Black Coal

Content maintained by Ron Sait

• Black Coal
• Resources
• Accessible EDR
• JORC Reserves
• Exploration
• Production
• World Ranking
• Industry Developments - Overview

Coal is a fossil fuel of sedimentary origin that has formed by coalification of vegetation over millions of years. Black coal consists of the higher rank coals including anthracite, bituminous and sub-bituminous coals. In Australia, black coal deposits occur in all States and the Northern Territory and range in age from 140 to 225 million years old. Black coal is primarily used as a fuel to generate electricity and produces about 80% of Australia's electricity requirements. Black coal is used to produce coke also for the steel making process and by-products of coke-making include coal tar, ammonia, lights oils and coal gas. Other uses for black coal include cement manufacturing, food processing, paper manufacturing and alumina refineries.

Queensland (Qld) produces 54% and New South Wales (NSW) produces 43% of Australia's black coal while locally significant production occurs at Collie in Western Australia (WA), Leigh Creek in South Australia (SA) and in the Fingal Valley and at Kimbolton in Tasmania.

Recoverable economic demonstrated resources (EDR) in 2008 increased 0.8% to 39.2 gigatonne (Gt) due mainly to significant increases at Mt Arthur, Belvedere, Blackwater, Saraji and Wandoan. New resources were announced at Cherry Tree Hill and Washpool. Significant decreases occurred at Kevins Corner and Peak Downs. Queensland (56%) and New South Wales (40%) had the largest share of recoverable EDR in Australia. The Sydney Basin (35%) and Bowen Basin (34%) contain most of the recoverable EDR in Australia.

In 2008, the recoverable paramarginal demonstrated resources (PDR) decreased about 32% to 1.5 Gt, mainly as a result of reclassification of resources. The recoverable subeconomic demonstrated resources (SDR) remained constant at 6.7 Gt. The recoverable inferred resources increased 9.2% to 66.7 Gt. Large increases in inferred resources occurred at Warkworth, Alpha, Blackwater, Kevins Corner, North Alpha, South Alpha and Wandoan. Inferred resources were included for the first time at Oaklands North, Arcadia, Arcturus, Dingo West, Red Hill (Aquila) and Washpool. In the five years to December 2008 recoverable inferred resources have increased from 52.7 Gt to 66.7 Gt, or about 26%.

Nearly all black coal EDR is accessible with only a relatively small tonnage at Hill River (WA) being quarantined within State Reserves. The resource life of the accessible EDR of 39.1 Gt was about 90 years at current rates of production.

JORC reserves are 13.4 Gt or 34% of accessible EDR. Included in the 13.4 Gt are Geoscience Australia estimates of reserves at some operating mines that had no reported JORC reserves. This constituted 1.9 Gt or about 14% of JORC reserves. BHP Billiton, Rio Tinto and Xstrata Coal manage about 57% of JORC reserves in Australia. The resource life of the JORC reserves of 13.4 Gt is 31 years.

Data published by ABS on coal indicated that exploration expenditure for 2008 totalled $276.3 million which is an increase from $192.6 million in 2007. Expenditure in Qld was $161.7 million or 59% of the total and was $93.7 million in NSW or 34% of the total. Exploration also occurred in SA, WA, Tasmania and Victoria. In 2008, coal exploration expenditure contributed 10.6% to the total exploration expenditure in Australia.

In 2008, Australia produced 425 million tonnes (Mt) of raw coal (416 Mt in 2007) which yielded 328 Mt of saleable coal (322 Mt in 2007). Exports of black coal during 2008 were 134.8 Mt of coking coal valued at $32.1 billion and 126.3 Mt of thermal coal valued at $14.4 billion. The Australian Bureau of Agricultural and Resource Economics (ABARE) has projected that Australia's saleable production will grow to 404 Mt by 2014. Exports of coking and thermal coals are projected to increase to 162 Mt and 163 Mt respectively by 2014.

Australia has 6% of the world's recoverable black coal EDR and ranks sixth behind USA (31%), Russia (21%), China (13%), India (8%) and South Africa (7%).

Australia produced about 6% of the world's black coal in 2008 and ranked fourth after China (45%), USA (18%) and India (8%).

A number of projects were commissioned during 2008, including Lake Vermont (Lake Vermont Resources), Glendell (Xstrata), Abel (Donaldson Coal), Rocglen (Whitehaven Coal) and the Liddell expansion (Xstrata). The Stage 1 and Stage 2 expansions of the Dalrymple Bay Coal Terminal to 72 million tonnes per annum (Mtpa) were both completed in 2008. Projects under construction during 2008 included Kestrel (Rio Tinto), Clermont (Rio Tinto), Blakefield South (Xstrata), Mangoola (Xstrata), Moolarben (Felix Resources), NRE Wongawilli Colliery (Gujarat NRE Resources) and Narrabri Colliery (Whitehaven Coal). Construction of the Airly Colliery began in early 2009 (Centennial Coal). The Abbott Point, Brisbane and Kooragang Island coal terminal expansions were under construction during 2008 and construction commenced on the new 30 Mtpa coal terminal owned by the Newcastle Coal Infrastructure Group. There are more than 35 proposed new mines, expansions and extensions which are at stages of development ranging from scoping studies to marketing.

Industry Developments - Queensland

Rio Tinto Coal Australia: In 2008 construction commenced on the US$991 million Kestrel Mine Extension project. The 375 m wide longwall is planned to increase production from 4.0 to 5.7 Mtpa from 2012 over a 20 year mine life. The US$750 million Clermont project is under construction and production is due to commence in 2010. The open-cut mine will produce 12.2 Mtpa of thermal coal over a planned 17 year mine life. A 15 km conveyor will connect the mine to the current infrastructure at Blair Athol where production is expected to wind down by 2011.

BHP Billiton Mitsubishi Alliance (BMA Coal): Mining at the Crinum longwall mine ceased in late 2007. The roof supports were moved to the Crinum East punch longwall mine and operations commenced again in early 2008. After four years at Crinum East the roof supports will be relocated to Crinum North. The proposed 4.4 Mtpa Daunia open-cut truck and shovel mine near the Poitrel operation was expected to produce the first coal in 2010. The proposed 5.5 Mtpa Caval Ridge open-cut mine at the north end of the Peak Downs operation was expected to produce the first coal in 2011. The proposed 8 Mtpa Goonyella mine expansion from 16 to 24 Mtpa was expected to be producing coal in 2013. In July 2008, BMA Coal acquired the New Saraji project from the New Hope Corporation for US$2.4 billion.

Xstrata Coal: A pre-feasibility study of the Wandoan project was completed in late 2008. A large scale sample pit was developed in mid-2008. A feasibility study of a $1 billion 20 Mtpa open-cut thermal coal mine at Wandoan is expected to continue in 2009. A new rail connection will need to be constructed between Wandoan and the existing Moura-Gladstone rail line.

Anglo Coal: In February 2008 Anglo Coal paid $728 million for 70% of the Foxleigh mine, which is near Anglo's German Creek complex. Anglo Coal plans to increase production at Foxleigh from 2.5 to 4 Mtpa. The new coal washing plant for the Lake Lindsay mine was commissioned in March 2008. The new $210 million Moranbah North longwall is expected to be commissioned in 2009.

Macarthur Coal: The Olive Downs North box-cut is expected to commence in late 2009. Coal will be hauled to the Moorvale wash plant. A pre-feasibility study is being undertaken on the Moorvale underground bord and pillar mine which will use direct entry from the open-cut highwall. At the $70 million Middlemount Project mining is expected to commence in late 2009 at a production rate of 1.8 Mtpa.

Wesfarmers: A $130 million project at the Curragh mine will involve the diversion of Blackwater Creek to allow access to around 47 Mt of coal. The project is expected to be completed in late 2009. The company is undertaking a feasibility study into expanding the Curragh mine to 8 Mtpa of metallurgical coal.

Felix Resources: The completion of construction of a wash plant at the Yarrabee mine in mid-2009 will enable Felix to increase production from 1.7 to 2.8 Mtpa. The 2.5 Mtpa Minerva open-cut coal mine has 11 years of life remaining with the potential to develop an underground mine at the adjacent Athena area.

Peabody Pacific: Production at the Wilkie Creek mine increased from 2.1 to 2.8 Mtpa during 2008. Peabody is proposing to increase production at the Millenium open-cut mine from 1.4 Mtpa to up to 7 Mtpa. At Eaglefield, Peabody is proposing to increase production from the open-cut mine from 3.5 Mtpa to up to 12 Mtpa.

Ensham Resources: The $600 million Ensham Central project is planned to increase production capacity from 12 to 20 Mtpa. Open-cut mining will extend to the west of the current pit and an extra 8 Mtpa will come from development of an underground longwall operation to the west of the limit of the planned open-cut extension.

Vale: In 2009, a US$138 million longwall unit will be installed at the Carborough Downs mine to increase capacity to 4.9 Mtpa. A feasibility study on the Stage 1 A$892 million Eagle Downs 4 Mtpa single longwall is expected to be completed in mid-2009. A pre-feasibility study is underway into the Belvedere project which is planned to produce up to 9 Mtpa of hard coking coal from two longwalls by 2014. A feasibility study is being undertaken on the Ellensfield project which is a proposed 5.5 Mtpa longwall with a mine life of at least 20 years.

New Hope Corporation: The Jeebropilly mine recommenced in mid-2008 and is expected to have a capacity of 800 000 tonnes per annum (tpa) by late 2009. The $36 million expansion of New Acland open-cut is planned to increase production from 4.2 to 4.8 Mtpa in 2010.

Northern Energy Corporation: The $35 million Maryborough Project is planned to commence in late 2009. The 200 000 tpa Colton open-cut mine is expected to export coking coal using the Port of Bundaberg over an initial five year mine life. The $600 million Elimatta Project in the Surat Basin is planned to start in 2012 with an open-cut production of 4 Mtpa over an initial 20 year mine life.

Tarong Energy: Since January 2008 the Meandu open-cut mine has been operated by Tarong Energy. The new $500 million Kunioon mine is planned to replace the depleted Meandu mine in 2011. The proposed 7 Mtpa Kunioon open-cut mine will be connected to Tarong's two power stations by a 16 km conveyor.

Caledon Resources plc: By January 2008 the Cook Colliery had installed the new continuous bolter-miner equipment with a Magatar continuous haulage system. Caledon plans to increase production from 500 000 tpa to 1.1 Mtpa.

Lake Vermont Resources Pty Ltd: Open-cut mining at the $176 million 4 Mtpa Lake Vermont project commenced in 2008.

Waratah Coal: The $5.3 billion China First Project located 35 km north of Alpha in Central Qld is planned to produce 25 Mtpa of open-cut thermal coal from 2013. Infrastructure includes a 474 km rail line to the Abbot Point State Development Area.;

Hancock Prospecting: The $7.5 billion Alpha Project is planned to produce 40 Mtpa of open-cut thermal coal commencing in 2013. Hancock plans to build 500 km of railway and a new port at either Abbot Point or Dudgeon Point near Hay Point.

Cockatoo Coal: In December 2008 the company completed a $52.5 million acquisition of a 62.5% interest in the Baralaba coal mine from Peabody Pacific. Cockatoo plans to increase production from 300 000 tpa to 0.42 Mtpa. Cockatoo Coal is undertaking a pre-feasibility study on a 3 Mtpa open-cut thermal coal mine at the Woori deposit in the Surat Basin.

Syntech Resources Pty Ltd: Construction of the $250 million Cameby Downs open-cut mine is expected to commence in July 2009. Production of 1.4 Mtpa of thermal coal is planned to start in 2010 with exports through the Port of Brisbane.

Linc Energy: In April 2009 the demonstration gas-to-liquids plant at the Chinchilla Underground Coal Gasification project was officially opened.

Carbon Energy: The $20 million Underground Coal Gasification trial at Bloodwood Creek was completed in early 2009.

Cougar Energy: Plan to trial Underground Coal Gasification near Kingaroy during 2009. Cougar propose to build a $500 million 400 megawatt power station.

Industry Developments - New South Wales

BHP Billiton: At the Mt Arthur project an investigation is underway into the introduction of a $300 million underground punch longwall into the Woodlands Hill seam with a capacity of up to 8 Mtpa commencing in 2011. In January 2009 the NSW Department of Planning gave approval for the Dendrobium Colliery to extend the mine life to 2030.

Coal and Allied: (CA) (75% Rio Tinto): At the Bengalla mine CA is spending $25 million in 2009 to upgrade the coal handling and preparation plant. In 2008 CA completed a feasibility study on the $1.3 billion Mount Pleasant project near Muswellbrook. The 8 Mtpa open-cut thermal coal mine is expected to start in 2013.

Xstrata Coal: In February 2008 Xstrata paid US$903 million to acquire the Newpac No1 underground longwall mine from Resource Pacific Holdings Ltd. In March 2008 the $290 million Glendell mine commenced operations with a production capacity of 4.5 Mtpa. The Liddell expansion was completed in late 2008 with capacity increasing from 4.5 to 7 Mtpa. At Bulga production from the Beltana longwall is expected to be replaced by production from the $350 million Blakefield South longwall in 2010. The $1.1 billion Mangoola open-cut project commenced development in August 2008 and is expected to produce up to 10.5 Mtpa of thermal coal.

Anglo Coal: In February 2008 the NSW Government approved the $35 million extension to the Drayton open-cut mine which will increase production from 5.5 to 8 Mtpa and extend the mine life until 2017.

Centennial Coal: Construction of the $100 million Airly Colliery began in early 2009 with the first coal expected in 2010. This continuous miner operation will produce up to 1.8 Mtpa of thermal coal for both export and domestic use. At Angus Place, a new longwall commenced operation in July 2008. At the Charbon Colliery, Centennial is seeking development consent to mine the remaining reserves. At the Mandalong Colliery construction commenced in April 2009 on facilities which will allow exports of up to 1 Mtpa.

Peabody Pacific Pty Ltd: In mid-2008 a $50 million expansion of the Wambo wash plant was completed. The Metropolitan Colliery is seeking approval for a $50 million expansion to extend the mine life by 23 years until 2034 and to double the coal production to 3 Mtpa.

Gloucester Coal: At the Stratford wash plant a product stockpile expansion is expected to be completed in mid-2009. Gloucester is seeking approval to extend to Duralie operation beyond 2011.

Felix Resources: In late 2008 construction commenced at the $405 million Moolarben project. The 10 Mtpa thermal coal project is expected to start shipping coal in 2010. After the open-cut has reached full capacity an underground longwall operation is planned to be installed at the mine.

Gujarat NRE Resources: Development commenced at the NRE Wongawilli Colliery in February 2008. Gujarat plans to spend $65 million over two years to increase production to 2.5 Mtpa in 2010-11. The Wonga Mains Project at the NRE No1 Colliery commenced in January 2008. The project involves driving three roadways into the Illawarra escarpment at Russel Vale to access to the Wongawilli coal seam.

Yancoal Australia Pty Ltd: The $80 million Stage 3 Austar Longwall Top Coal Caving (LTCC) mine extension project is expected to start extracting coal in 2010.

Donaldson Coal Pty Ltd: The $84 million Abel bord and pillar mine commenced operation in March 2008 with a production capacity of 4.5 Mtpa over a 21 year mine life. Coal will be trucked to the existing Bloomfield coal processing plant.

Whitehaven Coal Mining Ltd: The $140 million, Stage 1 Narrabri project consists of a 2.5 Mtpa bord and pillar operation which is expected to commence in late 2009. The $90 million Stage 2 project consists of a 7 Mtpa longwall planned to commence in 2011. The $15 million 1 Mtpa Sunnyside open-cut mine started production in December 2008. The $35 million Rocglen open-cut commenced operation in late 2008 at a rate of 1.5 Mtpa.

Wyong Areas Coal Joint Venture (Kores Australia 82.25%): The $550 million Wallarah 2 Coal Project is planned to produce 4 to 5 Mtpa of export quality thermal coal over a 40 year period.

Coalworks Ltd: At the Oaklands North Project near Jerilderie a 3 Mtpa open-cut mine is proposed to export thermal coal.

Coalpac Pty Ltd: In January 2009 the NSW Department of Planning approved a $4 million expansion of the Invincible mine from 500 000 tpa to 0.9 Mtpa which will increase the mine life to 8 years.

Industry Developments - Western Australia and South Australia

Aviva Corporation Ltd: The proposed $1 billion 400 megawatt (MW) Coolimba Power Station will use 2.4 Mtpa of coal from the Central West deposit in WA. Aviva plans to incorporate carbon capture and sequestration technologies into the project.

The Griffin Group: Griffin Coal plan to develop the $20 million Ewington 1 coal deposit about 2 km east of Collie in WA. The proposed 3.4 Mtpa mine is expected to start operating in 2009.

Perdaman Chemicals and Fertilisers: Perdaman is proposing to construct a $3.5 billion fertiliser plant at Collie using 2.7 Mtpa of coal and gasification technology. The project is planned to produce 2 Mtpa of urea starting from 2013.

Babcock and Brown Power: At the Leigh Creek mine in SA, Babcock and Brown Power is investigating extending the life of the open-cut beyond 2018.

Altona Resources plc: At the Wintinna coal deposit in SA, Altona plans to develop a US$3 billion, 10 million barrels per annum coal-to-liquids plant with a 1140 MW power station.

Industry Developments - Infrastructure

Abbott Point Coal Terminal: The $95 million expansion from 21 to 25 Mtpa is due to be completed in 2009. The $818 million, Stage 3 expansion of the terminal from 25 to 50 Mtpa is planned to be completed in 2010.

Dalrymple Bay Coal Terminal: The $590 million Stage 1 expansion from 60 to 68 Mtpa was completed in March 2008. The $341.7 million Stage 2 expansion from 68 to 72 Mtpa was completed in December 2008. The $419 million expansion from 72 to 85 Mtpa is expected to be completed in June 2009.

Hay Point Coal Terminal: BMA Coal is considering the potential for expansion beyond the current 44 Mtpa.

Port of Gladstone: The $4 billion Wiggins Island Coal Terminal is planned to be developed in three stages with the initial capacity of 25 Mtpa due to be completed in 2012. Full capacity is expected to be 90 Mtpa.

Port of Brisbane: A $65 million expansion of the port is due to be completed in 2010, increasing capacity from 7 to 10 Mtpa.

Port Alma: Xstrata has commenced a $4 million pre-feasibility study into a $1 billion coal terminal at Port Alma with a capacity of up to 30 Mtpa.

Port of Newcastle: The $458 million Kooragang Island Coal Terminal expansion from 102 to 113 Mtpa is expected to be completed in late 2009. Construction commenced in January 2008 on the $1 billion Newcastle Coal Infrastructure Group's (NCIG) Coal Terminal. The Terminal will have an initial capacity of 30 Mtpa and is due for completion in 2010.

Queensland Rail: The 69 km Northern Missing Link Rail Project between the Goonyella and Newlands rail systems is expected to be completed in 2010. The proposed $1 billion 207 km Southern Missing Link Rail Project between Wandoan and Theodore is planned to be completed in 2011.

Australian Rail and Track Corporation: The Hunter Valley rail network is planned to be expanded to 120 Mtpa in 2009 and 150 Mtpa by 2011 at a cost of $207 million.

Industry Developments - Research and Development

CSEnergy: Work on the $206 million Callide Oxyfuel Project commenced in November 2008. The 120 MW Callide A power station is being retrofitted with oxyfuel combustion technology.

Delta Electricity and CSIRO: A $5 million post carbon capture pilot facility was commissioned at the Munmorah power station in mid-2008. The facility will use ammonia absorption technology and the program is expected to be completed in 2009. The pilot facility will determine whether a larger $150 million demonstration plant should proceed.

ZeroGen Pty Ltd: A 120 MW Integrated Gasification Combined Cycle demonstration plant is planned to be built at Stanwell in Central Queensland.

Australian Government: In September 2008 the $100 million Global Carbon Capture and Storage Institute initiative was announced. The Institute aims to facilitate carbon projects and identify and support research.

Tarong Energy and CSIRO: A $5 million post combustion CO2 capture pilot plant is planned to be installed at the Tarong Power Station.