Published in September 2007 Australian Longwall Magazine

A new coal mining hub in the Galilee Basin producing up to 50 million tonnes per annum for 100 years is the vision of Waratah Coal managing director Peter Lynch, who says while many in the industry won't agree, a project of this scale is possible in the current mining cycle.

The Galilee Basin lies to the west of its famous cousin the Bowen Basin, and has been largely unexplored since the 1970s when Lang Hancock discovered a 2.1 billion tonne resource - because "from what I can tell, most people have thought the basin is too far away from the coast and will not be developed," Lynch said.

He believes the company's coal tenements could play host to a massive coal mining complex, supported by a dedicated 500km rail system and an exclusive deepwater port situated at Port Clinton - which will all progress once the resources have been proven.

The Galilee Basin is known to contain Permian-age thermal coals, which when washed produce a highly marketable export quality product.

“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.

If the Galilee Basin project has enough coal behind it and the Government gives its approval, Waratah will be in a financial position to establish the port and infrastructure itself.

“If we prove up the resources, this project will have the tonnage to support a new port and railway - we're not looking to the Government to pay for that," Lynch said.

Waratah's tenements surround Hancock Prospecting's Alpha and Kevins Corner tenements - which is why Waratah is so confident that the massive thermal coal resource continues on its side of the fence.

While many in the Australian coal industry consider the Galilee Basin too far from the coast and established infrastructure to be a viable export coal source, Lynch sees it becoming the next coal hot spot as other Queensland and New South Wales reserves are exhausted.

“Our vision is to try and build the next generation, and start it today," Lynch said.

“We still have a lot of work ahead proving why it is a viable vision, and once that happens it will overcome lots of doubters and they will wonder why they never did it."

Over the past two years, Waratah Coal has managed to secure a significant tenement position within the basin - a total of 220km, with the Hancock tenements in the middle. The main thrust of the current exploration program, which began in March, is to prove the continuity of the known four seams, which account for the 2.1Bt resource on the Hancock licence.

Drilling to date has intersected the four main seams, ranging from 2.2m to 6.2m thick, with an almost-flat, half-degree west dip and competent stone roof and floor hosting the coal seams.

“On the back of its size, this basin could be developed in the current cycle because even though it's export thermal coal, it is very consistent and is amenable to both high productivity opencut and underground methods," Lynch said.

From the company's initial projections, its tenements could hold a resource large enough to produce up to 50Mt of coal for 100 years.

“We still have to complete the drilling program to prove the resource and confirm that there is that amount of coal in the area, but we envisage the project starting as an opencut mining area and after 25 to 30 years it would become primarily underground mining," Lynch said.

“There is also potential for longwall mining in the short term because of the geologically simple structure of the seam and an absence of faulting and thrusting."

This isn't the first time Lynch has been involved in such a grand plan: he was instrumental in the early stages of the Oaky North longwall mine in the Bowen Basin, helping to establish it as a high capacity, low cost longwall mine.

“When we started Oaky North everyone said 'you can't get more than 3Mt out of a longwall', and after that it went on to do 7.6Mt," Lynch said.

"It's a matter of configuring an operation so that it achieves the goal that you set it - if we can get an underground mine to achieve results like Oaky North did, and now Beltana, the raw coal cost of production could be less than $10 per tonne, which is a highly attractive cost structure."

Waratah's vision for Galilee would see large-scale opencut mining along two lines of subcrop mining for 20 to 25 years, which would then provide highwall access for very large longwall panels.

“Underground mining in Galilee won't have to contend with the same geological disturbances which cause costly roof problems in Bowen Basin mines," Lynch said.

"I personally believe it is possible for longwall mines functioning at over 7Mtpa to achieve a ROM cost under $7 per tonne, which would be just as cost effective as open cut."

The viability of getting the Galilee project off the ground will ultimately depend on the political will, Lynch told AL, not the physical task of building the new infrastructure.

Apart from the obvious economic benefits the project would provide, developing a brand-new standard gauge railway line and a bulk coal port would avert any extra pressure on existing facilities.

“If the Government is looking for solutions to the long-term capacity of infrastructure in Queensland, while they can continue throwing money at incremental increases at existing ports they will continue focusing more and more traffic in the existing corridors," Lynch said.

“The construction of the infrastructure to support the development of the Galilee Basin could be undertaken without interruption of the existing Central Queensland coal chains."

Meanwhile, Waratah's early stage review of Port Clinton as a potential port site has found it is a far more attractive port site than the existing Gladstone and Dalrymple ports.

“Port Clinton is the closest deep water comes to the land along the Queensland coast. The 10-fathom contour is some 500m offshore compared to 24km at Dalrymple Bay,"Lynch said.

Additionally, the land-backed berths at the proposed port location are on the western side of a peninsula, which would protect loading operations from bad weather. Lynch says Port Clinton could be built to accommodate the new 350,000-500,000 deadweight tonne Chinamax class bulk carriers, which are set to become a significant portion of the world fleet capacity.

"It's probably the most attractive natural port location on the east coast of Queensland - the biggest issue is it sits inside the Department of Defence's Shoalwater Bay training facility, but the area we will need is not used for training," Lynch said.

“The issue will be getting the political support to establish a separate corridor and port location - we are talking about a project that could potentially be 25Mt a year starting capacity of export coal - at that size it's going to become one of the largest coal projects in Australia.

"It's very much out there in the thinking of the coal industry, but if you don't set yourself a vision or a goal you won't get there."