What I saw and experienced during my visit to underground mines in the USA was something that I will never forget. What amazed me was the stark contrasts in mining practices in Australia vs the USA.

I thought that I would share some of those experiences for those that have not had the privilege of seeing both USA and Australian underground mines.

In Australia, the use of diesel engines in underground mines is widespread. In the USA, there are some states that ban them underground – for safety reasons.

Yet, there are some things that are allowed in USA mines that Australian mine workers would not believe.

During a visit to a Pennsylvanian longwall mine, the longwall superintendent was showing me the underground workings plan for their upcoming longwall move. He was showing me where they located all the equipment. As I looked at the plan, I was shocked to see Oxy/Acetelene shown in a cut-through. When I asked him, he told me that they always use Oxy/Acetylene underground to assist in longwall moves. It was common practice. When I told him that we don’t use it underground, he asked, “how else do you cut things that are stuck?”

A few days later, I was driving to a mine in West Virginia. I got off the Interstate, following the directions I was given. I was told that the mine was 12 miles along this road that ran beside a river. Try as I might, I could not locate the mine. Finally, I decided to try driving up to a property up on a hill that was behind a barb wire fence. To my surprise, that WAS the mine. There was a small sign tied to the fence with the mine’s name.

I was invited to go underground at the mine. I was taken underground where we got on the trolley-wire lomotives to go to a development panel. I was amazed at the arcing and sparking of the trolley wire system. Yet, later I was told that regulations don’t allow diesel engines underground due to safety reasons.

When I arrived at the development panel, I went into the crib room. I was shocked to see 110v extension leads with incandescent lights. The lights were the same type that your local garage uses – the type that have the plastic cages around one side of the light. When the bulb blows, simply change the bulb, right?

Another thing that amazed me was the work management philosophy.  In USA mines, if they need people to work overtime on Saturday, they simply declare it a work day and all employees are required to attend work for the day. If they don’t attend, they are considered absent just like any standard work day for them.

On my way back to Australia, I began to realise why the American mining company that I worked for in Australia was struggling with its industrial relations. They were simply managing workers the way they did in the USA.

Having lived and worked in both the USA and Australia, I understand how important it is to understand and adapt to local practices when doing business internationally.

This cut represents a $5 billion cut in export earnings for Australia.

You know that times are really not so good for the Australian mining industry when companies can take that sort of cut and be convinced that this is a good result for them.

When you look at the spot price hovering around US$60 per tonne, you realise that the companies might be right in their enthusiasm.

Although down 40% from last year, this year’s price will still be the second highest price paid by the Japanese companies. It is also still far higher than the contracted price just 2 years ago.

The slightly better that expected thermal coal prices being negotiated have given hope that the coking coal prices will not be hit as hard as previously expected.

Our iron ore producers are expecting a 30% cut in prices from the current US$100 per tonne.

Calvin Close
Australian Mining Reference

The construction of the mine will create around 400 new jobs, with an expected 300 employees required for the ongoing operation of the site.

A further 700 employment opportunities will be created indirectly as a result of the development.

The Mangoola Coal mine will produce up to 10.5 million tonnes per year of run of mine ROM of both export and domestic quality thermal coal with an expected mine life of 18 years.

Mangoola Coal will generate over AUD35 million ($33 million) per annum for the NSW State Government through coal royalties and provide significant support to local infrastructure, employment and training projects through a Memorandum of Understanding with Muswellbrook Shire Council.

Peter Freyberg, Xstrata Coal Chief Executive, stated that, “Xstrata Coal is the largest producer of export coal in New South Wales, with a proven history of successful project development. We have the technical skills, experience and senior management in place to deliver projects on time and on budget, as demonstrated by the recent completion of our Liddell and Glendell open cut projects.”

At each stage of the Mangoola Coal project, Xstrata Coal will implement detailed environmental management processes to address energy conservation, air quality, noise and vibration, water resources, and any potential impacts to flora and fauna.

Mangoola Coal will produce coal for both the export and domestic markets in a 80:20 ratio over the life of the mine. An agreement for the first 12 years of domestic production is in place with Macquarie Generation (Bayswater and Liddell power stations). Export output will range between 6 million tonnes and 7 million tonnes per annum. All product coal will be transported by rail from the mine site to either Macquarie Generation or the port of Newcastle.

Major construction works will commence upon the issuance of the mining lease. Development consents and other approvals have been received.

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 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)

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:

[youtube RciA_IxnYJc]
(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:

[youtube S3l0NKJC054]

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