by Bruce Robertson (Shell), Tony Singleton (Shell) and Jeremy Busfield (Australian Mine Consulting Services), published in After 2000 - The Future of Mining, (2000) pp 86 - 95 (The Australasian Institute of Mining and Metallurgy: Melbourne). Republished with the permission of The Australasian Institute of Mining and Metallurgy.

This paper will be published on ILN over three weeks beginning 15 May.

Part I (published 15 May)

Background to the current international coal climate

Coal production patterns

Part II (published 22 May)

Longwall mining

Longwall mine design

Longwall production issues

Emerging longwall trends

Bord & pillar mining

Part III (published 29 May)

General Issues

Exploration

Health and safety

Environmental management

Reliability and maintenance

Contractors

Summary and conclusions

PART ONE

World coal producers have been under constant pressure in recent years due to falling export prices arising from oversupply and the Asian slowdown. This has resulted in a dynamic market place, a sharpening of focus on bottom line costs and some rationalisation of participants. Productivity has increased dramatically as many inefficiencies, typical of the coal industry, have been eroded through workplace reform. This is true for both open cut and underground sectors of the industry.

At the same time, the technology of underground mining is undergoing dynamic change. Mine operators are implementing better exploration and planning tools and are also starting to make gains against chronically low availability and utilisation. “Step-change” improvements in output are imminent. As the statutory environment shifts to a “duty of care” regime, it is hoped that mine safety performance will improve, particularly with regard to fatalities.

The focus of the paper is on the Australian coal sector, although references to international benchmarks are made. Despite environmental threats to the future of coal, it is concluded that the next 10 years will see impressive performance results from underground coal mines which will assist coal to maintain its position as the preferred fuel of lowest cost.

INTRODUCTION

Black coal has been the mainstay of industrialised countries for over 200 years. Its abundance around the World could support its sustained use for decades into the future, provided that it is extracted and utilised in a responsible manner and that society continues to support rational development. Green politics and sectoral interests have threatened the position of coal as the fuel of choice, despite its advantages of low cost and convenience.

Coal producers, in the developed nations at least, are fighting two threats – a sustained real terms fall in prices (30 to 40% reduction in Australia over the last decade) and a community which increasingly perceives coal as an environmental liability. However, the reality is that energy alternatives (eg gas, nuclear, renewables) are generally more costly, characterised by risks of their own, and simply not abundant enough to significantly displace coal in the foreseeable future. Therefore the sensible way ahead for the coal industry must be to maintain and improve upon its competitive position and so promote its sustainable use into the next millennium.

Coal is extracted by both surface and underground mining methods and whilst shallow resources are abundant in many countries, underground mining will inevitably become more dominant in the future. This is not only because of a greater underground resource base but also because the overall environmental impacts of underground mining are likely to be lower than for open cuts, resulting in easier access to resources. This is not to say that surface coal mining will not remain competitive for some time. Coal mined from large scale surface mines in the western United States has displaced large tonnages of underground coal from markets in the east and south of the country due to sulphur penalties and low delivered energy cost.

The competitiveness of any mineral resource will always be a function of resource attributes, market factors and business skills. However, as shallow open-cut reserves become depleted, underground mining will become more dominant and its cost of supply will be a function of how effectively its technology can be developed.

COAL PRODUCTION PATTERNS

Coal supplies about 26 % of the World’s energy needs. Coal is an abundant commodity with over 400 Bt of recoverable hard coal resources reported in the USA, Russia and China alone. World production by underground methods appears to have levelled off at about 2.5 Bt per annum or about 62 % of saleable hard coal (Fig 1). Over half of the underground coal is produced in China.

Australia is the fifth largest producer of hard coal (219 Mt in 1998), but the world’s largest exporter (167 Mt in 1998), contributing around A$9.5 B of export earnings in the last financial year. Production trends (Fig 2) illustrate a steady increase in annual Australian raw coal production over recent years to 275 Mt in 1998, of which underground mining contributed 79 Mt (29 %). NSW produced 55 Mt (raw) from underground mines in 1998 compared to 24 Mt from Queensland.

Whilst it is evident that longwall production has progressively increased in proportion to bord and pillar production in Australia (and the United States), there are many instances where non-longwall methods are more appropriate.

Relative mining method advantages

In summary, bord and pillar mining is less capital intensive and more flexible to deploy but longwalls offer high capacity and generally lower unit costs. There are however many examples, especially in the USA, where efficient bord & pillar mines are more profitable than longwalls.

International underground productivity comparisons

US mines are generally the most productive. It is arguable that mining conditions and equipment in use in the USA are certainly no better than in Australia, hence it must be concluded that higher productivity results from better utilisation of equipment and labour. At the risk of generalising, the authors suggest that this arises through better understanding of conditions due to experience, and by organised mine teams with common enterprise values and motivated by competition in a tough market. Encouraging signs have begun to emerge recently with new Australian longwalls posting world class production results, arising from favourable conditions, leading edge equipment and competitive employment arrangements.

Part II to be published 22 May. Part III 29 May.