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.

It has been an amazing couple of weeks in politics that included a change of Liberal Party leaderhip and the ETS defeat.

I wonder whether the Climategate scandal timing may have had something to do with it.

Regardless of whether climate change is real, I am all for reducing energy consumption. It simply makes sense to use our energy sources wisely. However, I believe that the proposed ETS would have unnecessarily caused job losses and other major economic consequences to the Australian economy.

I believe that there are better ways of reducing energy consumption.

One of my biggest problems with these type of schemes is that they penalise Australia, while our competitors benefit. Countries like China that are taking Australian jobs talk about reductions but do not make any real change. The result: Australia becomes even less competitive against these low labour cost countries.

What real alternatives are there?

Firstly, rather than just create subsidies to offset costs, I believe that any emissions tax should be used directly to improve energy efficiency. Use the money to figure out how to more efficiently mine coal, generate power, etc.

Secondly, make the scheme dependent on other countries also reducing emissions. This way, Australia can commit to emissions reduction while still remaining competitive.

It will be interesting to see how this all pans out next year when the government is supposed to tackle the issue again.

Calvin Close
Australian Mining Reference

We are offering for sale our complete suite of Australian mining web sites. These include the following sites:

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The AMMA surveyed over 100 mining companies and found that:

• 55% of companies were likely to cut staff
• a further 21% of companies said that cutting staff was a possibility
• 15% suggested that they were not likely to cut staff
• 9% said they were not sure

These figures come on the heels of the news that in the last quarter, over 10,000 job cuts have been made, according to the AMMA.

This is amazing given a prediction less than 12 months ago suggesting that an additional 86,000 mine staff would be needed.

Calvin Close
Australian Mining Reference

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 government has release the Mid-Year Economic and Fiscal Outlook (MYEFO) which predicts that Gross Domestic Product (GDP) and jobs growth are both expected to slow significantly. However, Treasury has assessed that a recession is not in prospect.
(See full story on Forbes)

Yes. Australia is being affected by the global financial crisis.

So what about the mining industry?

Many people believe that the mining boom has peaked. Actually, it seems more like there is a “wait and see” approach being taken by some mining companies. Many projects have been put “on hold” while the mining companies assess potential drops in resources demand. Production cuts have also been announced by several mining companies. This has meant that many companies have already cut staff.

The recent announcement of China’s Economic Stimulus plan has caused shares in major Australian mining companies to rise on Monday.

Despite the downturn, the Minerals Council of Australia (MCA) has maintained that demand from China will continue at high levels. They are still predicting significant increases in jobs over the next 12 years.

It will be interesting to watch proceedings over the next few months.

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.

• Free Business Information
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The idea behind this site is that many people would ask us questions about how to run or market their business.  We knew that there is a host of free information out there, so are compiling the best free information into one place.

We will continue to add to this site as information becomes available.

Let us know if there is something that you think that we should include on the Business Reference site.

The great thing about it is that the same system can also be used to transport workers to / from the mine, in many cases eliminating the need for expensive fly-in-fly-out (FIFO) transport.  The system can also be used to transport supplies to / from the mine.

Another major benefit for the mining industry is that this system can eliminate the need for expensive port loading infrastructure because the transport modules can load directly into ships.

This system is also an answer to some of the criticism received from the environmental movement.  The system can be installed with minimal earthworks and can cross sensitive environmental areas with minimal impact.  The system is also extremely fuel efficient.

The cost to install the system is about half the cost of installing a conventional railway line. If you combine the savings from line construction and eliminating the port requirements, the savings amount to hundreds of millions of dollars.  In some cases, this can mean the difference between proceeding or not proceeding with a new mine development.

Read more about the application to mining transport.

The same company has also developed a system for high speed passenger transport.

Imagine being able to travel from Sydney to Melbourne in less than 2 hours! Imagine doing it without all the hassles of airport check-ins and going through security.

Their inner city passenger transport solution will enable people to travel across the city at speeds of up to 110kph.  This type of system can be installed in just about any city because it is installed ABOVE the city.

For more information, go to the Alternate Transport website. The website has lots of images and even a few videos to watch.

Mike Sutherlin, Joy Global’s President and Chief Executive Officer said that the purchase of Continental would expand the range of products and services they can deliver to their customers, and was consistent with their strategy of adding related and highly synergised product lines. He added that Continental’s conveyor systems fit closely with their surface and underground and businesses, allowing Joy to leverage their strong global presence in both segments.

From other comments made, it appears that Joy is looking to further integrate their face mining systems with outbye conveyor systems in order to further improve system reliability.  If this truly happens, it would surely be welcomed by all longwall and development superintendents.

Let’s see how all this progresses.

Calvin Close
Managing Director
Australian Mining Reference

Further links:

Australian Mining Business Directory
 - Underground Coal Mining Equipment
 - Open Cut Mining Equipment
 - Hard Rock Mining Equipment
 - Conveyor Equipment