WHEN Yancoal Australia made its $1.5 billion debut on the ASX on June 28, it was the largest public listing the local market had experienced in more than
Around the same time, the company completed a merger with Gloucester Coal that set it firmly in place as Australia’s most significant pure-play coal producer.
Yancoal’s parent company Yanzhou Coal – China’s fourth-largest coal miner – controls 78 per cent of Yancoal Australia. Singapore-based commodities
giant Noble holds 13 per cent through its former Gloucester holding, while Gloucester’s remaining shareholders hold the other 9 per cent.
Today, Yancoal Australia operates 11 mines in NSW and Queensland – with resources and reserves totalling 3.5 billion tonnes and 697 million tonnes
respectively – and has investments in two coal export terminals: Wiggins Island in Gladstone, Queensland and Newcastle Coal Infrastructure Group on
Kooragang Island, NSW.
Mining operations Ashton
The Ashton coal mines are in the Upper Hunter Valley region, about 14km northwest of Singleton and 90km from the Port of Newcastle. They are operated as an unincorporated joint venture between Yancoal Australia (as operator, with 90 per cent) and Itochu Corporation of Japan (10 per cent).
Ashton comprises both underground and open-cut mines, a coal handling and preparation plant (CHPP) and a rail siding. It is currently operating at
a capacity of more than 3 million tonnes per annum of high-quality semi-soft coking coal, which is sold to a number of Asian-based steel mills.
Open-cut mining began at Ashton in early 2004, following a development consent granted by the NSW Planning minister in October 2002. Underground
development started in late 2005 and the operation’s first longwall product was delivered in early 2007.
Ashton lies next to the area’s main northern railway, and product from the operation is railed to Newcastle, where Ashton has an allocation of 3mtpa through Port Waratah Coal Services (PWCS). When the PWCS T4 expansion is completed, Ashton’s port allocation will increase to 3.6mtpa.
Yancoal Australia has reported that, with mining in Ashton’s North East open cut nearing completion, the new South East open cut (SEOC) was being
developed as a replacement source of coal.
“The life of the SEOC is about seven years,” the company’s website stated.
“Opportunities may exist for additional open cut mining after the completion of the SEOC, subject to further exploration and feasibility studies.”
Yancoal Australia also reported that underground mining at Ashton was moving from the Pikes Gully seam into the deeper Upper Liddell seam, with
production expected to reach 3.5mtpa of run of mine (ROM) coal by about 2015, continuing at that rate for a number of years.
The company stated that there was also an opportunity to further explore the tenements surrounding the existing Ashton mines.
“The geology of the tenements around the mine is well understood, however, further drilling should lead to an upgrade of the resources to reserves over the next few years,” it stated.
Yancoal Australia purchased the Austar coal mine in December 2004, changing the mine’s name from Southland to Austar in the process. Following its
acquisition, the company re-started commercial mining operations in 2006 as part of a $250 million capital investment program designed to ensure the mine’s long-term viability and safety, while also providing local economic benefits.
Austar is a deep underground longwall mine that produces premium coking coal for international customers.
The mine lies just 8km southwest of Cessnock in the Newcastle Coalfields and employs more than 330 people.
Austar’s coal is characterised as the highest fluidity, lowest ash coking coal in Australia, with a low phosphorous and alkali content. The coal is shipped
through the Port of Newcastle international steelmakers and general industries across the world, and it has become an integral part of many producers’ coke blends as a result of its fluidity.
In September 2006, Yancoal Australia chose to introduce a new technology known as longwall top coal caving (LTCC) to Austar. The company
reported that the technology, ideal for use in mining thick coal seams such as Austar’s Greta seam, would enable greatly increased resource recovery volumes.
“By using the LTCC mining method, a further 80 per cent of the additional coal in the seam can be accessed and recovered, significantly improving the
total recovery of the in-ground coal resource and overall mine economics,” Yancoal Australia stated.
The company also reported that a large tenement area near the current Austar mine workings and infrastructure remained relatively unexplored, but was believed to contain potentially significant additional resources and could be a target for future exploration.
The world-class Moolarben coal mine sits within the Western Coalfields of NSW near the village of Ulan, about 45km northeast of Mudgee and 25km east of Gulgong.
The project covers an area of about 110 square kilometres and adjoins Mitsubishi and Xstrata’s Ulan mine to the northwest and Peabody’s Wilpinjong mine in the east.
Moolarben comprises an existing open-cut mine that produces export-quality thermal coal for Asian customers, an underground thermal coal development project and a 13.5mtpa-capacity CHPP. The mine’s open-cut and underground resources and reserves are estimated to total 1.2bt and 315mt, respectively.
Yancoal Australia reported that it was assessing options to increase the capacity of the CHPP to coincide with the start of underground mining at Moolarben.
“Longwall mining is scheduled to commence in UG1 [underground area 1] in 2016 to coincide with the opening of Port Waratah Coal Services T4 port
expansion,” the company stated. “Moolarben has an established rail loop and loading facilities…[and] existing port capacity of 0.6mt through PWCS and 4.6mt through Newcastle
Coal Infrastructure Group, which will increase to 8.3mt as the port reaches its full capacity of 66mtpa.
“Yancoal has also submitted an application for a further 3.5mtpa from the PWCS T4 development, which will increase total allocation across the two ports to over 12mtpa.
“At full production…Moolarben…will have the capacity to produce 17mtpa of ROM coal and employ approximately 450 personnel.”
The Yarrabee coal mine became a Yancoal Australia asset following the company’s acquisition of Felix Resources in December 2009.
Yarrabee is an open-cut mine about 40km northeast of Blackwater in the Bowen Basin and 280km northwest of the Port of Gladstone. The mine produces
low-volatile, high-energy pulverised coal injection (PCI) coal and thermal coal that is exported to steelmakers, power generators and general industries in
Asia, Europe and the Americas.
Product from Yarrabee is hauled about 37km by road to the Boonal load out facility on the Blackwater system and then railed to the RG Tanna and Barney Point coal terminals in Gladstone for export.
Production at Yarrabee grew from 1.5mtpa in 2005 to more than 2.5mtpa in 2011. Yancoal Australia reported that it expected output to increase further,
to about 3.2mtpa, following completion of the Wiggins Island Coal Export Terminal (WICET) facilities.
The company also reported that studies were underway to determine the potential for additional production increases at Yarrabee.
“The large tenement position is not completely explored and has potential for the discovery of additional resources,” Yancoal Australia stated.
The Cameby Downs open-cut coal mine is about 360km northwest of Brisbane. It lies on the Warrego Highway, about 16km northeast of Miles and 30km
northwest of Chinchilla in the Surat Basin, and is connected by rail to the Port of Brisbane.
The Cameby Downs CHPP and associated infrastructure was completed during the second half of 2010. The mine produces export-quality, low-ash thermal coal and has port allocation through the Queensland Bulk Handling facility in Brisbane.
Following the purchase of Syntech Resources by Yancoal Australia in August 2011, the latter’s major shareholder – Yanzhou Coal – took 100 per cent-ownership of Cameby Downs plus several surrounding and regional tenements. Yancoal Australia reported that the tenement portfolio had the potential to contain at least a further 1bt of coal.
Gloucester merger portfolio
The Middlemount open-cut mine is held in a JV between Peabody Energy and Gloucester Coal: Yancoal Australia holds a near-50 per cent interest following its merger with Gloucester.
Full-scale operations at the mine, which lies in the Bowen Basin, began in November 2011. Since then, Yancoal Australia reported that its production of high-quality, low-phosphorus coking coal and low-volatile PCI was expected to ramp up to about 3.8mtpa of saleable product (on a 100 per cent basis).
Middlemount has 96mt of reserves and 123mt of resources (on a 100 per cent basis). It has contracted rail and port capacity through Dalrymple Bay Coal Terminal and Abbot Point Port.
The Donaldson open cut mine is about 25km from the Port of Newcastle, on a mining lease contained within both Maitland and Cessnock Council areas.
Coal is extracted by conventional truck and shovel haul back methods whereby soil, overburden and coal are removed and the mine area is progressively
backfilled and rehabilitated.
Particular attention is paid during mining to minimising coal losses and out-of-seam dilution in order to maximise the quality of the end product. Raw coal from Donaldson is transported 1.5km by truck on internal roadways to the washing and loading facilities at Bloomfield Colliery, where it is washed under contract to export specification before being transported by rail to the Port of Newcastle for export.
The portal of the Abel underground mine comes off the highwall of the Donaldson open-cut mine. Abel is a bord and pillar operation that uses continuous
miners for first workings and secondary extraction in a two-stage process that accommodates irregular-shaped coal deposits. The method enables adjustment to extraction for better management of subsidence and maximises the efficiency of the operation.
Following extraction, coal is transported via conveyor through the highwall to the surface infrastructure area of the Donaldson mine. It is then transported to Bloomfield, where it is processed and loaded for transport by rail to the Port of Newcastle.
The Tasman underground mine is south of Maitland, about 20km from the Port of Newcastle. Tasman is a bord and pillar operation and, following extraction, the mine’s raw coal is brought to the surface and transported 16km by truck to Bloomfield. There it is washed under contract to export steam coal
specifications before being transported by rail to the Port of Newcastle for export.
Open-cut mining began at Stratford, 95km north of Newcastle, in June 1995: targeting coal from the Gloucester Basin’s upper and middle seams. ROM
coal from operation is processed at the centralised Stratford CHPP, where it is blended to produce the Gloucester Basin Coal suite of products.
Duralie is in the southern part of the Gloucester Basin, 20km south of the Stratford operation. The deposit targeted by the Duralie mining operation consists of two seams: Weismantel and Clareval.
Leighton Mining operates the mine under contract to Gloucester Coal and open-cut mining began in March 2003, producing a high-fluidity coking coal. To optimise product recovery and improve project economics, Duralie’s coal is blended with other raw coal and washed to produce low-ash coking coal and a higher-ash thermal coal. ROM coal is transported to Stratford for washing before being railed to the Port of Newcastle for export and shipping to domestic customers.