$100 mill profit 2019 coal boom
Anglo considers bigger coking coal boost
Jun 5, 2019 — 11.27am
Anglo American has raised its ambitions for boosting coking coal exports from Australia, with studies underway into a bigger expansion of a crucial piece of Queensland infrastructure and the potential to introduce autonomous trucks.
Amid extremely high prices for the steel-making ingredient, Anglo is studying a bigger expansion of a coal preparation plant that services its best two coking coal mines; Moranbah North and Grosvenor in the heart of the Bowen Basin.
'It is not a new mine, (but) it is basically creating a new mine out of two existing mines through productivity improvements,' Tyler Mitchelson says. Photo: Nic Walker
Announced in June 2018, studies into the expansion initially focused on increasing throughput by 25 per cent, but Anglo's chief executive of metallurgical coal, Tyler Mitchelson, said the studies now were looking at the potential to raise production by as much as 40 per cent.
''Moranbah North and Grosvenor both feed the same preparation plant, we are looking at a major expansion of that plant because we can see the capability in both of these underground mines to produce much more than they are right now,'' he told The Australian Financial Review.
''It is not a new mine, (but) it is basically creating a new mine out of two existing mines through productivity improvements.''
The exact cost of the expansion won't be known until the study is complete, but Mr Mitchelson said it would be "less than a billion dollars".
"We are just in the process of doing the prefeasibility study, our intent is we would go for execution approval late next year or early 2021 and that is looking at possibly expanding that plant by 30 per cent to 40 per cent capacity," he said.
Moranbah North produced 6.76 million tonnes in 2018 while Grosvenor produced 3.76 million tonnes.
Based on those numbers, the expanded preparation plant could allow Anglo to sell an extra 4 million tonnes of coking coal per year.
Prices for premium hard coking coal from Queensland were extremely high at $US207 per tonne last week, and at such prices an extra 4 million tonnes would be worth about $US828 million in revenue.
Anglo produced 21.8 million tonnes of coking coal from its Australian mines in 2018, up from 19.6 million tonnes in 2017.
The company expects to sell between 22 million and 24 million tonnes of coking coal in 2019, with about 86 per cent of those volumes being premium hard coking coal and the remainder being semi-soft or pulverised coal injection coal.
Anglo considered selling Moranbah North and Grosvenor at the bottom of the coal market in 2016 as the company struggled with a debt crisis.
BHP was among the suitors in a sale process that was disrupted by an extraordinary rally in coking coal prices in the latter months of 2016.
Anglo decided to keep the mines and Mr Mitchelson said the preparation plant study was an example of the miner committing to its Australian business.
''Over the next five years we are really intending to reinvest in the business and grow the business,'' he said.
Anglo could also soon be investing in a new fleet of autonomous trucks for its Dawson coal mine in Queensland, with Mr Mitchelson saying a separate study was underway into that option.
Dawson has 23 human-operated trucks that will soon be due for either replacement or refurbishment, and Anglo is expected to make a decision between those two options later this year.
While similar studies at rival Australian miners have tended to resolve that investment in autonomous trucks is the preferred option, Mr Mitchelson said the outcome of the study was not certain.
"It is not a slam-dunk," he said.
Mr Mitchelson said the Dawson case was complicated by the fact autonomous trucks would need to interact with human-operated vehicles and equipment if they were adopted; unlike some other mines that have been built with full autonomy from the outset.
Mr Mitchelson said the cost of adopting autonomous fleet, and the impact on job numbers at the mine would not be known until the study was complete.
The Dawson study is the latest example of autonomous vehicles becoming the norm in big Australian mines, with Rio Tinto, BHP, Fortescue and Roy Hill using autonomous vehicles on some of their iron ore mines in Western Australia.
Rio is also using autonomous trains in WA, while BHP is currently studying the economics of automating the entire fleet within the Minerals Australia division.
The Bowen Basin was one of the regions of North Queensland that swung strongly toward the Coalition at last month's federal election, and Mr Mitchelson said it was good to see mining's impact on the Australian economy being acknowledged in the wash up from the election.
''Looking at the election results I think it is great the resource industry was recognised and I think it is great we are seeing some support for the sector again,'' he said.
''For us in particular in Anglo American we want to make these investments, we want to grow the business in Australia so having a very supportive government with supportive legislation is critical for us to be able to succeed and be able to grow the business they way we want to".
More coal mines on map for Queensland as government calls for tenders
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By Felicity Caldwell
August 2, 2019 — 11.13am
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Just weeks after granting Adani the environmental approvals it needed to start work on its Galilee Basin mine, the Palaszczuk Labor government is opening up more of the state for coal mining projects.
Mines Minister Anthony Lynham announced more land in Queensland's coal-rich Bowen Basin would be opened for exploration.
Adani-Adani protesters outside engineering construction company GHD in Brisbane on August 1. The Carmichael coal mine has become a lightning rod for the anti-coal movement.
Adani-Adani protesters outside engineering construction company GHD in Brisbane on August 1. The Carmichael coal mine has become a lightning rod for the anti-coal movement.CREDIT:AAP IMAGE/ DAN PELED
On Friday, the Queensland government opened tenders for five areas with high potential for thermal and coking coal.
"The coal industry supports 36,000 jobs across the state and this is an investment in future projects and jobs," Dr Lynham said.
"Exploration is the lifeblood of the resources sector, and the thousands of jobs and business opportunities it provides, particularly in regional Queensland."
The five areas, made up of 147 sub-blocks, are:
One 60 square kilometre area north-east of Moranbah with potential for metallurgical coal
Three areas of 6km² each east of Blackwater providing opportunities for thermal coal and pulverised coal injection coal
One 380km² area south-east of Emerald with potential for thermal coal
Coking coal - or metallurgical coal - is a vital ingredient in the steel-making process, while thermal coal is mostly used for power generation.
Dr Lynham said metallurgical and pulverised coal injection coals were used for building homes, wind turbines and parts for the electric vehicle industry.
"The world needs our metallurgical coal as part of the transition to renewables," he said.
The new blocks will have access to the Bowen Basin's existing rail and port infrastructure at Hay Point and Gladstone to get the coal from pit to port.
Mines Minister Anthony Lynham has announced new parcels of land for coal exploration in the Bowen Basin.
Mines Minister Anthony Lynham has announced new parcels of land for coal exploration in the Bowen Basin.CREDIT:AAP IMAGE/ JONO SEARLE
The bidding companies have to offer cash with their bid, with preferred tenderers required to meet environmental, native title and land access requirements before on-ground exploration can start.
It comes after Premier Annastacia Palaszczuk said voters were "fed up" with the time it was taking her government to evaluate the Adani coal mine, and so was she, announcing time frames for approvals on May 24.
That followed federal Labor's bruising loss at the May 18 election, with the party snagging only six out of 30 Queensland seats, a net loss of two.
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Seats in central Queensland closest to the Galilee Basin and the proposed Adani mine swung towards the Coalition on a two-party preferred basis, boosted by minor party preferences.
Bob Brown's anti-Adani convoy, which drove through Queensland during the campaign, has also been blamed for annoying voters.
The Queensland Department of Environment and Science approved the groundwater management plan for the Adani mine on June 13, allowing work to begin.
Adani was the first of seven companies waiting for approval to begin mining in the Galilee Basin, a rich source of thermal coal.
The Adani approval sparked rolling protests, with activists shutting down the Brisbane CBD with marches and by gluing themselves to the road.
Queensland Resources Council chief executive Ian Macfarlane said the new tenders in the Bowen Basin were a vital step in ensuring the resources sector continued to benefit regional communities.
"The most recent unemployment figures showed Queensland's resources regions have unemployment rates that are lower than the state average of 6.1 per cent," he said.
"The release of five areas and 147 sub-blocks near Moranbah, Blackwater and Emerald with the potential for both metallurgical and thermal coal will help ensure Queensland continues to play to its strengths."
HIGHLIGHTS AND MILESTONES ACHIEVED – 2019 FINANCIAL YEAR
Maximise production and
• ROM Coal – increased by 35% to 3.4Mt
• Saleable Production – increased by 35% to 3.0Mt
• Coal Sales – increased by 59% to 3.0Mt
1 Record Coal Production
Maximise production and
3 Debt Reduction
Maximise production and
2 Record Financial Performance
• Operating EBITDA – increased by 245% to
• Operating Cash Flow (excluding interest) –
increased by 99% to $106.2M
• Reduced debt by US$25.6 million – representing
14.0% reduction in the debt’s face value
great annual report
TerraCom Limited (TerraCom or the Company) is pleased to announce the TerraCom Board of
Directors has declared an ordinary Maiden Dividend of 1 cent per fully paid ordinary share held. The
dividend is an interim dividend and will be unfranked.
The Board’s adopted dividend policy is to pay a minimum dividend of 1 cent per fully paid ordinary
share per 6 month reporting period.
This dividend represent an Annualised Dividend Yield1 of 4.7%.
The Company will be paying this dividend by direct credit only and therefore requests all shareholders
to review their bank account details ascribed to their security reference numbers.
The key milestone dates relevant to the dividend payment are as follows:
Record Date: Wednesday, 30 October 2019
Ex-Dividend Date: Tuesday, 29 October 2019
Dividend Payment Date: Wednesday, 13 November 2019
TerraCom Chairman Wal King stated:
“The Company has gone from strength to strength since acquiring Blair Athol only 2½ years ago and
the platform is set for the Company to continue to grow into a mid-tier coal producer.
The Board would like to thank its shareholders for supporting the Company over many years since
listing. The Company set a short-term goal to pay a maiden dividend during the 2019 calendar year,
and delivering on that goal is an excellent result for shareholders”.