The decrease can be attributed primarily to pit sequence changes in the fourth quarter of 2010 to deliver increased coal production in that quarter and delayed prime overburden movement due to above average rainfall resulting in low blasted inventory in early 2011, the company said.

Mount Thorley Warkworth’s saleable coal production was 18% lower than the previous quarter which was also due to water issues in one particular pit requiring drainage works and subsequent delays to coal production.

Coal & Allied is planning to start environmental assessment work for potential longwall mining at its Mount Thorley Warkworth (MTW) operations.

The Hunter Valley open cut miner has already conducted geological modelling work, which included seam selection and mine layouts based on longwall mining methods.

In a recent presentation, Coal & Allied managing director Bill Champion revealed there had been an “acceleration” of resource evaluation for MTW underground mining in early 2011.

Bengalla’s saleable production was 10% lower than the previous quarter and 22% higher than the corresponding quarter last year.

Bengalla’s lower production this quarter was attributable to mining fewer productive passes compared with the prior quarter.

Coal & Allied’s share of coal sales for the fourth quarter was 4.7 million tonnes, 12% lower than the December 2010 quarter and its share of semi-soft coking coal sales volumes represented 19% of total attributable coal sales in the first quarter compared with 18% in the previous quarter.

“The devastating impacts of the earthquake and tsunami in Japan have impacted coal-fired power stations and general industry north of Tokyo and on the country’s east coast,” the company said.

“Some of our customers have been affected and we continue to work with those customers to reschedule vessels and to help manage supply in the future. Whilst there will be some reduction overall in demand from Japan over the next six to twelve months, the overall demand position is likely to be offset by increased demand in other regions in Asia.”

Coal & Allied is eyeing longwall opportunities in the Hunter Valley and its major geological work undertaken last year not only updated geological modelling but included seam selection and mine layouts based on longwall mining methods.

“The new work has resulted in a reduction of underground resources, principally at Hunter Valley Operations,” Champion said recently.

“Although underground resources have decreased, the company now has a much higher degree of confidence in the development potential of what remains a very large underground resource base.”

The revision cut underground mining resources to 125 million tonnes, all in the inferred category.

This is compared to the total of 477Mt of underground mining resources at the end of 2009.

But the mine also boasts 263.2Mt of marketable reserves of both thermal and met coal.

The Rio Tinto subsidiary did not reveal the marketable reserves specifically suitable for underground mining at any of its mines.

However, this was not the case for resources.

The Mount Pleasant project has 124Mt of met coal resources in the inferred category for underground mining.

The Mount Thorley mine hosts 81Mt of underground resources with 18Mt indicated and 63Mt inferred.

This thermal and met coal mine has 23.8Mt of marketable reserves, considerably less than the others in the Coal & Allied portfolio.

With 18Mt of open cut resources, the development of an underground operation could extend its mine life.

The associated Warkworth thermal and met coal mine holds 296Mt of resources for underground mining, including 86Mt indicated and 210Mt inferred.

At the Bengalla mine, which Coal & Allied equally shares with Wesfarmers (40% each), there are 35Mt of inferred resources for underground mining.

All these resources are prospective for met coal as opposed to the 137Mt of marketable thermal coal reserves which are slated for open cut mining.

Rio Tinto Coal Australia principal geologist John Bamberry compiled the underground resources component of the company’s year-end reserves and resources update.