Queensland and New South Wales coal.
Since 1960, the industry has built upon a solid base of domestic demand, which itself has gone through significant growth.
The export-industry began with the supply of coking coal to the Japanese steel industry in the early 1960s, subsequently expanding to meet the needs of other Asian customers. This was followed by a rapid expansion of the export thermal trade on the back of the oil price rises and energy insecurity generated by the OPEC oil shocks of 1973 and 1979.
Despite the corrections brought about in coking coal in the early 1980s, and in both coking and thermal coal trade in 1986, all of which were energy price related, the industry has exhibited remarkably consistent growth over these 30 years.
During this period, the coal industry has become the leading export earner in Australia. The consistent and growing contribution of coal to export earnings, sourced in the most competitive business in the world, the international energy market, is all the more remarkable when contrasted with the uncertain and volatile contribution from Australia's other major export earners.
Further, that contribution has been made without any subsidy being asked for, or received from, the rest of the Australian economy; indeed coal has effectively been subsidising other sectors for much of the period, for example via excessive freight and port charges."
Australia is the largest coal exporter in the world with monthly exports averaging around 4 Mt of steaming coal and 5 Mt of metallurgical coal. Total steaming coal exports for the calendar year 1990 amounted to 49,497,000 t and metallurgical coal exports were 57,095,000 t, giving a total of 106,592,000 t. In the short term metallurgical coal exports are expected to maintain current levels, while steaming coal exports are expected to increase by about 7% to some 53 Mt.
Australian coal is, however, not a complete success story. As Mr. Dunlop points out, "the great failure of the Australian coal industry in recent years, apart from a few notable exceptions, has been the inability of its operations to achieve a satisfactory level of profitability". The average FOB values/t for the 1990 exports were $A49.32 for the steaming coal exports and $A55.86 for the metallurgical coal. At the beginning of this year the NSW (New South Wales) Task Force on Coal Development Strategies submitted its report in which it estimated that the average total FOB cost of coal to NSW producers was $A55.70. It also predicted annual NSW steaming coal exports would rise from the 1989 level of 24.7 Mt to between 37 and 42 Mt by 1994/95. Coking coal exports were forecast to remain around the 1989/90 level of 18 Mt/y. According to Mr. Leigh Clifford, head of CRA's energy division, 40% of NSW coal companies made a loss last year due to adverse exchange rates and high operating costs.
As Table 1 shows, the industry, in terms of hard or black coal, is dominated by NSW and Queensland (QLD), with minor production in Western Australia (WA) South Australia (SA) and Tasmania. Total hard coal production (raw) was 198,205,000 t in 1990, up some 4% on the 190,085,000 t produced in 1989. Victoria is a major brown coal producer with its output reaching 47,725,000 t in 1990, down slightly from 48,252,000 t in 1989.
Australia's position in the world coal market is constantly being challenged by South African and other competition, and South Africa now becomes an even greater threat as it re-emerges in the international community. Indeed, an important Japanese contact was recently lost to South Africa. Maintaining and improving its competitive supply position relative to the rest of the world is vitally important to the Australian industry and Mr. Dunlop is of the opinion that "in this regard we have been less successful than we often like to think". Looking specifically at NSW where his company operates and from where most Australian underground production derives, he cites overall NSW productivity having increased by around 70% between 1979 and 1990, but labour costs increased by some 190% over the same period. In contrast, over those years, U.S. productivity rose by about 120% while labour cost increases were kept below 70%. He feels that improvement in the mining process has been effective, but must continue. However, other sectors of the industry require urgent consideration, "a large proportion of our costs is tied up in areas under government control such as rail and port infrastructure, regulatory and institutional frameworks, etc. The same disciplines have to be applied in each of these areas, and whilst progress is now being made it has been painfully slow over the last decade".
There is an abundant economic coal resource in both NSW and QLD, with many new mines ready to be developed at such time as the supply/demand scenario is right. Many projects have been taken to the feasibility stage and just await suitable markets.
NSW's total resource base amounts to 80,056 Mt of coal (33,436 Mt measured and indicated, and 46,620 Mt assumed and inferred). Of this total, there are 15,339 Mt of opencut coal, of which 13,929 Mt are measured and indicated; 36,683 Mt of underground coal down to 300 m (13,723 Mt measured and indicated); and 28,034 Mt of underground coal at depths between 300 and 600 m below surface (5,784 Mt measured and indicated). In QLD total Permian and Mesozoic coal resources are 37,100 Mt in the measured and indicated categories. This total is made up of 8,892 Mt of measured opencut reserves (5,356 Mt indicated) and 8,354 Mt of measured underground coal (14,498 Mt indicated).
NSW's advanced projects
The 1989/90 NSW Coal yearbook listed 13 new and potential mines. One of these, Camberwell which is now producing, was covered in detail in MM July, pp20-25. As the map shows, all but two of these 13 projects are in the Singleton - N.W. District of the Hunter Valley, where there are already 21 operating mines. At this time prospects for new developments in NSW look better than those for QLD. This is because NSW has a better position in steaming coal, while QLD is strong in metallurgical coal, and it is generally accepted that in the immediate future markets for thermal coal will be better than those for metallurgical coal.
Under the Bulga/Saxonavale project, Saxonvale Coal, a wholly-owned subsidiary of Oakbridge Ltd., proposes to
Table 1. 1990 Australian black coal production ('000 t)
Quarter March June September December Black coal, raw Underground 14,044 14,249 16,225 15,660 Opencut 32,768 33,248 36,661 35,350 NSW 22,701 22,546 24,577 24,197 QLD 22,083 23,328 26,430 24,934 WA 1,109 904 1,003 1,003 SA 697 535 702 702 Tasmania 222 184 174 174 Australia 46,812 47,497 52,886 51,010 Black coal, saleable Underground 12,122 12,760 14,157 13,512 Opencut 26,545 26,255 29,251 27,937 NSW 18,897 18,633 20,430 19,670 QLD 17,843 18,843 21,178 19,979 WA 1,109 904 1,003 1,003 SA 697 535 702 702 Tasmania 121 100 95 95 Australia 38,667 39,015 43,408 41,449
Table 2. Tonnes of raw coal produced per employee, per hour for Australia's mines
Year Underground Opencut All Mines 1985 1.81 4.58 3.06 1986 1.88 4.75 3.19 1987 2.06 5.04 3.46 1988 2.12 5.29 3.68 1989 2.36 5.24 3.83 Source: Australian Black Coal Statistics 1990, Coal Board/Queensland Coal Board
[TABULAR DATA OMITTED]
integrate its existing Saxonvale open pit with the adjoining Bulga prospect. This would increase total annual production up to 6 Mt of raw coal (around 4 Mt saleable), comprising soft coking and steaming/PCI coals. Run-of-mine output in 1989/90 was 2.8 Mt.
Dartbrook is a 50/50 venture between Austen & Butta and Shell Australia. An export steaming coal longwall mine with a maximum production of 2.5-3 Mt/y is envisaged. The plans will cost $A200 million and the mine could be operating by 1994.
Glennies Creek is another underground project, planned to develop in stages over three to five years to a maximum of 3 Mt/y. This is a Maitland Main Collieries property, in partnership with Toyo Menka Kaisha and Nippon Oil (Australia).
Coal & Allied is developing Hunter Valley No. 2 immediately to the south of its Hunter Valley No.1 opencut. Construction has started and the two will be operated as an integrated producer with a maximum annual output of around 7.5 Mt/y raw coal (5.5 Mt saleable). To the north, the Liddell joint venture is a small opencut that has started production, 0.5 Mt/y over a life of five years. The partners are Savage Resources (56.5%), Marian Mining (33.5%) and Mitsui Matsushima Australia (10%).
Mitchells Flat is owned by FAI Mining. This staged longwall development could produce up to 3 Mt/y of raw coal. North-west of Mitchells Flat, Hunter Valley Coal Corp. proposes a 1 Mt/y open-cut at Mt. Owen.
The Narama steaming coal opencut joint venture of Costain Australia and Nardell Colliery was awarded a contract by the Electricity Commission in January 1990 for the supply of 2 Mt/y for a period of 20 years. First coal deliveries are scheduled for January 1993.
Rix's Creek Stage 1 (Bloomfield Collieries) commenced open-cut production in August last year, at 300,000 t/y of raw coal Stage 2 development to 1 Mt/y saleable depends on market conditions. Similarly, surface-mined production on a small scale has started (160,000 t of raw coal in 1990) from United Colliers' (95% Agipcoal) United mine. It is expected to build up to 500,000 t/y from underground by 1992, and could see further expansion, using longwall methods, to 2 Mt/y.
The two projects outside the Singleton-N.W. District are
[TABULAR DATA OMITTED]
Vickery/Maules Creek and Westside. The first, 25 km north of Gunnedah, is owned by Novacoal Australia. The Vickery opencut is expected to have a life of six years and should be operating, at 1 Mt/y saleable, by the end of this year. This is likely to be followed by a larger development at Maules Creek resulting in an overall 5 Mt/y combined output.
Westside, owned by FAI Mining, is located 25 km south-west of Newcastle and started production early this year. Its output is 600,000 t/y of raw coal.
...and in Queensland
The Queensland Coal Board's 1989/90 Annual Review examined 16 potential coal mine projects, the most advanced of which are North Goonyella, Clermont, Gordonstone and Ensham, though the latter involves a legal dispute about the interests of Pacific Coal and Agipcoal Australia.
Shell Co of Australia is involved in four projects, Acland, Manningvale, Ta-room and Theodore. At Acland surface mineable measured in-situ reserves, with overburden to coal ratios better than 5:1 [m.sup.3/t], amount to 186 Mt in the Glen Roslyn deposit. More than 250 Mt of in-situ resources are indicated at similar ratios in adjacent deposits. Mine development depends on Shell finding suitable markets.
The Manningvale project estimates surface mineable in-situ resources with overburden to coal ratios up to 3.5:1 [m.sup.3/t] of 134 Mt in the Ownaview deposit and in-situ coal of 30 Mt available at ratios up to 3:1 [m.sup.3/t] in Manningvale West.
Measured and indicated resources at Taroom are 230 Mt, of which 195 Mt are at depths of less than 60 m. Feasibility studies for both domestic and export based operations have been completed. Nearby in the Theodore area 250 Mt of measured and indicated Class 1 bituminous coal can be extracted by open pit mining. Planning for the development of a 4.5 Mt/y mine has been undertaken.
Baralaba Coal's Dawson Valley project contains a total in-situ resource of 435 Mt (130 Mt measured and indicated). Substantial reserves occur at depths of less than 60 m and investigations continue.
Clermont Coal Mines is a joint venture between Exxon Coal Australia (55%) and Mitsubishi Development (45%). The whole project covers 614 [km.sup.2] in which five coal basins have been found. Exploration has concentrated on the Wolfgang Basin, defining six seams with total reserves in excess of 263 Mt suitable for opencut mining. Feasibility studies have been completed and detail design work for a 6 Mt/y operation is well advanced.
The Commodore and Felton project, with Amax Pacific Energy holding the major share (66.5%), has delineated five deposits (Commodore, Lochbar, Bringalily, Felton West and Felton East) with a total resource of 1,562 Mt (1,185 Mt measured).
At Ensham estimates for the opencut mineable reserves in the measured category are 95 Mt to 60 m below surface and 117 Mt between 60 and 100 m. A detailed feasibility study has been completed. The go-ahead for a 4 Mt/y operation was expected in the near future. However, the current legal dispute could delay any decision for some time. The QLD government withdrew the concession from the previous holders -- namely Agipcoal and Pacific Coal (each with 19%), Lucky Gold Star (5%) and Idemitsu (57%) -- and reassigned it to Idemitsu and Lucky Gold Star only. Agipcoal and Pacific Coal have initiated proceedings to protect their investment.
The Gordonstone mine -- Arco Coal Australia 89%, Mitsui 15% and Lend Lease Corp. 5% -- is expected to be fully operational in 1994. At a planned production rate of 4.2 Mt/y, it will be the largest underground coal mine in Australia and will greatly enhance Arco Australia's current output of about 8 Mt/y from its share of production from various operations.
Gordonstone is expected to be the most technically advanced operation of its kind in the workd, with two longwall sections. Based on reserves of 200 Mt of high quality metallurgical and steam coal it will have a life of at least 25 years (International Mining, July 1988, pp51-53).
White Mining has delineated some 240 Mt of proven reserves at Harrybrandt by the drilling of over 500 holes. The coal is a high quality anthracite and investigations for a 1 Mt/y mine continue. To the south, Macalister Mining has identified measured reserves of 265 Mt to a depth of 60 m at Macalister. Detailed engineering studies have been completed for both export and domestic market projects at various outputs up to 8 Mt/y.
The Nebo project (BHP-Utah Coal 80%) contains 334 MT mineable by opencut and 908 Mt mineable by underground methods in six deposits (Wards Well, Poitrel, Kemmis Walker, South Walker, Bee Creek and Suttor Creek). Just to the north the North Goonyella joint ventures of Sedgman & Assocs., White Mining and Sumitomo has identified three important seams; Goonyella Upper, Middle and Lower. Production is anticipated at over 3 Mt/y of hard coking coal and a secondary thermal coal. First production from development headings is expected this year with full longwall production from Goonyella Middle in 1993.
Brigalow Mines, wholly owned by MIM, has two projects, Rolleston and Wandoan. In the first, measured and indicated resources of 274 Mt at depths of less than 80 m have been identified. Feasibility studies for both domestic and export markets have been completed. Wandoan's status is similar; measured and indicated resources total 598 Mt to 80 m in the Austinvale, Woleebee and Frank Creek deposits.
The Surat project of MIM (85.34%) and McQueen (14.66%) embraces 16 deposits, Sefton Park and Rywung in the Chinchilla area; Frank Creek, Wubagul/West Wubagul, Woleebee Extended, Paradise Downs, Burunga, Glen Laurel, Stanley Park, Elimatta, Pony Plains and Spion Kop in the Wandoan area; and Cowangah, Cattle Creek, Boxvale and Orazabah in the Taroom area. Measured resources total 270 Mt, with a further 610 Mt indicated.
Elsewhere in the Queensland coalfields, MIM Holdings opened a long-wall at Oaky Creek last year, a joint venture between MIM (86.5%), Hoogovens Delfstoffen of the Netherlands (8.5%) and Empresa Nacional Siderurgica of Spain (5%). The new longwall cost $A135 million and took 18 months to develop. It expands Oaky Creek output from 2.7 to 3.9 Mt/y.
The Blair Athol partners led by Pacific Coal (52.7%) are considering expanding output to some 10 Mt/y.
The Blair Athol partners led by Pacific Coal (52.7%) are considering expanding output to some 10 Mt/y.
In the Brigalow area of the Darling Downs, Allied Queensland Coal is considering an opencut with an output of 500-600,000 t/y. This would supplement depleted reserves from its Aberdare opencut due to close at the end of 1992. There are no plans to exploit the underground deposit at Aberdare.
The future and needs
For the future prospects for Australian coal, Australian Mineral Economics (AME)  predicts total national output reaching 214 Mt of black coal by the year 2000. Exports are forecast to rise to 72 Mt of coking coal and 85 Mt of thermal coal, giving a total of 157Mt. By comparison, IEA Coal Research's forecasts project exports of 57 Mt of metallurgical coal and 66 Mt of thermal coal by 2000, a total of 123 Mt. It also predicts domestic thermal coal demand for bituminous and sub-bituminous coals at 34 Mt of brown coal/lignite, and metallurgical demand at 10 Mt.
Ian Dunlop's thoughts on technology and associated labour requirements are that "Australia will continue to be a high unit cost environment for both labour and capital. Therefore it is only possible to achieve a competitive edge internationally if we have the latest technology, and industrial arrangements that allow the use of that technology as flexibly and efficiently as possible.
Industrial flexibility has to emerge from current restructuring activities. The availability of technology will require an increased commitment to, and responsibility for, research and development, which the industry is keen to assume, not purely for this purpose but also covering the full range of activities with which the industry is involved.
In the utilization area increasing efforts must be made to improve the environmental acceptability and efficiency of coal combustion. Fortunately, the coal industry is well advanced in this regard, with a wide range of technologies currently being developed and implemented".
 Dunlop, Ian T. 'Challenges for the Australian Coal Industry, Directions for the 1990s', National Coal Week Conference, 15 April 1991, Sydney.
 New SOuth Wales Coal Yearbook 1989-90, Joint Coal Board.
 Australasian Coal Monthly Review, Robertson Australia and Min-Met Information Services, various issues.
 Coal Still the Energy Baseline, AME Commodity Report, January 1990.
 Queensland Coal Board 39th Annual Review 1989/90
 Register of Australian Mining 1991/92