Published in September 2007 Australian Longwall Magazine

Companies are vying for tenements in the Surat, Galilee and Gunnedah basins and pouring cash into exploration and feasibility studies.

And it is not just your newly listed explorers looking for paydirt that will rocket their share price into the stratosphere - the big boys of coal are stamping their footprint on these new areas.

BHP Billiton is building a massive project in the Gunnedah Basin and Xstrata is well into a feasibility study in the Surat Basin of what could become Australia's biggest coal mine.

Along with these new mines will come massive infrastructure projects with rail being built to feed coal out of the basins to the major ports.

Once the infrastructure is complete, whole untouched areas will be opened up that will change the geographic footprint of coal mining in Australia.

Surat Basin

Set to rival any current coal project, Xstrata Coal's proposed 20 million tonne per annum Wandoan mine in the Surat Basin is sure to make its mark.

During June, Xstrata announced with its joint venture partners Itochu (12.5%) and Sumisho Coal Australia (12.5%) it had begun investigations into the feasibility of Wandoan, located in the Taroom shire.

The project has a mine life of 30 years and Xstrata's leases cover 32,000 hectares west of the Wandoan township.

The future of the project is inexplicably linked with development of a rail line out of the basin. Declared a significant project by the Queensland Government, Wandoan was the initial driver for the Southern Missing Link.

This rail line will link the Surat with current rail to the Port of Gladstone and the proposed Wiggins Island Coal Terminal which will have an initial capacity of 20Mtpa as early as 2010.

During July the Surat Basin Railway Consortium, which Xstrata is a member of along with Anglo Coal, got the definite go-ahead to build the $1 billion-plus rail connection.

The rail line effectively opens up 4 billion tonnes of thermal coal.

The line will achieve financial close by 2010, with a decision expected on Wandoan by late 2009.

It was also decided the link would be a dual gauge line to handle huge standard gauge coal wagons as well as the smaller narrow gauge equipment used by Queensland Rail.

Not only does the standard gauge line allow for larger capacity wagons, but it may also result in lower coal freight rates, because it would give interstate train operators a fair chance to compete against QR for coal contracts.

Xstrata wasn't the only winner with the rail announcement, with junior Northern Energy applauding the decision.

Parts of the rail line will be state owned, meaning no coal company can create an infrastructure monopoly and smaller players will get a chance to prosper also.

Northern Energy is carrying out an evaluation of its Elimatta project in the Surat Basin. The thermal project contains 222Mt (22Mt indicated, 200Mt inferred) and the company says it will bring project development up to speed to coincide with rail development in 2011.

Whilst Xstrata is hitting the big time in the Surat, coal major Anglo Coal will not be left behind with the major Taroom coal deposit.

In February this year, Anglo and Mitsui Coal Holding expanded their presence in the basin snapping up Sennen Resources' 90% interest in the Collingwood and Ownaview coal projects for $10 million.

Collingwood contains a measured resource of 85Mt and an indicated resource of 30Mt, while Ownaview contains a measured resource of 172Mt.

Reasonably new explorer Cockatoo Coal has also got its foot in the door with its 100%-owned Guluguba project, 20km southeast of the Wandoan township. To date Cockatoo has released drilling results of an average strip ratio of 3.92 bank cubic metres and a range between 1.65bcm and 8.25bcm.

Already at work in the Surat Basin, New Hope recently gave itself the capacity to produce more than 3.6Mt out of its New Acland coal mine with a new coal handling and preparation plant on the site.

Coal giant Peabody Energy (Australia) has also been at work in the basin since 2005 at its Wilkie Creek opencut mine. Peabody also owns the Horse Creek reserves.

Tarong Energy is contemplating its fuel supply options beyond 2010, and has the Glen Wilga reserves, near Chinchilla, in mind.

The Surat Basin has also been earmarked as an ideal target to begin gasification of underground coal deposits for power generation and liquid fuels.

A landmark trial was announced mid-last year by Australian listed Metex Resources and the CSIRO, with both groups expecting power generation at the same costs as conventional stations but with significant reductions in greenhouse gas emissions - a valuable commodity in this day and age.

The technology involves drilling a range of wells and bores to gasify coal deposits in situ to produce a gas suitable for power generation.

Metex and the CSIRO own coal leases covering 2375 square kilometres. The deposits targeted are deep where current underground mining methods and inefficient extraction techniques would make mining uneconomic.

Galilee Basin

The most active coal explorer in the largely undeveloped Galilee Basin by far is start-up player Waratah Coal. Company director Peter Lynch envisages the Galilee Basin could eventually produce up to 100Mtpa for 100 years.

"Our primary goal now is to prove up enough resources and a mine plan that supports a 25Mtpa for 20 years starting operation in the Galilee Basin," Lynch told Australian Longwall Magazine .

Drilling to date has intersected the four main seams, ranging from 2.2m to 6.2m thick. Lynch says the Galilee project would start as an opencut operation before progressing to primarily underground mining.

At time of writing, Waratah was on the verge of releasing a resource statement following completion of the current drilling program and assessment of the results.

Gunnedah Basin

The Gunnedah Basin has been a flurry of activity over the past few years. While smaller companies have been developing and operating mines at the ground roots, it is BHP Billiton that has moved in with the big guns planning to invest $2 billion on capital works and infrastructure to enable its Caroona project to get off the ground.

Located 50km southeast of Gunnedah, the Caroona area has an estimated 500Mt of untapped coal resources. BHP holds a five-year exploration licence over the area.

The mine approvals process will commence in 2010, with construction slated for 2012 and first coal expected in 2014.

BHP will work with the Australian Rail Track Corporation to upgrade rail infrastructure to transport coal to Newcastle Port. The rail upgrade includes the option to tunnel through the Liverpool Ranges - which separate the Gunnedah from access to the port.

Backing its play in the Gunnedah is Whitehaven Coal, which debuted on the Australian Securities Exchange in June this year. Whitehaven is backed by big names - former Excel Coal managing director Tony Haggarty and AMCI co-founder Hans Mende.

Whitehaven currently has three operating opencut mines - Canyon, Tarrawonga and Werris Creek - in the Gunnedah Basin, with plans for three new mines including an underground project in the pipeline.

The underground project, 24km northwest of Boggabri, is being developed with associated company Narrabri Coal. Last reports were the mine would initially be developed as a continuous miner operation before upgrading to a longwall around 2011.

Many other players in the basin are actively pursuing developments or operating mines, making the northern NSW region one area to watch.

In recognition of the changing geographic footprint of coal in Australia, Australian Longwall Magazine will produce an exclusive wall map - Coal's New Frontiers - in its March 2008 edition.