Published in the January 2006 Australia’s Mining Monthly

BHP Billiton will eventually come online with the Caroona Coal Project, now in its early stages, and Rio Tinto is sitting on coal in the area. Some say the northeast corner of the state is going to be the next big thing for coal mining in New South Wales.

Leading the charge, however, is Gunnedah’s first coal mining player, the Whitehaven Group, which includes a number of privately owned companies developing and operating coal projects in the Gunnedah area. An Australian company with some American partners, it owns two opencut mines (Whitehaven and Tarrawonga) and has a 40% interest in the Werris Creek Mine.

According to Whitehaven Coal Infrastructure managing director Tony Galligan, there are new projects due to come online soon.

Even as a small one-mine operator, the group dominated the region between 1996 and 2006 as the sole coal mining company in this countryside of heritage gorges. That changed last year when Idemitsu opened the Boggabri Mine.

Although competition has come into its backyard, the Whitehaven group is growing fast and will soon be a medium-sized operator. The company’s operations in Gunnedah employs about 120 people.

With three new projects in development, direct employment is likely to more than double over the next few years. Whitehaven is also challenged by skills shortages for positions such as mine managers, but the company says that “for other positions there is a very rich local employment base to draw from, provided we have key people on board to train new starters”

Setting up shop in the region was relatively easy to do, Galligan explained, because mining was still fairly low-key and had put less pressure on competing land users, meaning there was a better reception for coal mining in the basin. “The company enjoys a good relationship with the local councils,” he said, “who in turn appreciate the employment opportunities brought to the region. On two of the operational mines, we’ve moved in our own equipment so we don’t have to rely on contractors and can increase employment opportunities at those operations.” This has been positive for people who have wanted to live locally while also enjoying the benefits of working in the mining industry.

Galligan said the company had consulted broadly with the community on environmental issues. Water use at the mines is low and sourced from bores and from the pits, with some retention dams in place for when the rains do come.

With some plans down the track for longwall mining, Galligan is confident that the environmental issues will not be nearly as pressing as they have been for nearby BHP Billiton or operators in the Hunter Valley. “We will not be undermining any prime agricultural land, major aquifers or rivers and most of the land that will be undermined is owned by the group.”

Getting into Gunnedah first has been an advantage, despite the region’s remoteness. Local contractors have been glad of the infrastructure work, according to Galligan, and the process has been competitive for Whitehaven. He said Whitehaven was a contributor to the Australian Coal Association’s initiative to develop commercially clean coal technology for power generation, including the construction of a demonstration scale model in Queensland.

Galligan is also confident about the commodities boom continuing. “There is still strong demand for our product.” He added that Whitehaven’s coal quality helped it compete with the companies closer to the coast. That distance means transport infrastructure is crucial. Alas, one challenge the group does face is the quality of the railway. The rail system north of Muswellbrook restricts train sizes to 44-wagon trains, with a 75-tonne payload per wagon and 25-tonne axle load. Work is underway, however, to upgrade the rail system to cater for 72-wagon trains.

This involves constructing longer passing loops, upgrading points and signaling systems, and improving access across the Liverpool Range. In the longer term it may be economically feasible to upgrade the system to use 30-tonne axle loads.

Whitehaven is a member of the Newcastle Coal Infrastructure Group (NCIG) consortium that is seeking to construct a new coal export terminal. This terminal will have greater stockpile capacity than the existing terminal, facilitating cargo assembly from more distant regions such as Gunnedah.

On the mining front, Whitehaven uses truck and excavator mining to produce 1 million tonnes per annum from the Whitehaven Mine, which is 5 kilometres east of Boggabri. Raw coal is sent 30km to Gunnedah for washing at the company’s coal handling and preparatory plant, then shipped out from Newcastle. That mine is expected to close in 2008.

The newer Tarrawonga opencut mine commenced production in 2006. Also close to Boggabri and the Gunnedah CHPP, this operation is yielding around 1.5Mtpa. After selective washing, the coal is transported by rail to Newcastle. Joint venture owners Tarrawonga Coal Pty Limited — Whitehaven (70%), Idemitsu (30%) — employ 60 people.

The group’s third operational mine is Werris Creek, in which Whitehaven has a 40% stake. Another 1.5Mtpa comes out of this operation, which is mined by a contractor. The yield goes by rail directly to port at Newcastle.

The Belmont opencut mine is expected to open in 2008, about the time Whitehaven shuts down. The group reports that it expects a yield of 1-1.5Mt from this operation. Environmental assessments are underway.

To the west of Gunnedah lies the Whitehaven Group’s Sunnyside Project with another potential 1Mt of raw coal for export via Newcastle. The group is talking truck and excavator, and maybe auger, mining if the project proves feasible. It is also at the environmental assessment stage.

The last of the three new projects is the Narrabri North Project, situated between Boggabri and Narrabri. Stage one is currently undergoing an environmental assessment and the group expects this project to add another 1.5Mt. A group spokesman said a rail loop would be constructed for rail transport from the project site to Newcastle for coal export.

Narrabri has more promise a little further down the line: a proposed stage two will include the production of an additional 4.5Mtpa from longwall mining.