SWIMMING against the current of Queensland’s weakened coal industry, BHP Billiton Mitsubishi Alliance (BMA) celebrated a significant success story when its $1.5 billion, 4.5 million tonne per annum Daunia mine was official opened in September.
Daunia, 150km southwest of Mackay, was approved for development in 2011; it began operating in March 2013 and celebrated its official opening in September — ahead of schedule and $250 million under budget. Construction took about 4.3 million man hours and was achieved without any lost time injuries, according to BMA.
Importantly, the open cut mine would be capital and cost efficient, with BMA planning to use existing rail and port infrastructure. A low stripping volume would also contribute to its cost competitiveness.
BMA’s 5.5mtpa Caval Ridge mine was 86 per cent complete at the end of the September quarter and is expected to come online early next year. Furthermore, the potential for expansion at Daunia – which already boasts a 30-year mine life – provided an opportunity for BMA to further improve its economies of scale.
“The continued ramp up of this mine and the future commissioning of Caval Ridge will underpin an expected increase in the capacity of our Queensland coal business to 66mtpa by the end of the 2014 year,” BMA said in statement.
BMA was inundated with more than 30,000 applications for the 900 jobs between Daunia and Caval Ridge, forcing the company to set up assessment centres in Brisbane and Cairns to review short-listed candidates. By the end of June, Daunia had confirmed its 450-strong fly in, fly out workforce, which will be housed in modern village accommodation at Coppabella; 18km from the mine.
On 4 September, Daunia officially became BMA’s ninth operating metallurgical coal mine in Queensland. BHP Billiton coal president Dean Dalla Valle was joined by joint venture partner Mitsubishi Corporation and Queensland government officials at the opening ceremony.
“It’s not often, even in a long career in mining, that the opportunity arises to open a new mine, and I am privileged to be doing that today amongst our proud coal miners,” Mr Dalla Valle said.
“Daunia mine was completed and producing coal four months ahead of schedule. Large coal mines are complex projects, and this is a fantastic achievement for our team.
“In recent years, through the BHP Billiton Mitsubishi Alliance we have made significant capital investments to expand our operations here in Queensland, where we mine the world’s premium quality metallurgical coal.
“In addition to the US$1.4 billion invested to construct the 4.5mtpa Daunia mine, BMA has committed US$7.7 billion for major projects in Queensland over the past three years.
“This includes the new Caval Ridge mine and the expansion of the Hay Point Coal Terminal currently underway, as well as the Broadmeadow mine extension completed this year.
“In a strong partnership with Mitsubishi, we are the state’s largest coal miner, operating seven BMA metallurgical coal mines in central Queensland, along with the Hay Point Coal Terminal near Mackay.”
Mr Dalla Valle said it would be critical to drive productivity measures across its business to remain competitive as the Daunia mine ramped up production and BMA continued to deliver its other growth projects.
“We will continue to work in partnership with governments, industry, our people and our communities to achieve that,” he said. Mitsubishi Corporation stated that its commitment to Daunia and the Queensland coal industry was consistent with its “new strategic direction”. Mitsubishi’s corporate strategy, released in May, aimed to double attributed production in its metallurgical coal business by 2020 through a focus on increasing productivity and expanding volumes at its existing mines. Mitsubishi also aimed to further enlarge BMA assets in response to an expected increase in global metallurgical coal demand in the medium to long term.
Queensland Premier Campbell
Newman was joined by Natural Resources and Mines minister Andrew Cripps at the ceremony, and welcomed the venture and its expected benefits to the state. “The resources industry is one of the four pillars of the economy and with good reason, when you consider the impact this investment will have in Queensland,” Mr Newman said.
“This one mine has already created 900 jobs and boosted the economy by $1.4 billion through the construction alone. “Another 450 jobs will now support the ongoing operation of the mine, adding further benefits to the economy.
“Those benefits will be felt across the state, as well as locally through a boost to the businesses in the region.”
Mr Cripps said Daunia was a “vote of confidence” in Queensland and outlined a government plan to improve business conditions.
Mr Dalla Valle said BHP and Mitsubishi had committed $9.1 billion for major projects in Queensland in the past three years.
Queensland Resources Council (QRC) chief executive Michael Roche said the Daunia open cut coking coal mine in the Bowen Basin had “already set a host of new benchmarks as a model 21st century mining operation”.
Speaking at the official opening, Mr Roche stated that Daunia had set new standards from the very beginning, with strong commitments to safety and workforce diversity.
“Almost half the 450 people working at Daunia were recruited from the Cairns and Brisbane regions with an emphasis on attracting women and indigenous people to the coal industry,” he said.
“As a result, 27 per cent of the Daunia workforce is female and 5 per cent indigenous – a remarkable achievement and a credit to BHP Billiton and their joint venture partners Mitsubishi Development.”
Mr Roche also said state-of-the-art design and environmental monitoring systems were built into the development, and a conservation area and a fish migration program had been established for the nearby New Chum Creek to ensure the natural migration patterns of small fresh water fish were not compromised.
“The coal industry is working through the toughest market conditions in a decade but there is no denying long-term demand for Queensland’s high quality coals will continue as Asia continues its economic development journey,’ Mr Roche said.
“Queensland is fortunate in having an industry with the foresight to invest in the state’s long-term prosperity and, with the Daunia model, an industry prepared to go out of its way to share the benefits with people from around the state.”