Coal news and updates

BHP Billiton has defied the coal gloom and, with Tony Abbott’s help, officially opened its $US3.4 billion Caval Ridge coal mine in Queensland’s Bowen Basin.

 

Australia’s coal sector is struggling with low prices and tough market conditions and last week it was hit with a new tariff for imports into China, fuelling talk of more job cuts and mine closures.

 

BHP has not been immune to the downturn and only last month announced it was axing 700 jobs from its Queensland coal operations, which it said at the time would enable the company to reduce costs and remain viable for the long-term.

 

But today it celebrated the opening of a new mine, which was brought in ahead of schedule and under budget.

 

BHP coal president Dean Dalla Valle noted that the company had recently made some “difficult decisions” to ensure its coal operations remained sustainable.

 

“We are confident that if we maintain our productivity focus then we will continue to have a globally competitive business that will provide employment opportunities for generations to come,” he said.

 

The mine, part of the BHP Mitsubishi Alliance, created 500 new jobs. More than 30,000 people applied for around 950 roles at Caval Ridge and its sister mine Daunia.

 

The Caval Ridge workforce, which commutes from Cairns and Brisbane, includes 21 per cent females and three per cent indigenous workers. In addition, 43 per cent of employees are new to the industry.

 

The mine, which is the eighth BMA operation in the region, will initially produce up to 5.5 million tonnes per annum of metallurgical coal.

 

“Today’s opening of the Caval Ridge mine is a significant milestone for BHP Billiton,” Mr Dalla Valle said.

 

“The operation will produce metallurgical coal for the steel industry and has been constructed with the latest technology to be one of the most productive, sustainable and highly performing metallurgical coal mines in the world.”

 

Mr Dalla Valle recently outlined that the mining major plans to boost coking coal production through productivity gains. Any new expansion options, however, would need to compete with BHP’s oil, potash and copper growth plans.

 

The miner’s coking coal-dominated coal unit is coming to the end of a long expansion process approved during the boom that has contributed to depressed prices for the commodity used in steelmaking.

 

Of BHPs four “pillars” identified by chief executive Andrew Mackenzie (iron ore, coal, oil and gas, while copper and potash could prove to be a fifth), coal has been the only one to have no new expansion funding approved in recent years.

 

Mr Mackenzie has previously outlined that all projects would have to compete for BHP’s investment capital, which is capped at $US14bn a year, and that preferred projects will have a rate of return of more than 20 per cent.

 

In Queensland, coking coal expansion options include a second underground longwall at the Broadmeadow mine, the Wards Well underground longwall, expanding the Caval Ridge mine or even restarting, on a lower-cost basis, the Norwich Park mine closed last year because it was unprofitable.

 

 

Source: The Australian