Bengalla mine drives record earnings for New Hope
The Bengalla coal mine in NSW is geared up for a strong 2025 after a lift in coal production last year and key milestones for its Bengalla Growth Project being met ahead of schedule.
The Bengalla Mining Company produced saleable coal production of 8mt during FY24, which represents an 11% increase from the prior year.
Despite minor disruptions caused by rail cancellations and adverse weather conditions late in FY24, the company continued to achieve productivity gains, with elevated inventory levels and higher overburden removal in the latter months of the year providing a solid production runway to the start of FY25, with coal sales for the first quarter 21% higher than the previous quarter.
Bengalla achieved the primary goals of the Bengalla Growth Project ahead of schedule in FY24, including increased run of mine coal production capacity to a 13.4mtpa run rate on a 100% basis and increased washery throughput following the tailings capacity upgrade.
The Bengalla mining company is majority owned by New Hope Group (ASX: NHC) which also operates the New Acland coal mine in Queensland’s Surat Basin.
Strong results at Bengalla coal and the restart of production at New Acland Mine saw a total of 9.1mt of saleable coal production during FY24, a 26% increase on the previous year.
The increase represents the dedicated and consistent execution of New Hope Group’s targeted organic growth plans and illustrates the potential for increased production in future financial years.
Speaking exclusively to the Australian Mining Review, New Hope Group chief executive Rob Bishop believes the demand for thermal coal will remain strong for the company in part due to an underinvestment in new projects but also due an increased appetite in regions such as Asia.
“New Hope Group is confident the demand for thermal coal will be sustained even as the world transitions its energy mix,” he said.
“As governments around the world aim to decarbonise, we believe the demand outlook for high-energy thermal coal produced from low-cost Australian operations will remain consistent.
“While the current demand in existing markets in North Asia looks set to persist, we expect longer-term demand will be supported by markets in Southern Asia, as populations and energy demand electricity use per capita grow and develop.
“This demand outlook, coupled with a supply shortfall due to chronic underinvestment in new projects and the ageing of existing thermal coal assets, is expected to result in thermal coal pricing remaining above historical averages over the medium to long term.
“This indicates a positive outlook to continue responsibly operating our low-cost, high-quality assets and therefore continuing to provide our customers with a reliable source of energy.”
Operation
The Bengalla coal mine is an open cut operation located about four kilometres south-west of Muswellbrook, in NSW’s famous Hunter Valley region.
Bengalla produces high calorific-value energy coal from the Sydney Basin and mines the Whittingham Coal Measures of the Hunter Coalfields.
It operates continuously, 24 hours a day, seven days a week, producing up to 15mt of run-of-mine (ROM) coal annually, with approval to continue this output until 2039.
After the washing and sorting process, coal is loaded onto trains and transported to the Port of Newcastle where it is shipped to customers across Asia including Japan, Korea, Taiwan, China and India as well as some domestic customers.
In 2022, the Bengalla Growth Project kicked off with the goal to increase production capacity from 12.5mt to 13.4mt ROM coal per year, which it achieved in FY24.
Costing $400m, the project included purchasing additional plant and machinery, including seven new Hitachi EH5000 trucks, a Liebherr R9800 excavator, a Cat MD6250 drill, additional dozers, a grader and a watercart.
The coal handling and preparation plant (CHPP) was upgraded to both increase throughput and lift product quality in line with demand for higher quality coal from customers.
In the longer-term, upgrades to the raw coal reclaim circuit will be introduced to keep up with the upgraded plant.
The growth project also required additional people onsite for construction and ongoing operations, as well as a reconfiguration of the infrastructure area as the pit shell progresses through the existing facilities.
With the expectation of long-term personnel increase and pit progression, infrastructure has been expanded at the facility to including additional carparking, administration and bathhouse buildings, as well as warehousing and maintenance facilities.
The site has been operational since 1999 and boasts more than 600 permanent employees, most of whom reside in local areas such as Muswellbrook, the Upper Hunter and Singleton Shires.
New Hope Group acquired 40% of Bengalla 2016, before acquiring an 80% controlling interest in 2018. The remaining 20% is owned by Taiwan based Taipower.
Bengalla employee accolade
In February 2024, Bengalla employee Sara Spokes was named as a NSW Women in Mining Awards finalist in the Exceptional Tradeswoman/Operator/Technician category.
The NSW Women in Mining Awards recognise and celebrate the contributions and achievements of women and gender diversity champions across the state’s resources sector.
Sara’s journey in the mining industry began with a high school mine tour, which sparked a fascination with the sector’s scale and machinery.
She completed a Certificate III in Surface Extraction through a traineeship with industry leader Workpac, winning the ‘Trainee of the Year Award for Mining’ as well as a high commendation in the NSW Training Awards Hunter Region.
Her comprehensive skill set was gained during her five years in mining, when she became proficient working with a range of heavy machinery and became a crucial member of the Bengalla Mines Rescue Team, which she captained to victory in the 2023 Hunter Valley Mines Rescue competition.
Sara also initiated a support group for female operators, fostering a collaborative environment for women to grow professionally.
Her dedication to continuous learning remains on pace as she progresses towards an open cut examiner role at the site.
She also has a strong commitment to community involvement, which is evident in her active participation in local sports and as a trooper in the 12/16 Hunter River Lancers.
Future forecasts
In 2024, New Hope reported its third highest earnings, with a net profit after tax of $475.9m and underlying earnings before interest, taxes, depreciation, and amortisation of $859.9m, supported by robust thermal coal prices and strong operational performance at Bengalla and New Acland Mines.
Speaking to shareholders at the company’s AGM in Muswellbrook in November, chairman Robert Millner AO elaborated on New Hope’s financial position and future forecasts.
“Following the successful issue of $300m senior unsecured convertible notes, the company ended the financial year with available cash of $824.5m,” he said.
“The backdrop of this result is a robust thermal coal price environment, with pricing remaining well above historical long-term averages after retreating from record highs in recent years.
“This enabled our quality assets to generate outsized returns. Alongside strong pricing, a consistent operational performance at Bengalla Mine and the restart of operations at New Acland Mine resulted in increased coal production providing greater energy security to our customers and the regions they service.
“We believe the company will continue to deliver value to shareholders because its low-cost, high-quality operations, and low-risk organic growth pipeline, position it well to take advantage of the positive outlook for the thermal coal sector.
“Bengalla Mine had another year of consistent operational performance and began to realise productivity benefits from the 13.4mtpa Growth Project and…the team is continuing its proud history of making a positive contribution to the Upper Hunter, and I was pleased to see that impact and those connections, alongside some of my fellow Directors, at the recent Bengalla Community Open Day.”
