Idemitsu expands Boggabri Coal

At the AJM Gunnedah Coal Conference Idemitsu’s head of NSW operations Peter Wilkinson said Boggabri Coal had 274mt of coal resources accessible by open cut methods, 50% of which is to a measured status.

Boggabri Coal commenced mining on the lease in 2006, initially producing 1.5mtpa.Output currently sits at 3.2mtpa, but this figure would rise to somewhere near 7mtpawith the proposed expansion. The company was initially focused on thermal coal, but the expansion would see it increase levels of semi soft coking coal production.

Wilkinson said the expansion would cost $350m, excluding mining equipment, and include a 1,500 tonne per-hour crusher, a 350 tonne an hour prep plant that may be expanded to 500 tonne an hour, a 400,000tonne stockpile and an allowance for the introduction of a dragline operation.

Joint rail lines through to the mine will be discussed with the neighbouring Aston Resources. However, Wilkinson said that if an agreement did not eventuate, Boggabri Coal would continue to operate haul trucks to its current lifting facility.

The majority of coal currently produced at Boggabri Coal is 11% ash, with some coming out of the seam at 4%. With this low level of ash, the company does not have a washplant. However, Idemitsu plans to construct one to exploit an expanded range of marketing opportunities.

“We will be building a washery to allow us to access a higher value market in PCI and semi soft coking coal –even so, we will only be washing about 25% of the coal and in later years that drops to about 15%.”Wilkinson said Boggabri Coal sees significant potential for this market, based in the Pacific region, over the next five years above the potential of hard coking coal.

Wilkinson said port capacity is already secured to accommodate future production increases. “We have take or pay contracts in place for 6.5mt in addition to current production. It was our strategy to get about50% with each of the terminals [NCIG and PWCS], and we have succeeded in doing so. That allows us to set up a neat logistics operation for the mine.” He said Boggabri Coal has a flexible contract with Pacific National to allow for increased production.

Coalworks currently employs a 95% local workforce, which it plans to expand from 150 to 450 people over the next two years. Wilkinson said the company was confident of keeping 90% plus local workers. Also, the company’s mining contractor, Downer EDI, is working with the Aboriginal Mining and Building Association to develop an indigenous employment program.

Unexpectedly, Boggabri Coal supplied local action group the Maules Creek Community Council (MCCC) with $10,000 to review its Environmental Assessment. The money was used to cover the cost of a range of consultants to look at various aspects of the assessment.

The MCCC raised a number of concerns, including concerns over the expansion’s affect on habitat for flora and fauna, groundwater and soil. Idemitsu, like Aston Resources, is working through the Part 3A process. “We have probably made their job a whole lot easier now,” Wilkinson said.

He explained that while the $10,000 funding had created a negative submission in some ways, there was an overall benefit, in fostering positive relations with the local community.