The Oaky North complex already has two longwalls operating and these have assisted the mine in maintaining continuous supply, Xstrata Coal chief executive Peter Freyberg recently told an investment conference in London.

“Oaky Creek is one of our most important complexes,” Freyberg is quoted as saying in Seeking Alpha.

“It is a world-class asset.

“It operates two underground longwall mines.

“The Oaky North operation has two longwalls in place so that we can leapfrog from one to the other, making sure that we have continuous production, making sure that establishment times and losses when you relocate a longwall are eliminated.”

Production capacity for the Oaky Creek mining operation is to be expanded over the next five years to develop additional sections of the lease area.

The expansion will include installation of a new longwall mining system and associated development suite, electrical system upgrade and expansion of the existing coal preparation plant.

“We’re in the process of acquiring a second longwall for Oaky No 1 so that whilst the reserves change in thickness and geology, we will have enough flexibility to maintain these levels of output over the long term,” Freyberg said.

“Over and above that, we’re looking at implementing an open pit in that area initially commencing at two million tonnes and in the longer term looking at a five million tonnes possible operation in that area.”

He said Xstrata had developed its Oaky Creek operations and its Bulga and Mount Owen complexes in New South Wales into world-class tier 1 assets.

“The genesis of our business was acquisitions,” he reportedly said.

“We did buy a lot of mines, I guess, in the first half of our life and often the analysts would view those mines and say they were a patchwork of second rate mines.

“Well, we’ve invested heavily into this business.

“We’ve developed the resources around the mines and we have consolidated them into synchronised, efficient mining complexes.”

Its Bulga complex last year produced around 10Mt and has a resource base of around 1.6 billion tonnes and reserves of close to 400Mt.

“This is a true world-class asset with long-life potential and the ability to produce high quality coal, including a semi-soft product at a relatively low cost,” he reportedly said.

“The Mount Owen complex was a single mine, single plant operation.

“Since then we have built the Glendell mine, we’ve added Ravensworth East and today this is operating around 8.3 million tonnes of output.

“It has a material resource still around it and reserves of around 120 million tonnes.

“We currently are undertaking studies to extend the life of that operation, utilising our unique ability that we’ve developed in Hunter Valley to mine complex, deep resources very efficiently with high levels of recovery to extend the life of that mine.

“So it continues to supply the market in the long term.”