Breathing new life into Narrabri

Things are moving along for Whitehaven Coal’s (ASX: WHC) Narrabri Stage 3 extension project. 

The Federal Government recently approved the project, which proposes to extract coal to the south of the existing mine, subject to conditions, in accordance with the Environment Protection and Biodiversity Conservation Act (Cth).

This approval extends the life of the mine from 2031 to 2044 and converts Narrabri’s adjacent exploration licence into a mining lease.

Coal will be mined using the underground longwall mining method already successfully and safely used at the mine.

Existing portals, coal handling and preparation plant (CHPP), rail loop, box cut, offices and associated infrastructure will be used to further extract, process and export high-energy thermal coal products.

Key benefits of mine extension

Narrabri is the company’s only under- ground operation and has been running since 2012.

The site is 17km southeast of Narrabri and 70km northwest of Gunnedah and employs over 500 staff to produce around 11mt of high-quality thermal coal each year.

Hundreds of locals and surrounding businesses will benefit from the newly extended mine life.

The company expects $599m in added net economic benefit to the State, in addition to the existing mine, along with $317m in direct local wages and $247m in local supplier expenditure, both until 2044.

Timelines to date

The Narrabri Stage 3 extension project itself commenced in 2021.

After more than a year of review, in January 2022 the NSW Department of Planning, Industry and Environment (DPIE) recommended that the Stage 3 Extension Project was in the public interest and approvable subject to conditions.

On 1 April 2022, the Project was approved by the NSW Independent Planning Commission (IPC).

On 24 September 2024, the Project was approved by the Federal Government, subject to conditions, in accordance with the Environment Protection and Biodiversity Conservation Act (Cth).

“Significant delays to this approval arising from unnecessarily protracted State and Federal Government assessment processes have in this case been exacerbated by indulging Green claims through the administrative and legal systems,” Whitehaven Coal said in a statement on 25 September.”

“This undermines Australia’s status as a destination for foreign investment – which for the Narrabri Mine includes Japanese, Korean and Chinese Joint Venture partners – and curtails the economic contribution of our resources sector, which has under- pinned Australia’s prosperity for decades.”

“The EIS for Narrabri Stage 3 was lodged in October 2020 and the Project is expected to extend the life of the mine from 2031 to 2044, support around 500 continuing jobs in regional NSW, and entail a significant economic benefit to the State.”

Strategic operations

With the recent Federal Government approval, Whitehaven Coal is progressing with the Narrabri Stage 3 project according to its mine plan.

The company’s long-term growth plans include the project’s delivery. It says the Narrabri mine is expected to reach the end of their mine lives before 2050, as will the Vickery extension project, with Narrabri’s reserve life ending in 2044.

In its latest annual report, Whitehaven Coal managing director and chief executive Paul Flynn comments on the medium-term outlook for the company’s NSW operations.

“We expect between 35-39.5mt of managed ROM production in FY25 and 28 to 31.5mt of managed coal sales,” he said.

“We expect unit costs to be in the range of $140-$155 per tonne and we are aiming to lower these costs over time, including through a $100m cost reduction program in Queensland, and higher volumes in both Queensland and NSW.”

Whitehaven Coal operates six mines – five open cut and one underground in the Gunnedah Basin of NSW and the Bowen Basin of Queensland.

Its operating assets include two high- quality, near-term and large-scale development assets at Vickery near Gunnedah and Winchester South near Moranbah.

In April this year, Whitehaven acquired both the Blackwater and Daunia mines from BHP (ASX: BHP) and Mitsubishi Development (MDP).