The production of premium quality, hard coking coal is still the lifeblood of Queensland’s Bowen Basin. The region remains the world's biggest exporter of coking coal, and looks set to remain so for many years.
At the same time, once overlooked boutique products have become a significant growth area for the state’s coal sector. While the past few years have been all about the boom in coals for use in pulverised coal injection (PCI) applications, it is the environmentally-friendly thermal coals for export markets that are now being targeted.
In 2000-2001 Queensland reconfirmed its position as the world's largest seaborne coal trading state, accounting for roughly 20% of that trade. The state produced a record 138.3 million tonnes of saleable coal, 14Mt more than the previous year. Export tonnage to 32 countries rose 12% to 117.56Mt, compared with 104.79Mt produced in 1999-2000. The growth in thermal exports was particularly impressive, up 18% on the previous year.
The increase was mostly attributable to opencut mine expansions and incremental expansions of mines. Productivity per person continued to increase, rising 14.5% from 14,483t per man per year in 1999-2000 to 16,579tpmy in 2000-2001.
The period of much-touted rationalisation throughout the coal industry was followed up last year by a focus on consolidating these efforts to improve the productivity and competitiveness of operations. Exploration activities during the year by larger companies were focused on areas adjacent to operating mines, aimed at confirming geological interpretations and fine tuning geological models. A key focus was delineating additional coal resources for potential longer-term development.
The period was also marked by further consolidation of ownership, most notably the Central Queensland Coal Associates (CQCA) and Gregory joint venture that had owned seven mines, including the Blackwater and South Blackwater coal mines. Following the takeover of previous CQCA partner QCT Resources by BHP Billiton and Mitsubishi Development, plans to integrate the two mines into one vast opencut complex with a production capacity of 14 Mt per annum were announced. The complex was on schedule to produce this tonnage in the 12 months to June 2002, despite the closure of its two underground mines, Laleham and Kenmare.
Meanwhile, the BHP Billiton Mitsubishi alliance has continued feasibility work on the development of the Goonyella punch longwall project. An additional high resolution 3D seismic survey over 4 square kilometres was run.
Bullish predictions for skyrocketing electricity demand from Asia are driving the development of more thermal deposits. Research agency ABARE forecasts that through to the end of 2003, 9.2 gigawatts of new coal fired electricity generation capacity will be commissioned, requiring more than 20Mtpa of steaming coal supply. ABARE said Australian producers had a competitive advantage in supplying coal to Asian countries. In 2000, the landed price of Australian thermal and coking coal in Japan was $US34.59 and $US39.01 a tonne, which compared favourably with other exporters.
According to the last ABARE commodity report, Australian Commodities: Forecasts & Issues, the combined capacity of committed or under construction projects in Queensland is 10.7Mt at an estimated cost of about $800 million. New capacity will come from the BHP Billiton Blackwater expansion, the 5.5Mtpa Rio Tinto Hail Creek development, and the 3Mtpa Millmerran thermal coal project. Construction of Hail Creek is well underway with first coking coal shipments planned for the third quarter of 2003. Millmerran will supply an 840MW base-load power station, due to be fully operational by December this year.
A host of other projects remain in the wings. Development decisions will hinge largely on coal price movements in the next 12 months. Rio Tinto's Blair Athol operation, which produced almost 12Mt of saleable coal in 2000?2001, is now operating in areas previously mined underground following the evaluation of appropriate mining methods in 2001. Once the mine's resources are exhausted, the nearby Clermont deposit is expected to be developed. A pre?feasibility study on these thermal resources has been undertaken.
Major Bowen Basin coal miner MIM Holdings has announced big plans for its coal division, recently signalling a doubling of coal production from current levels in the next five years. This would see total output rise from current levels of about 22Mtpa to 37Mtpa. Speaking at an investor briefing in April, MIM managing director Vince Gauci said coal output had doubled in the five years to 2001 and would double again in the next five years. "This will be achieved through further increases in production from existing mines, from the development of new projects and from opportunistic acquisitions where they provide us with extremely good value," he said.
