Bigger, new generation longwalls continue to improve the economic argument for underground coal mining. By Paul Rodgers

There were encouraging signs for Australia’s longwall mining industry during 1998, particularly as some of the country’s larger, state-of-the-art operations finally began to offer glimpses of what they are capable of achieving and as cost-cutting and productivity drives continued at most mines in the face of further reductions in thermal and coking coal prices.

While the latest Joint Coal Board figures for calendar 1998 show that five longwall mines ceased operations during the year, the industry as a whole continued its steady progress towards increased production from fewer longwall faces — implying a continuing improvement in productivity. The statistics also underline the similarity between what is happening to the

Australian underground mining sector today and the American experience over the past 10-15 years, where the introduction of new high-capacity equipment and improved technology has powered massive improvements in productivity at its longwall mines.

Overall, production from longwall mines was up 7% to 66,576,400 tonnes from 34 mines (31 last year), despite the fact that five mines (Clarence, Ellalong, Gretley, Metropolitan and Teralba) officially closed during the year. However, the real story lies more in the make-up of the nation’s top longwall producers, which is becoming increasingly dominated by large, high-capacity operations where the hundreds of millions of dollars of investment may (in some instances at least) now begin to pay off.

BHP’s $350 million Crinum mine and (not for the first time) Cyprus’ South Bulga mine were the standout performers, although Crinum this year grabbed the limelight with an outstanding 12 months of production.

Crinum had kicked off slowly in 1997 as a result of geotechnical problems, but finally hit its straps in 1998, more than justifying BHP’s investment in terms of both time and money (the 1997 start-up itself was behind the original schedule). The operation, which is based on a single longwall face some 270m long (Australia’s longest retreat longwall mining system)

produced 4,438,400t for the 12-month period, exceeding forecasts and beating last year’s 1,988,000t hands down.

South Bulga again exceeded the 4mt level, producing 4,103,900t — up from 3,282,600t in 1997, remaining as the powerhouse of Cyprus’ Australian coal operations, though the mine’s low recoveries and the impact of low thermal coal prices would have toned down their celebrations significantly.

Mines which made it to the “3 million tonne club” were: Shell’s Dartbrook (another operation with a disappointing history over the past few years), which boosted production significantly to 3,185,400t (up sharply from 2,284,400t in 1997 though still shy of its 3.4mt target); German Creek Southern in Queensland (which lifted output to 3,301,300t from 2.6mt in 1997); QCT’s Kenmare (which had a strong year with production of 3,259,900t — 3,044,300t off the longwall alone — up from just 1,964,600t in 1997 and beating its target of 3mt); MIM’s Oaky Creek No. 1 (which produced 3,325,900t, up from 2,557,400t, but just short of its target of 3,490,000t); and Ulan (which had another good year with output of 3,300,300t).

The increased number of operations producing in excess of 3mt and 4mt annually (last year none passed 4mt and only two passed 3mt) highlights the long-term trend towards domination of the larger, high-capacity producers. To illustrate the point further, in 1994 26 Australian longwall faces produced 40,196,000t of raw coal, equating to around 1.5mt per face. In 1998, 34 faces produced 58,292,500t, or around 1.7mt per face. If you discount four of the operations that closed (only Teralba was of any significance at 1,259,800t), the average increases to 1.9mt.

The longwall sector also continued to cement its domination of the underground coal mining industry, with longwall production accounting for 84% of Australia’s underground coal mine output of 78,882,049t in 1998 (compared with 74% in 1997). Longwall production represented 24% of Australia’s 1998 raw coal production (compared with 22.5% in 1997).

While all this sounds very encouraging, there were the predictable black spots. Longwall specialist Cyprus Australia Coal continued to struggle in 1998 despite its successes at South Bulga. The group closed the Clarence colliery and later sold it to Centennial Coal Company Limited, closed Gretley, and sold Ellalong to Gympie Gold Ltd. Its 50%-owned Springvale

mine in NSW had a tough year, with production falling to 1,753,900t from 2,141,800t in 1997. Baal Bone had a steady year, but one dominated by workforce cutbacks. North Goonyella, operated by Cyprus, had a disastrous year with production of 2,484,500t, down from 3,570,900t in 1997.

Clarence has been restarted with a new approach by Centennial, which is a specialist in turning around small underground operations using continuous-miner-based production systems. Southland (formerly Ellalong) has been revived by Gympie Gold and is expecting to churn out 1.5mt of coal annually following a $15 million investment in new longwall equipment. The

reduced workforce of 100 is expected to underpin significant productivity gains.

The West Cliff coking coal operation has been sold by Rio Tinto to BHP Coal following a less-than-exciting year in 1998 and recently kicked off longwall mining as part of its nearby Appin colliery. Production at both Appin and BHP’s Cordeaux operation was affected by longwall changeovers.

Elsewhere, Alliance — which is using the punch longwall mining method — enjoyed a strong year, producing 1,673,200t in its first full year of operations (300,000t in 1997, following start-up in October of that year). Angus Place was also a strong performer, nearly doubling output to 2,039,200t from 1,233,400t in 1997.

Of the new start-ups in 1999, the ones to watch are MIM’s Oaky North mine, which started longwall production in February, and Shell’s Moranbah North longwall, which kicked off in January ahead of schedule. The $500 million Moranbah North operation is expected to be one of Australia’s most productive, producing more than 4mtpa of coal by working a 4.5m-thick seam. With a workforce of 190, this will equate to productivity of around 22,000t per man year, positioning the mine as one of the leading longwall producers in the world. Oaky North will also be keenly watched.

Wambo Mining Corporation will launch its new Wollemi longwall in August, as part of its long-term plan to overhaul its Hunter Valley operations, and Rio Tinto recently started cutting coal again at the Gordonstone mine in central Queensland, which has been plagued by industrial relations disputes since its former owner ARCO sacked its 312-member workforce in October 1997.

The industry continued to post productivity improvements during the year. While the JCB does not publish workforce numbers because of the increased number of contractors in the industry, an indication can be gained from using employment numbers generated by Australia’s Longwalls in a survey last September. On this basis, the industry achieved productivity of 10,512t per man year in 1998, based on the most recently available employment figure of 6333. The extent of improvement is reflected in the comparison with 1994, when 47,917,300t of coal were produced by 7387 employees — equating to 6490t per man year.