Overall the contract term is around five months with over 300,000 ROM tonnes targeted within the existing highwall of the S2 pit.
Highwall mining represents a short term, low cost, low impact incremental increase to production from Isaac Plains and the introduction of incremental highwall mining production provides benefits to Stanmore in better utilising the significant infrastructure and fixed cost base already in place for the open cut mining operations, Stanmore managing director Nick Jorss said.
“We are very pleased to have signed this contract with UGM after more than 12 months of preparation, detailed design and discussions with relevant state representatives,” he said.
“Highwall mining is an attractive option for Stanmore at Isaac Plains given the potential to produce low cost, low impact incremental tonnes of coking coal to be sold to existing and new customers.
“The additional coal is expected to be produced at an FOB cost which is around 20% lower than the current open cut cost, given the largely fixed nature of the infrastructure costs which are already covered by open cut mining operations.”
Highwall mining activities are geographically separate from the existing open cut operations in the northern pits and have no impact on open pit production.
Increased coking coal production is planned to be first utilised for the existing steel customers in Asia with any surplus tonnage potentially being used to establish new customers.
Highwall mining is a low cost, low impact mining method to extract otherwise uneconomic coal at the end of an open cut pit life, according to Stanmore.
It has been extensively used in the USA and Australia including at Glencore’s Newlands and Ulan mines and Anglo American’s Dawson mine.
The highwall mining equipment is operated remotely meaning there are no personnel underground.
Stanmore and UGM have engaged a leading geotechnical consultancy to carry out the geotechnical investigation and design of the highwall mining area including cut width and barrier sizing.
Stanmore and UGM have worked closely with the relevant state government departments in relation to the planned highwall mining extraction method. A revised Plan of Operations has also been submitted and accepted by the Department of Natural Resources and Mines which reaffirms the approach and process undertaken by the company.
In addition, the highwall mining zones have been designed so as not to interfere with future access to the underground resource which is being investigated as a potential bord & pillar operation.
The contract for highwall mining rewards UGM for delivery of run-of-mine coal to the pad on the S2 pit floor. The UGM contract is designed around a ROM production target of 70,000 tonnes per month at a dollar rate per ROM tonne.
Stanmore is responsible for the provision of certain services including water and power connectivity. Golding Contractors has been awarded ROM coal haulage services for delivery of mined coal to the processing plant where Golding will also then process the coal to deliver high quality coking and thermal products.
In addition, Golding’s current roles and responsibilities for statutory positions and safety systems at site will apply over the highwall mining operations with all safety procedures, inductions and other activities reporting through the single Golding interface.
This is key to ensure a smooth continuation of the strong safety culture and focus to date which has resulted in nil lost time and nil reportable injuries.
Given the geographical separation between the open cut operations in the northern pits and highwall mining in the southern pits of the Isaac Plains mining lease, there is limited interface between the two mining zones.
