Published in the November 2006 Mining Monthly

It is called black gold and while political horns are locked over nuclear power generation and wind farm electricity, the nation’s coal industry is booming and cementing its position as Australia’s largest commodity export earner.

It is thriving, it is expanding as latest national figures show almost half (23) of Australia’s top 50 ranked mines based on the notional cash value of their operations are in the coal sector.

Billions of dollars in capital are being streamed into new mine development and infrastructure as the world’s fourth-largest coal producer sees dozens of new ventures – at stages from feasibility testing to construction – taking place in the heartlands of Queensland and New South Wales.

Australia now accounts for a third of global coal exports and is the world’s chief supplier of seaborne hard coal. In a volatile resource sector, the exploration millions are pouring into the coal industry.

Australian Coal Association and industry company executives say Australia has in situ black coal resources to last more than 200 years at current production rates.

NSW and Queensland account for 97% of black coal production, with 90% of more than 73 billion tonnes of identified reserves at the end of 2005.

The other coal-producing states of South Australia, Western Australia and Tasmania account for only a handful of approximately 100 producing black coal mines, the majority opencut operations.

The NSW coal industry represents more than $5 billion annually to that state’s income and the Gunnedah basin is being labelled “the new coal frontier” with largely unexplored reserves of 1.2Bt.

In Queensland, billions are being invested in new operations such as the Dawson Project, and in the last 12 months the Queensland Government has fast-tracked more than $2 billion into road, rail and port infrastructure for the industry and claims “worldwide buyers are clamouring for Queensland coal”, predicting coal production will increase 7% a year.

Australia depends heavily on coal for competitively priced electricity and the global mining giants are pouring resources into coal production, exploration and new technology aimed at the ultimate goal of near-zero emissions technology .

Global energy demand is expected to increase nearly 60% by 2030 and former Rio Tinto Coal Australia managing director Dr Grant Thorne believes near zero emissions technology is the industry’s “great prize that will transform coal’s future”

He said the emphasis was now on finding ways to reduce coal’s contribution to greenhouse gas emissions in a way that preserved its economic edge over other fuels.

UK financial commentator David Kuo claims coal production has “returned to favour with a vengeance as commodity prices climb on the back of soaring demand” but believes the popularity of coal hinges on continuing high oil prices.

Global mining giants BHP Billiton, Xstrata, Rio Tinto and Anglo American are among the major players in the Australian coal industry.

Ranking Australian mines based on a notional cash value the operations would have provided if annual production had been sold at December 2005 commodity prices, almost half the top 50 were coal mines, two in the top 10.

The list was compiled by Intierra Mapping, a division of Intierra, based on December 2005 quoted export prices for hard and soft coking coals, thermal and pulverised coal injection coals.

The three leading coal mines were all part of the Queensland operations of Australia’s largest coal miner and exporter, the BHPB/Mitsubishi Alliance (BMA).

Operating in the coal-rich Bowen Basin, which covers an area of 75,000 square kilometres with known resources in excess of 28Bt, the mines are among seven – producing close to 60 million tonnes per annum – the 50:50 alliance operates.

The alliance said it was currently expanding operations “in response to strong growth in global demand for high quality coking coal” and options for further expansion to 80Mtpa by 2010 were being evaluated.

Of their top performing mines, two that make the nation’s top 50 are among the largest opencut mining operations in Australia – Goonyella Riverside and Blackwater – each producing around 14Mtpa.

Blackwater, which produces coking and thermal coal 300km west of the port of Gladstone, began operations in 1967 and in December 2002, the South Blackwater opencut operations previously owned by QCT Resources were combined with the Blackwater mine.

It produces coal from the Rangal coal measures with seams averaging 7-7.5m thick, while Goonyella Riverside is the northernmost of the mines operated by BMA in the Bowen Basin, producing coking coal.

Goonyella began operations in 1971 and Riverside was commissioned in 1983 by BHP Mitsui.

By 1989, Goonyella merged operationally with the adjoining Riverside mine and from last year, with the existing Riverside reserves exhausted, the mine is now wholly owned by BMA.

Also in the top 20 mines is the BMA Peak Downs 9Mtpa coking coal operation. Markets for all the operations are in South and East Asia, Europe, the Middle East, the Americas and India.

In Queensland, Rio Tinto Coal operates joint venture operations at Blair Athol, Australia’s largest export thermal coal mine, Kestrel and Hail Creek.

The latter has marketable reserves of about 184Mt and a projected expanded capacity to 8Mtpa.

Rio also mines about 12Mtpa from its NSW Hunter Valley operations.

Anglo Coal, part of Anglo American, has extensive coal mining interests and prospects in Queensland and NSW with sales of about 40Mtpa.

Xstrata has major coal holdings including high-ranking Oaky Creek in Queensland, both underground and opencut operations, exporting medium volatile, low ash coking coal mainly to Japan and South-East Asia.

The mining of black coal is cementing its place as one of Australia’s most important industries as fuel for low cost electricity generation and steelmaking and crucial export income but it is also a massive influence in the regional economies in NSW and Queensland where multi-billion dollar investment and expansion are taking place.

In Queensland, with 30Bt of identified black coal resources, one of the original mines in the...click here to read on.