The Mining Blog

Xstrata Coal has continued its buying spree with the purchase of Anvil Hill and Austral Coal from Centennial Coal.  Helios Australia (a subsidiary of Xstrata Coal) has paid $1.86 per Austral share.  This means that Centennial will receive A$479 million from XStrata Coal.

Previously, Centennial Coal completed the sale of its Anvil Hill development to XStrata for A$454 million.

Centennial is using the proceeds of both sales to reduce debt and for capital management initiatives.

The NSW government has announced the approval of the controversial Moorlarben mine near Mudgee NSW.

The Greens were challenging the mine, stating that the mine will increase greenhouse gas emissions by 5.3 per cent a year and use 6.9 megalitres of water each day.

However, NSW Planning Minister Frank Sartor said “It’s just not tenable to refuse a coal mine because people might burn coal in China or somewhere else, unless we refused all coal mining”.

I agree with Mr Sartor.  We either mine coal, or we don’t.  There is no point singling out one mine for greenhouse gases just to stop the approval.

As Mr Sartor said when approving the Anvil Hill Mine earlier this year, “a black ban on new coalmine applications in New South Wales alone would devastate the economy, but, worse still, would achieve zero net benefit to climate change because our coal would be substituted with coal from elsewhere”. (Hansard 7 June 2007)

(Update No 2: 3 September 2007)

Have you been following the unfolding story of the rescue attempts at the Crandall Canyon mine? I want to share some links to video clips, pictures and other illustrations to help you understand the situation at Crandall Canyon. I will continue to update this as the story unfolds.

Current News:

Officials at the Crandall Canyon mine have announced that the search for the missing miners is now finished after drilling a seventh hole and still finding no sign of life underground.  This hole was drilled into the miners’ “kitchen”, but officials had expressed disappointment that the hole only revealed 7 feet of rubble.  They had drilled this hole because miners are trained to seek refuge here during a collapse.

 They had also sent a robotic camera down one of the holes, but only found mud.  In fact, they had to abandon the robot down the mine because it got stuck in the mud.

Here is a video taken down one of the boreholes that was drilled into the mine following the initial roof collapse:

(video courtesy of KUTV-2)

I have worked in Australian coal mines for almost 20 years, and have also gone underground at a few mines in the USA. I was surprised at the differencese in safety standards between the 2 countries. One example is the use of diesel equipment underground. In some US states, they cannot use diesel equipment underground, whereas in Australia, they have been using diesels for many years. On the other hand, I was amazed at the use of trolley-wire trains (complete with all the sparks, etc) underground in the USA. So, what about Emergency Response Plans (ERP)? In particular, here is a link to the Crandall Canyon ERP submitted to the Coal Mine Safety and Health District (CMSH) District 9:

Crandall Canyon Emergency Response Plan

This plan also contains a mine layout plan at the end of the document.  As you can see, the plan was approved by CMSH on 13 June 2007. The ERP’s are a requirement of the new Miner Act 2006. As you can see from the Plan, it is pretty comprehensive in terms of providing for sufficient Self Contained Self Rescuers (SCSR), directional life-lines, post-accident breathable air (PABA), trapped-miner maintenance materials, etc.

So what does the Crandall Canyon mine look like, and what are the conditions experienced at the mine? Well, for a start, this is a deep mine - in some places over 2,000 feet (600 metres) deep.

What does it look like on the surface?  Here is a short video showing the terrain overlaying the mine:

I am sure that you have seen the news about mining companies having to scale back coal production due to infrastructure problems.

Rio Tinto’s Coal & Allied Division announced a 20 percent cut in coal production due to bottlenecks in rail infrastructure and Newcastle Port. As a result, 250 miners will lose their jobs this month.

Other mining companies in the NSW Hunter Valley have also had to scale back production due to these same issues. The Austar mine last month announced that it would cut 79 jobs because it could not get enough port access.

Mining companies have tried to reduce the impact of the port problems by re-introducing a quota system for port access.

A consortium led by BHP Billiton has recently been granted approval to build a third coal export terminal. However, this will not open until 2009.

There has been a lot of people jumping up and down about this issue with the port infrastructure.

However, as an engineer, I understand that infrastructure and equipment has operating capacities. When designing systems to handle coal throughput, you only design the system for the required throughput.

Why?

We know that extra capacity or throughput costs more money. Therefore, predictions are made about requirements and the system is designed to meet those requirements. Any bigger, and it costs more - sometimes a lot more.

Recently, I was in charge of a coal handling system upgrade, and we were faced with the same issue. Many people wanted to know why we didn’t install larger conveyors, etc.

Another issue lies in accuracy of predicting coal output requirements. Some people were saying that the mining boom was going to continue; others were predicting an end.

Lastly, there is the issue of handling peaks in capacity. Sydney’s hospitality industry faced this issue during the 2000 Olympics. What happened after the Games finished? There were a whole lot of vacant motel rooms.

If you have sufficient capacity to handle any possible requirement, most of the time there will be idle capacity. Again, this costs money.

Sometimes, it is hard to make decisions about required capacity, and we are seeing the results of reaching capacity limits with our infrastructure due to the mining boom - just like we did with motels during the Sydney Olympics.

Calvin Close
Managing Director
Australia’s Mining Reference