Suttor Creek, Wollombi No 1 and Wollombi No 2 areas.
Xstrata Coal has applied to expand its Wollombi operations from the current production rate of 1.5 million tonnes per annum to between 2.5mtpa and 3mtpa, to ensure continued access to a quality resource in the next 15 years.
An environmental impact study (EIS) has been prepared and approved by the Queensland Environmental Protection Authority and the Commonwealth Department of Environment and Heritage.
To facilitate the Newlands Coal Extension project, Xstrata Coal and its partners have also submitted applications for three additional mining leases (ML 10352, ML10361 and ML10362) covering 11,792 hectares to extend the life of the
Newlands mine.
Mining of the additional leases would comprise both open cut and underground operations, and would extend the Eastern Creek and Northern Underground areas. According to the Queensland Government’s Environmental Management website, the open cut mining activities would commence in 2016, with a proposed mine life of 22 years, and would produce up to 5mtpa of run of mine (ROM) coal. The open cut operations would be carried out using existing draglines and large-scale truck and shovel equipment.
The underground mining would involve an extension of existing longwall activities at the Northern Underground mine and would start in 2013, with a proposed mine life of 13 years, to produce up to 6mtpa of ROM coal.
All coal mined from the project would be hauled by truck or transferred by conveyor for processing at the existing coal handling and preparation plant (CHPP) in the current Newlands main deposit area.
The final terms of reference outlining the requirements of the EIS for the Newlands Coal Extension project were issued on January 27.
Wandoan project
The Wandoan project is a proposed open cut thermal coal mine west of Wandoan township in Queensland’s Surat Basin. It is owned by a joint venture between Xstrata Coal Queensland (75 per cent), ICRA (Itochu) (12.5 per cent) and Sumisho Coal Australia (12.5 per cent). With an expected mine life of more than 30 years, the project will produce about 30mtpa of ROM thermal coal for worldwide export or sale to the domestic market.
The mining lease application area covers 32,000ha. In addition to the mine, the project will include a CHPP and support facilities. It will take between two and three years to construct, from a date to be decided once all approvals have been received.
The project received environmental approval from the Queensland Government in November 2010. “Xstrata Coal has acted openly and honestly throughout each stage of the mining lease application process in accordance with all legislative requirements,” Xstrata
Coal Queensland chief operating officer Reinhold Schmidt said in a statement following the Queensland Land Court’s recommendation that the Queensland Government approve the project applications.
“Today’s recommendation recognises our ongoing commitment to environmental management and our willingness to listen to and accommodate individual landholder needs.”
In March 2011, Xstrata Coal received conditional environmental approval from the Federal Government. This approval followed consideration of the project’s EIS and a supplementary EIS, and the Queensland Coordinator-General’s report for the Wandoan coal project by the Commonwealth Department of Sustainability, Environment, Water, Population and Communities.
As of June 2012, Xstrata Coal was awaiting completion of the final Queensland Government approval process required to proceed with development of the proposed mine.
“After the mining lease and environmental authority are granted by the Queensland Government, wewill move towards a final investment decision. In the meantime, we will continue planning for construction of the mine and supporting infrastructure,” the company stated.
As part of the ongoing feasibility process for the project, Xstrata Coal and its partners are investigating options for the project’s development, including the potential to introduce an additional partner into the project should it represent value for shareholders and the best outcome for all stakeholders.
“It will provide significant opportunities for the surrounding communities and Queensland economy, including the creation of 1400 jobs during construction and a further 900 long-term jobs once operational,” Mr Schmidt said.
“The project…would help establish the Surat Basin as an internationallycompetitive coal export region.”
Ravensworth operations
The Ravensworth operations comprise two open pit mines (Narama and Ravensworth West) wholly-owned and operated by Xstrata Coal.
Mining at Narama started in 1993 to allow for continued thermal coal supply to Macquarie Generation (previously known as the Electricity Commission of NSW). To extend supply, thermal coal production from the Ravensworth West mine began in tandem with Narama in 2006.
The operations can now produce as much as 6.1mtpa of ROM coal: processing up to 3.9mtpa from Ravensworth West and up to 3.5mtpa from Narama. The coal produced is used for domestic power generation at Macquarie Generation’s Bayswater and Liddell power stations, however Xstrata Coal has indicated that it will seek opportunities to expand the operation into the export market in the near future.
In December 2010, Xstrata Coal approved the development of the Ravensworth North open cut mine, 90 per cent owned by Cumnock No 1 Colliery (Xstrata Coal) and 10 per cent owned by ICRA Cumnock
(Itochu). The development requires a total investment of US$1.4 billion, to produce 8mtpa of export thermal and semi-soft coking coal at full production, during a mine life of about 26 years.
“Ravensworth North will play a significant role in the continued growth of our New South Wales operations. The mine will be the culmination of Xstrata Coal’s long-term strategy for the area and combines its suite of mineral tenements and assets to realise the considerable synergies on offer from existing operations,”
Xstrata Coal chief executive Peter Freyberg said in a statement in 2010. “Xstrata Coal’s continued investment in the expansion of our existing mines demonstrates our commitment to the growth of New South Wales’ export industry and our contribution as a significant employer within the communities in which we operate.”
Construction began in the second quarter of 2011, and was 6 per cent complete by the end of the year. Production is expected to start in the second half of 2012, with some construction work continuing through 2013.
Ulan operations
Ulan Coal Mines Ltd (UCML) is one of the longest established coal mining operations in NSW. It comprises two approved underground mining operations (the existing Ulan No 3 mine and Ulan West, which is under construction) and an open cut coal reserve, as well as the Ulan Coal Mine Continued Operations project which is moving through the approval process.
The Ulan mine complex, comprising all associated mining and land management activities within UCML land, covers about 17,959ha.
According to Xstrata’s Ulan Coal website, “to assist in maintaining coal production across the group, UCML is proposing to recommence and extend the open cut, as well as concurrently mining the approved Ulan No 3 underground and the approved Ulan West area”.
The operation’s 21-year conceptual mine plan involves open cut and longwall mining in the Ulan Seam for a combined production rate of up to 20mtpa of product coal. Xstrata Coal intends to undertake open cut mining for between seven and 11 years, while underground mining will continue for the life of the mine.
In March this year, the NSW Land and Environment Court ruled against imposing any greenhouse gas offset conditions on Ulan Coal’s project approval for the Ulan Coal Mine Continued Operations project.
Xstrata Coal can now proceed with the project, which will create 270 direct jobs during construction and 300 new positions during operation, through a capital investment of more than $1 billion.
Training facility
Xstrata Coal has turned the Baal Bone underground mine, near Lithgow in NSW, into a first-of-its-kind, hands-on training facility. The underground/open-cut mine was established in 1983 at the site of an open cut mine that had been abandoned in 1952. When Xstrata Coal acquired the operation in 2002, the land was in a degraded condition. Production from the mine slowed from the early 2000s and in 2012 Xstrata Coal re-purposed the mine into a facility that now provides workers with the opportunity to spend 12 weeks developing skills and becoming familiar with equipment in a ‘real-world’ environment, in addition to undertaking traditional classroom tutorials.
The first group of 12 trainees graduated in April 2012, and is now working at Ulan West.
“The feedback we’ve received from [the trainees] is that the Baal Bone training facility enabled them to have a better understanding and knowledge before going into production,” Xstrata Coal Baal Bone health, safety and training manager Mark Bulkeley said.
“The program is an industry first and what’s great is that it provides an opportunity for people without any industry experience to learn and practice vital skills that will help them gain employment with us at a time of considerable growth.”


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