Published in the January 2006 Australia’s Mining Monthly
Around 100 kilometres west of Mackay, Queensland, the large-scale operation produces high-quality coking coal for the international steel industry from deposits that were first identified in 1968. However, the open-cut mine was not to become a reality until late 2003.
RTCA, which has an 82 percent stake in the operation, manages the mine as part of a joint venture with Nippon Steel Corporation, Marubeni Coal and Sumisho Coal Development. Other partners to come onboard for the Hail Creek expansion project include the Thiess Sedgman Joint Venture, P&H, Golding, and O’Donnell Griffin.
As one of the world’s major coking coal deposits, Hail Creek employs just under 300 operational staff, and boasts recoverable reserves of 184Mt and marketable reserves of 224Mt. The company describes production as “sound” but says there are “long-life reserves with options for growth”
Along with two P&H 9020 draglines, the mine uses truck and hydraulic excavator systems to mine along two thick seams. The Elphinstone Seam has an average thickness of 6.4m and the Hynds Seam 8.3m. Three drilling rigs perform overburden drilling and the mine uses pre-excavation cast blasting, designed to reduce dragline waste extraction. Following removal and preparation, the coal is transported by rail to the Dalrymple Bay Coal Terminal near Mackay.
Buoyed by rising international coal demand, the already massive operation at Dalrymple Bay plans to expand port capacity to 85Mt per annum and gives the Hail Creek expansion project a fillip.
Two-thirds of the mine’s coal is low-ash, low-sulphur, hard-coking coal. The remaining third is high-ash coal. Japanese steel makers are the mine’s leading customers although it also exports significant amounts to China, Korea, Taiwan, India, Europe and Brazil.
Costs for the expansion project have risen from $US120 million to $US223 million, which Rio Tinto says reflect increased scope and cost escalation. As well as employing an additional 430 construction workers, expansion has meant new equipment including another P&H 9020 dragline, a duplicate coal processing plant and co-disposal plant, as well as building developments and service upgrades. The mine estimates sustaining capital to average $30 million per annum over the life of the mine.
Hail Creek faces a number of ongoing challenges, including safety, cost management and the increasingly important issue of water supply. According to the company, lost-time injuries have dropped since 2004 and have remained consistently low in the last two years, reflecting RTCA’s strong focus on workplace safety.
In addition to safety concerns, RTCA identifies cost management as a key issue for the coal mine. As well as looking at costs associated with fuel, explosives and contractors, Hail Creek has implemented a tyre management program designed to help control costs.
With Nebo, the mine site’s closest town, 35km away, Hail Creek has an obligation to liaise with the local community. Building on earlier community consultation throughout the mine planning stage, the Hail Creek Mine Community Development Fund came into being in 2005. The company says the fund aims to “support local projects that foster sustainable development of the region,” investing in various projects throughout Queensland, including vocational training, employment and sustainable housing initiatives.
The direct corporate benefits of partnerships with local community groups are evident, particularly in a time of skills shortages. Links with the Nebo and Mackay area community and educational groups have allowed the mine to promote careers in mining, address labour shortages and establish a recruitment pool of workers and apprentices.
Another key industry issue is that of water supply and conservation. Hail Creek has made water management a priority and has adopted various strategies, some less involved than others, to achieve a reduction in water usage.
Simple initiatives such as sweeping instead of washing mine site roads have cut water consumption and demonstrate the mine’s commitment to addressing water issues. The financial benefits of reduced consumption are clear. RTCA says limiting light vehicle wash bay times and reducing the number of wash bay sprays has resulted in a 90 percent reduction in water use. This translates to a saving of 200 megalitres per year, as well as a considerable monetary saving.
With rainfall at record low levels, Hail Creek’s participation in the Burdekin Pipeline project will ensure adequate water supply and accommodate further expansion.
Hail Creek’s mantra of “management and expansion” appears to be working. In a brief three years the Bowen Basin mine has achieved rapid, on-schedule development and outstanding production levels.
