Tag Archives: Isaac Plains

BHP to sell stakes in Poitrel and South Walker Creek met coal mines to Stanmore

BHP has signed a Share Sale and Purchase Agreement to divest its 80% interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, Australia, to Stanmore SMC Holdings Pty Ltd.

Stanmore SMC, a wholly owned subsidiary of Stanmore Resources Limited, has agreed to acquire 100% of the shares in Dampier Coal (Queensland) Pty Ltd from BHP Minerals Pty Ltd, the subsidiary which holds BHP’s interest in BMC, for cash consideration of up to $1.35 billion. The purchase price comprises $1.1 billion cash on completion, $100 million in cash six months after completion and the potential for up to $150 million in a price-linked earnout payable in the 2024 calendar year.

The sale is subject to the satisfaction of certain conditions, including customary competition and regulatory approvals. This includes approval from the Foreign Investment Review Board. Completion is expected to occur in the middle of the 2022 calendar year.

The BMC portfolio includes significant infrastructure including an 8.4 Mt/y coal handling and processing plant (CHPP) at South Walker Creek (pictured), the 9 Mt/y Red Mountain CHPP (fully owned by BMC) in close proximity to the Poitrel operations, two rail loops and train loading facilities, two Marion 8050 draglines, and a fleet of excavators, dozers and haul trucks, Stanmore said.

BHP Group Limited operates BMC as part of an 80:20 joint venture with Mitsui.

BHP intends to continue operating BMC until completion and work closely with Stanmore Resources to ensure a successful transition of ownership. It will provide certain transitional services to Stanmore Resources for a short period of time after completion.

BHP’s President Minerals Australia, Edgar Basto, said: “This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community. As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions.

“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years and we are grateful for their contribution to BHP.

“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities. Stanmore Resources share our focus on safety performance and culture and support Australia’s commitments under the Paris Agreement.”

Stanmore Resources’ existing assets in Queensland’s Bowen Basin include the Isaac Plains Mine and processing facilities, the adjoining Isaac Plains East and Isaac Downs mining areas and the Isaac Plains Underground Project.

BHP, meanwhile, said the review process for its New South Wales Energy Coal is progressing, in line with the two-year timeframe announced in August 2020.

Blue Energy investigates potential to power Isaac Plains fleet on hydrogen

Blue Energy Ltd says it has executed a non-binding memorandum of understanding (MoU) with Stanmore Resources Ltd that could see mine gas converted to hydrogen to power Stanmore’s Isaac Plains Complex equipment fleet.

The latest MoU relates to future pilot production activities at Stanmore’s ATP 814 tenement in the Bowen Basin of Queensland, Australia, but it builds on a previously announced non-binding MoU for the commercialisation of mine gas from Stanmore’s proposed underground operation adjacent to ATP814.

The gas used by Blue for conversion to hydrogen will be pilot gas which would otherwise be flared, and this trial project will reduce greenhouse gas emissions from Blue’s activities and also reduce diesel fuel usage by Stanmore which, in turn, reduces the CO2 produced by the combustion cycle of their fleet of vehicles, Blue said. The company is currently investigating off-the-shelf modular hydrogen generation equipment that is portable and able to be installed either centrally or at the well head, with the hydrogen generated transported in purpose-built cylinders to Stanmore’s Isaac Plains Complex site for use in their vehicle fleet.

Blue Energy’s Managing Director, John Phillips, said: “Being able to avoid flaring of pilot gas production by converting it to hydrogen is a step forward in reducing emissions prior to gas developments, and, in this case, has the added bonus of also lowering emissions from neighbouring mining operations.”

Blue is in the process of establishing technology partners for this hydrogen trial and, now with a foundation hydrogen offtaker secured, is confident the use of blue hydrogen from its pre-development activities is a positive step toward lowering the greenhouse gas emission footprint of the Bowen Basin coal mining precinct.

NRW’s Golding to operate new trucks, excavators at Isaac Plains East coal mine

NRW Holdings’ wholly-owned subsidiary, Golding Contractors, has reached agreement with Stanmore Coal to increase overburden removal capacity at its Isaac Plains East mine in Queensland, Australia, with the addition of a third truck and excavator fleet.

During 2019, the mine has continued to increase production and the new contract mine plan is seeking to sustain current coal production volumes of around 3 Mt/y of run of mine (ROM) material.

The two companies, in November, agreed to extended the contract mining services contract for at least another five years.

The third fleet will commence operations in August, with Golding supplying an additional Hitachi EX3600 excavator, five EH3500 Hitachi trucks and the remainder of the ancillary fleet, the majority of which will be mobilised from NRW’s Middlemount project, NRW said, adding that the five EH3500 trucks will be replaced by 5 EH4000 Hitachi trucks as they become available from the Middlemount project.

Stanmore Coal has also entered into binding agreements to acquire a 600-t Caterpillar 6060 excavator for the Isaac Plains East mine from Cat dealer Hasting Deering. This will be commissioned later in the year, NRW said, with Golding operating and maintaining the machine. It will either move prime overburden in front of the dragline or overburden in dedicated excavator and truck pits uncovering coal, according to Stanmore Coal.

Stanmore said: “Once the environmental approvals are granted for the Isaac Downs project, it is planned that the excavator will transfer to Isaac Downs to commence the box-cut operation to establish the mine. Operations at Isaac Plains East will continue in parallel with the development of the Isaac Downs project.”

The total investment is expected to be A$13 million, which includes additional workshop facilities and associated equipment expenditure at Isaac Plains to support efficient maintenance practices, the company said.

The value of the increase in scope of the contract adds approximately A$450 million ($315 million) to the existing five-year contract Stanmore and Golding have in place, NRW said. The total contract sum is estimated to be around A$950 million at the current mine production levels.

NRW CEO and Managing Director, Jules Pemberton, said: “This amendment is built on the back of a productive relationship and a positive transition for both Stanmore and Golding to the Isaac Plains East operations. We expect our capital commitment to be very low at around A$10 million as we are able to utilise fleet secured through an agreed early release from the Middlemount Coal contract.

“The Middlemount contract is not formally due for completion until the end of the 2020 financial year, however we will be able to release certain fleet prior to that date and some fleet will also likely remain on site beyond the formal contract end date. As the Middlemount project is a maintained dry hire contract, the release of our fleet will enable us to re commit these assets to existing and new full-service contract mining opportunities in line with our mining divisions delivery model.”

Consultant Measured Group updated the Isaac Plains reserve in August 2018 with current estimates supporting over 10 years of open-pit mining at planned mining rates of 1.2-1.8 Mt/y of product coal. Total open-pit reserves as at August 2018 were 14.9 Mt (run of mine).

The contract amendment is tied to Stanmore Coal’s decision to defer the Isaac Plains Underground project and prioritise its Isaac Downs project, which has higher margin ROM coal to feed the coal handling preparation plant, Stanmore Coal says.

Stanmore Coal said the Isaac Plains Underground bankable feasibility study had been completed and confirmed a positive business case for the new underground mine with potential production ramping up to an average of 1.2 Mt/y of saleable coal from year two of the production plan.

“The quantum of product tonnes forecast for the underground combined with the open-cut sources exceeds the current CHPP and contracted port capacity. Stanmore Coal is prioritising its highest margin ROM coal at Isaac Plains East and Isaac Downs project, to maximise returns to shareholders. Accordingly, the Isaac Plains Underground project will be deferred until additional port and CHPP capacity are secured or until mining at the Isaac Downs project is largely complete, subject to prevailing business conditions.”

Stanmore Coal and Golding agree on flexible extension to Isaac Plains East contract

Stanmore Coal has extended its contract with NRW Holdings subsidiary Golding Contractors at the Isaac Plaints East mine in Queensland, Australia.

Golding will carry out contract mining services for at least another five years as part of the circa-A$500 million ($364 million) contract. This will see the project term extended to June 2024.

NRW CEO and Managing Director Jules Pemberton said of the contract award: “The relationship, which commenced in 2015, has been a productive and successful partnership and we look forward to supporting Stanmore’s growth ambitions as they further develop their extensive resource base over the coming years.”

Golding will deploy new equipment with a capital cost of circa A$40 million to support the contract extension, it said.

Stanmore said the contract had a flexible structure that allowed the company to vary production to meet market conditions within certain parameters. Within the agreement, is an option to owner/operate the coal handling preparation plant at the site as the future production profile changes.

Consultant Measured Group updated the Isaac Plains reserve in August 2018 with current estimates supporting over 10 years of open-pit mining at planned mining rates of 1.2-1.8 Mt/y of product coal. Total open-pit reserves as at August 2018 were 14.9 Mt (run of mine).