Tag Archives: coking coal

South32 sells Illawarra Metallurgical Coal to entity owned by GEAR and M Resources

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South32 has entered into a binding agreement to sell Illawarra Metallurgical Coal to an entity owned by Golden Energy and Resources Pte Ltd (GEAR) and M Resources Pty Ltd for upfront and deferred cash consideration of $1.3 billion plus contingent price-linked consideration of up to $350 million.

The sale is expected to complete in the first half of South32’s 2025 financial year, subject to the satisfaction of certain conditions.

“This transaction will realise significant value for our shareholders and is consistent with our strategy to reshape our portfolio toward commodities critical in the transition to a low-carbon future,” Graham Kerr, South32 Chief Executive Officer, said. “It will streamline our portfolio, strengthen our balance sheet and unlock capital to invest in our high-quality development projects in copper and zinc. The transaction will also simplify our business and reduce our capital intensity.”

Illawarra Metallurgical Coal produces high-quality metallurgical coal, a key ingredient in the in the production of steel, which will be required in the steelmaking process until low-carbon steel becomes economically viable on a commercial scale.

Illawarra Metallurgical Coal has underground mines at Appin and Dendrobium, which produce premium-quality, hard coking coal for steelmaking. In South32’s 2023 financial year, it produced almost 5.5 Mt of this product.

GEAR and M Resources are established participants in the Australian metallurgical coal industry, with a strong commitment to environmental and safety standards, who are well positioned to continue Illawarra Metallurgical Coal’s contribution to the local steel industry and the Illawarra and Macarthur regions, according to South32.

“Our focus remains the safe and reliable operation of Illawarra Metallurgical Coal,” Kerr said. “Over the coming months we will work with the buyer, our workforce, the local community, government, customers and suppliers to support a successful transition of ownership.”

NRW Holdings banks Olive Downs, Mt Webber work

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NRW Holdings has added more work to its roster with confirmation of projects from the Olive Downs coking coal project in Queensland and the Mt Webber iron ore mine in Western Australia.

Golding Contractors, a subsidiary of NRW, has secured the rail civil construction contract for the Pembroke-owned Olive Downs project.

The civil works to be undertaken include a new 19-km rail loop for the new steelmaking coal project, including all earthworks, drainage culverts and construction of two new rail bridges. The scope also includes importing capping material up to underside of ballast.

The contract is valued at circa-A$52 million ($35 million) and is expected to have a duration of 14 months. In addition, Golding has also been awarded circa-A$15 million of bulk earthworks, drainage and roadworks relating to the new coal handling processing plant at Olive Downs.

Olive Downs is being developed to produce up to a forecast 15 Mt/y of saleable coal over its 79-year mine life.

NRW has also received an executed contract extension from Atlas Iron Pty Ltd for the mining and crushing services works at Mt Webber.

Some 220 km south of Port Hedland in the Pilbara Western Australia, Mt Webber has two mining areas in Fender and Dalton, which produces a high-grade lump and fines product that is used in the Atlas Iron supply chain.

The works to be continued include load & haul, drill & blast and run-of-mine re-handling and crushing and screening. The drill & blast and crushing components are to be undertaken by NRW’s wholly owned subsidiaries, Action Drill & Blast Pty Ltd and Primero Pty Ltd. Primero has designed, constructed and will operate a new PGX-1000 crushing plant to allow crushing and screening of up to 1,000 t/h.

The anticipated value of the contract extension is circa-A$60 million over a duration commencing July 2022 and expected to be completed by the end of 2024 with a project workforce averaging around 80 personnel.

Rio Tinto and BlueScope to test clean hydrogen use at Port Kembla Steelworks

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Rio Tinto says it and BlueScope are to work together on exploring low-carbon steelmaking pathways using Pilbara iron ores, including the use of clean hydrogen to replace coking coal at BlueScope’s Port Kembla Steelworks, in Australia.

The two companies have signed a Memorandum of Understanding (MoU) to research and design low-emissions processes for the steel value chain, including iron ore processing, iron and steelmaking and related technologies.

Rio Tinto and BlueScope will prioritise studying the use of green hydrogen at the Port Kembla Steelworks to directly reduce Pilbara iron ores into a product that could then be processed in an electric melter to produce metallic iron suitable to be finished into steel, it said.

The MoU expands the partnership between the two companies, who were already jointly studying technology to reduce carbon emissions from existing iron and steelmaking processes. It will also allow more projects to be added as technologies mature, according to Rio.

Rio Tinto Iron Ore Chief Executive, Simon Trott, said: “This partnership will benefit from BlueScope’s experience and know-how in using electric melters at its New Zealand steelworks, Rio Tinto’s experience in the Atlantic direct reduction market and the R&D capability and the experience of both Rio Tinto and BlueScope in iron ore processing.

“It is early days, but given both BlueScope and Rio Tinto are committed to net zero carbon emissions by 2050, we realise we need to investigate multiple pathways and strike partnerships across the steel value chain.”

BlueScope Chief Executive, Mark Vassella, said: “We are pleased to be working with Rio Tinto, who supply the majority of iron ore to our Port Kembla plant. It’s a natural fit for us both and a meaningful opportunity for Australian steelmaking and mining to explore ways of contributing to emissions reduction targets.

“This is an important program – one which will need broad support from governments, regulators, customers and suppliers. At a time when there is much talk and expectation about climate, this is an example of two significant Australian businesses getting on with real action. We are putting our dollars and our people right on the front line of addressing climate change.”

The first phase of the collaboration will be to determine the scale of a pilot plant to be based at the Port Kembla Steelworks, consisting of a hydrogen electrolyser, direct reduction process and melter.

At an investor seminar last week, Rio said it was focused on studying three potential pathways towards net neutral steelmaking; using sustainable biomass with Pilbara iron ore to replace coking coal in the iron and steelmaking process; using hydrogen-based hot-briquetted iron with high-grade ores in Canada; and using hydrogen direct reduced iron with a melter for Pilbara ores.

This MOU aligns with the last potential pathway and shows Rio Tinto’s commitment to each of them, the miner said.

At the same investor seminar, it announced new targets of reducing its Scope 1 & 2 carbon emissions by 50% by 2030, more than tripling its previous target, and a 15% reduction in emissions by 2025, five years earlier than previously. These targets are supported by around $7.5 billion of direct investments to lower emissions between 2022 and 2030.

Mastermyne to take on ‘Whole of Mine Operations’ at Sojitz’s Gregory Crinum

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Mastermyne Group says it has been awarded the Mining Services Contract to operate the Gregory Crinum underground mine in Queensland, Australia, owned by Sojitz Blue Pty Ltd.

The contract term is seven years, including re-establishment, with the value coming in at A$600-660 million ($464-510 million), the company reported.

During 2020, Sojitz appointed Mastermyne to undertake a feasibility study focusing on the development of a high productivity bord and pillar mining operation. In parallel, Mastermyne was also engaged as the Mine Operator to undertake the re-entry process. The underground mining area was successfully re-entered in late October 2020, with no issues encountered, according to the contractor. Mastermyne continued as the Mine Operator while Sojitz finalised internal approvals.

The re-establishment project scope includes the re-establishment of the underground infrastructure including conveyor systems, ventilation, associated mine services, remediation works and surface infrastructure, all of which is expected to take around six months. Following these works, the mine will immediately transition into production with a staged ramp up to three bord and pillar mining units.

The underground mine is expected to produce around 11 Mt run of mine over the life of the project, with mining production planned to commence later this year.

At full production, the underground mine is expected to employ 180 full-time personnel. Mastermyne will provide underground mining equipment from its current fleet, including three bord & pillar miners, multi bolters and shuttle cars along with a range of ancillary production equipment to support the operation. The contract is expected to deliver on average A$80-100 million of revenue per year once in full production, Mastermyne says.

“Initial funding for the project establishment will be a combination of Sojitz capital and Mastermyne capital with the company drawing on its strong cash position and available funding lines to finance the project,” Mastermyne said. “The company’s capital contribution will primarily fund the overhaul of the mining fleet and ancillary mining equipment, which will be recovered over the term of the contract.”

Mastermyne intends to retain ownership of its mining equipment throughout the project.

Mastermyne CEO, Tony Caruso, said: “The execution of our first Whole of Mine Operations contract is a major milestone for Mastermyne and is significant in transitioning the business into a commercial model that is not only complimentary to the existing contracting model, but will provide an even greater level of earnings certainty over the long term.”

Sojitz CEO, Cameron Vorias, said: “We are delighted to have Mastermyne as our highly regarded partner for this development and it will support our strategic plans for the growth of high quality hard coking coal from the area.”

Aspire signs up Sedgman for Ovoot coking coal project FEED study

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Aspire Mining Ltd has contracted Sedgman Pty Limited to prepare a Front End Engineering and Design (FEED) study on coal handling and preparation plant (CHPP) infrastructure to support commencement of operations at the Ovoot coking coal project (OCCP) in Mongolia.

Sedgman, a wholly owned subsidiary of CIMIC, is a leading provider of integrated minerals processing solutions with experience delivering processing solutions. It has provided technical input and various studies supporting the economics of the OCCP from discovery of the deposit in 2010.

The FEED study will be conducted in a phased approach, over a period of approximately five months. Stage 1 will comprise trade-off analyses to identify the most appropriate concepts and technologies, which will take approximately eight weeks. Stage 2 will then focus on the agreed path and will produce accurate estimates of capital and operating costs, and designs to enable tendering for construction. The work will be completed under a schedule of rates arrangement, with total cost of A$600,000 ($464,583) estimated, Aspire said.

The intended CHPP infrastructure to be investigated will be based on existing modular designs and will enable low impact processing of approximately 1.5 Mt/y of run-of-mine coal, with capability for later expansion, Aspire said. Important criteria for the design include low energy and water consumption, and stringent dust control.

Sedgman Managing Director, Grant Fraser, said: “Sedgman appreciated the opportunity to work with Aspire and is focused on delivering value through progressing an innovative solution for the project.

“This study is a great opportunity to work with one of our longstanding clients to support the future development of the OCCP.”

Mastermyne’s Aquila coking coal contract extended by Anglo

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Anglo American has extended the stay of Mastermyne Group at its Aquila coking coal project in Queensland, Australia, with the ASX-listed contractor set to continue development of the underground mine for at least the next 12 months.

Mastermyne has been engaged since August 2019 to undertake roadway development in the mains and gate roads, and all outbye related services for the establishment of the new longwall operation at Aquila.

The contract variation will extend the current contract to March 2022 and includes the operation of an additional roadway development unit.

Mastermyne currently employs 178 full-time personnel under the contract, with a further increase of around 60 full-time personnel required for the operation of the additional roadway development unit. Up to half of the personnel for this third development unit at Aquila mine will be relocated from Anglo’s Moranbah North coal mine (currently suspended), following the completion of planned activities. Mobilisation of the additional workforce at Aquila will be completed by March 2021.

The contractor says it continues to supply development equipment from its fleet, including a continuous miner and ancillary development equipment for the project.

Total revenue generated from the variation and extension to the mining contract is expected to be approximately A$60 million ($47 million).

Mastermyne CEO, Tony Caruso, said “We have been working to deliver major underground infrastructure and roadways safely and efficiently, and we look forward to continuing our work with Anglo American to deliver their new longwall project, producing premium high-quality hard coking coal.”

Anglo’s 70%-owned Aquila project will extend the life of its existing Capcoal underground operations by six years and continue to use the associated infrastructure at the Capcoal complex as its nearby Grasstree mine approaches end of life, Anglo says. The project is scheduled for first longwall production of coking coal in early 2022.

Mechel’s Southern Kuzbass Coal Company launches new longwall

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Mechel, one of Russia’s leading mining and steel companies, has launched a new longwall at the Southern Kuzbass Coal Company-owned V.I. Lenina underground mine in Russia.

Investment in the new longwall totalled around RUB470 million ($6.4 million), the company said.

The new longwall #0-16-10’s reserves are estimated at 435,000 t, with the average seam height coming in at 1.8 m. The longwall is nearly 200 m long with an extraction panel of 720 m.

The longwall is equipped with a 134-section powered support system, a cutter-loader, as well as a crusher, longwall conveyor and belt conveyor, Mechel said. All the longwall’s equipment is compliant with modern industrial and labour safety requirements, it added.

“V.I. Lenina Underground Mine’s reserves consist of coking coal with excellent quality characteristics, which is high in demand with coke producers,” Mechel Mining Management’s Chief Executive Officer, Igor Khafizov, said. “Southern Kuzbass Coal Company will be working this new longwall for eight months. The concentrate we will produce from its coal will be marketed both domestically and internationally.”

Cokal secures HPU as contract miner for BBM coking coal project

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Cokal has entered into a binding agreement with PT Harmoni Panca Utama (HPU) to provide contract mining services for development and mining of the Bumi Barito Mineral (BBM) coking coal project in Indonesia.

The ASX-listed company named HPU as the preferred tenderer to provide contract mining services for the project back in November.

The five-year agreement represents a significant milestone in Cokal’s strategy for the near-term development of BBM into an operating coal mine for minimal upfront capital costs, producing premium export quality coking and pulverised coal injection coal (PCI) products, the company said.

HPU will carry out contract mining of overburden and associated services, including project management, mine planning, surveying, supervision, site security, materials, equipment, equipment maintenance, labour, transportation, medical services, consumables and site infrastructure, Cokal said.

Use of contract mining provides significant strategic and financial advantages for Cokal, with the costs of these services linked to international coking coal prices, the company said. This is aimed at protecting Cokal’s operating margin through the cycle.

Cokal says it is now endeavouring to commence development of BBM in an expedited timeframe and is working with HPU on the necessary operational and logistical matters.

BBM is in the Central Province of Kalimantan and is Cokal’s most advanced project. It has a mining lease area of 14,980 ha and a remit to produce premium coking coal and PCI products for the nearby Asia steel markets.

Queensland set to welcome Olive Downs project to coking coal ranks

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Queensland looks like adding a new coking coal mine to its ranks after the state government approved mining leases for Pembroke Resources’ Olive Downs project.

The granting of the leases follows approvals from the Department of Agriculture, Water and the Environment under the Environment Protection and Biodiversity Conservation Act in early 2020, and the grant of the Environmental Authority by the Queensland Government in 2019.

Pembroke Chairman and Chief Executive Officer, Barry Tudor, thanked Minister Anthony Lynham for the mining lease approvals, saying they were the final approval hurdle to commence the first 6 Mt/y stage of the project.

Olive Downs is expected to create over 1,000 new jobs in the region as the project is developed to produce up to a forecast 15 Mt/y of saleable coal over its 79-year mine life.

CIMIC Group companies Sedgman and CPB Contractors will carry out the design, procurement, construction and commissioning of the operation’s coal handling and preparation plant, which will have sufficient capacity to process the first phase of annual production of up to 6 Mt of run of mine coal from Olive Downs, according to Pembroke.

“We are extremely pleased to have been granted the mining leases, having consulted extensively with the local community over the past four years,” Tudor said. “In addition to our commitment to the environment, we have focused on creating local jobs and proactively engaged with all stakeholders, including establishing a strong relationship with Barada Barna as the traditional owners of the land, with whom we have an Indigenous Land Use Agreement and Cultural Heritage Management Plan in place.”

With some 838 Mt of JORC resources and 514 Mt of open-cut JORC reserves of coking coal, Olive Downs is widely acknowledged as a potential Tier One steelmaking coal project, Pembroke says. Strategically positioned in the Bowen Basin and with access to infrastructure, the project will supply steelmaking coal to markets globally and continues to attract strong interest within the industry across Asia, including Japan, Korea and China.

Olive Downs has already assembled the key elements required to commence construction following the grant of the mining leases, including securing access to power, water, rail and port, even as finance and offtake partners are finalised.

Olive Downs is 100% owned by Pembroke, an Australia-based specialist steelmaking coal company and is backed by its major shareholder, Denham Capital, a leading global energy and resources private equity firm.

Anglo American to test pressure sensor tech following Grosvenor methane ignition incident

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A trial of pressure sensors to remove power from the longwall face and the expedition of longwall automation are two of the areas Anglo American is hoping will improve safety at its underground coal mines in Australia, following a methane ignition incident that occurred at its Grosvenor mine, in Queensland, on May 6.

The company began to brief its Queensland-based workforce on the progress of its expert investigation into the methane ignition last week, with Tyler Mitchelson, CEO of Anglo American’s Metallurgical Coal business, saying the company’s focus continues to be on providing ongoing support for the five personnel injured during the incident, four of whom have now been released from hospital, while the fifth remains in a stable condition.

While investigations were progressing and may take some time to formally conclude, Mitchelson said the company would continue to review controls in place across its underground mines as any technical or other findings become available from the investigations.

“We know from our expert analysis that there was a significant and unusual overpressure event on May 6, where a large amount of methane was released into the longwall area, and, seconds later, a brief ignition occurred,” he said. “At this stage, the ignition source has not been conclusively determined and testing continues.

“We also know that in the hours leading up to the incident, there were no non-compliant methane readings in the longwall area.”

Since 2016, the company has invested around A$230 million ($161 million) on gas drainage and gas management activities at the Grosvenor Mine, according to Mitchelson.

“Despite this investment, and extensive controls in place to prevent an underground ignition of methane, we need to further improve our controls to respond to the specific combination of factors of an unusual and large overpressure event in the vicinity of the longwall with a potential ignition source,” he said.

“By drawing on technical learnings and information as it becomes available from the investigations, we have begun a review of our site methane management controls, which includes assessing additional technology options and applying any further improvements across our underground mines.”

As a first step, the company is beginning a pilot study at its Moranbah North mine to assess the use of pressure sensors to remove power from the longwall face as an additional control if a significant overpressure event occurs, he said.

“Whilst pressure sensors are already in use today, across the industry they have not been integrated for this particular purpose,” Mitchelson explained. “Learnings from the pilot will be incorporated across our underground mines and shared with industry.”

Mitchelson said the company has already invested “considerably” in progressing the automation of its longwall equipment, and “expediting this work will also be part of the solution to reducing risks in underground mining”.

Among more recent elements of longwall automation the company has pursued is the ability to operate its longwall shear from an above-ground remote operating centre at the Grosvenor mine.

The company added: “As the largest underground coal miner in Queensland, Anglo American has been at the forefront of technical innovation and has invested significantly in technology to improve safety in its mines, including additional methane detection equipment above and beyond regulatory requirements, digitisation to improve underground communication, and automation of equipment.

“We will continue to prioritise this work.”

Mitchelson said it was unacceptable five personnel were seriously injured on May 6 and that the company would ensure all relevant learnings from investigations underway and the Board of Inquiry are incorporated across its business.

“We continue to support our injured colleagues and their families as they continue their recovery,” he said.

He reiterated that safety comes first, and mining would not resume until it was safe to do so.

While mining activities have been suspended, the Grosvenor workforce has continued to be supported on full pay since the incident to enable the company to work through its future plans, step by step.