"The Gunnedah Basin contains huge reserves of some unique coals. In time this basin will progressively relace the coal from the Hunter Valley as the Hunter’s reserves are depleted,” Ross told International Longwall News.

While distance to Newcastle port is often raised as a restricting factor in the Gunnedah Basin, this is certainly not insurmountable, according to Ross.

“Looking at unit mining cost we are competitive with other Australian operations. Certain features about the Gunnedah Basin give us an advantage over the Hunter – the quality is unique and we get a high yield of product coal.

“Of course that is offset by our higher freight cost to the port – but when you put the whole lot into the mix we are competitive with the Hunter Valley and elsewhere,” he said.

Whitehaven Coal Mining (WCM) currently operates the Whitehaven truck and shovel opencut mine near the Boggabri township. The mine produces about 800,000 tonnes per annum.

Coal from Whitehaven is carried by road 30km to the Gunnedah rail facility and then railed to Newcastle Port where it is exported to Japan, Taiwan and Brazil.

An exploration licence for the mine was originally acquired in 1999 and the company proceeded to develop the mining lease in early 2000 starting with a boxcut, before beginning full-scale mining in October 2000.

Ross said the Whitehaven mine had a further three years of life, before it is replaced by nearby project Belmont in what Ross described as “a bit of a baton change”

“We have got a number of relatively small deposits in the Boggabri area and Whitehaven is the first to be mined. When you talk about what’s the life of Whitehaven – you say, well, what is Whitehaven? Whitehaven has got a life of another three years but then there are other pits we are developing nearby,” he said.

WCM is currently developing the East Boggabri project in which it holds a 70% joint venture interest with Idemitsu Boggabri Coal. Planning approval was received in December 2005 and the mine will be operational by mid-year.

The project, located 15km northeast of the Boggabri township, holds 12.34 million tonnes of proved reserves and will be an opencut operation.

“East Boggabri has a particularly low ash, low sulfur coal, suitable for a range of markets, including the PCI/semi-soft market as well as a blending coal for thermal markets,” Ross said.

Capital cost of East Boggabri will be around $A30-40 million. WCM has managed to keep its capital costs down by using contractors. Roche has been the mining contractor for the life of Whitehaven and is likely to be retained for East Boggabri.

An underground project is being proposed by WCM’s associated company Narrabri Coal on a property 24km northwest of Boggabri. The project is be developed in two stages, with stage one being a continuous miner operation. The approval application process for stage one has commenced.

Over the past two years Narrabri Coal has carried out an intensive drilling and exploration program on the tenements and is planning to come forward with an environmental impact statement in the first half of this year.

If speedy approval is gained, Narrabri Coal hopes to begin stage one in the second half of this year.