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Australian Black Coal Mining Operations

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					  AUSTRALIAN BLACK COAL MINING OPERATIONS
                           Ken Cram, Project Manager, Coal Services Pty Limited

Demand & Supply
The expansion of the Australian black coal mining industry has been totally driven by
the export demand and to a lesser degree the slight increase in the domestic
consumption. Examining the last 10 years as per Figure 1 shows Australian saleable
production increasing from 180.1 M tonnes in 1993, up to 273.6 M tonnes in 2002.
Exports have followed the same path with 131.8 M tonnes in 1993 increasing to 204.2
M tonnes in 2002, over a 50% increase. Domestic consumption has only risen by just
over 20% in the same period from 53.9 M tonnes in 1993 to 66.3 M tonnes in 2002.

                                 AUSTRALIAN COAL DEMAND & SUPPLY

                    300
                    280
                    260
                    240
                    220
   Million Tonnes




                    200
                    180
                    160
                    140
                    120
                    100
                     80
                     60
                     40
                     20
                      0
                          1993    1994   1995     1996   1997   1998   1999   2000     2001   2002

                                         Stocks      Domestic     Exports     Production


                                                     FIGURE 1

In the year 2002 Australian saleable production was as follows:
        Queensland            151.9 M tonnes        (56%)
        New South Wales       111.9     “           (41%)
        Western Australia        6.3    “
        South Australia          3.1    “
        Tasmania                 0.4    “
        Australia             273.6 M tonnes

The market for Australian coal in the year 2002 was as follows:
      Exports                                76%
      Domestic Electricity Generation        20%
      Other Domestic Use                      4%




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                                  1
Domestic Consumption
Together the power generating and steel industries used around 92% of domestic
consumption in year 2002. The cement industry and alumina refineries in Queensland
and Western Australia used most of the remaining 8%. Power stations consumption
has risen in the last 10 years from 40.7 M tonnes to 55.3 M tonnes. The steel industry
in the same period has reduced consumption from a peak of 7.4 M tonnes in 1995
down to 5.6 M tonnes in 2002. Other consumers has remained reasonably static over
the last 10 years around 4.5 M tonnes.

Australian coal industry stocks have increased and were at their highest levels for 5
years in December 2002, with a 50% increase on the levels of the early 1990’s.

Exports
Black coal exports from Australia reached a record 204.2 M tonnes in year 2002.
Queensland 125.3 M tonnes – Metallurgical 41% and Steaming 20%.
NSW 78.9 M tonnes – Metallurgical 10% and Seaming 29%.
As shown in Figure 2 Australian exports by regions continues to show that Japan is
the major market representing 90.6 M tonnes, 44.4% of overseas black coal sales in
2002. In the calendar year 2002 Asian markets (including Japan) represented 79.3%
of Australian black coal exports while shipments to Europe represented 15.3%. In the
last 10 years other Asian markets outside Japan have shown the highest growth from
42 M tonnes up to 71.3 M tonnes, a 70 % increase.
                                 AUSTRALIAN COAL EXPORTS BY REGIONS

                    220
                    200
                    180
                    160
   Million Tonnes




                    140
                    120
                    100
                     80
                     60
                     40
                     20
                      0
                          1993     1994   1995       1996     1997     1998   1999       2000     2001   2002


                                 Japan           Europe          Other Asia          Other Countries



                                                            FIGURE 2

Examining coal types gives a clearer understanding of the growth. Metallurgical coal
exports over the last 10 years have risen around 40%. During that period exports to
Japan rose by less than 30% but exports to other Asian countries increased by around
40% and to Europe by over 75%. Metallurgical coal exports to other countries have
only increased by about 20%. Steaming coal exports over the last 10 years have risen


LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                                             2
by over 70%, exports to Japan increasing nearly 60% but the largest growth was other
Asian with over a 100% increase and Europe about a 30% increase.

Australian export coal port capacity is currently reported at 236.5 M tonnes with
surplus capacity on the 2002 exports at all ports except Gladstone and Abbott Point in
Queensland. At Gladstone RG Tanna are commissioning a third berth in late 2003
which will increase port capacity.

Export Coal Prices
The FOB value of black coal exports for 2002 was $A12.78 billion which was an
increase on 2001. While the increase in value of exports in 2001 was because of the
large rise in the average FOB value per tonne, the rise in 2002 was the result of the
increased tonnage. The price fluctuations over the last 10 years have been a roller
coaster ride. The price now in this years $ is the same value as we were receiving in
the early 1990’s in those year’s $ value. In recent years the average FOB value per
tonne has been declining since late 2001, as shown in Figure 3.


                            FOB PRICE, AUSTRALIAN COAL EXPORTS
                           QUARTERLY AVERAGE FOB PRICE, $A/TONNE

        90


        80


        70
   $A




        60


        50


        40


        30
             1993   1994    1995   1996     1997   1998       1999      2000    2001   2002

                                     Hard Coking   Other Coking      Steaming


                                            FIGURE 3

The average FOB price per tonne for metallurgical coal in 2002 was $A73.69 up on
2001 but a fall in the price at the beginning of the current Japanese fiscal year and the
strong $A against the $US could see this decline further, even with a Japanese
contract price rise next year. Steaming coal’s average FOB price per tonne fell during
2002 to $A51.03 and although predictions are for an increase in next years Japanese
utility contract prices a stronger $A could impact.




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                           3
Production
Australian saleable coal production is predominantly from open cut mines achieving
201.4 M tonnes and 72.2 M tonnes from the underground mines in the year 2002.
During the last 10 years open cut production has risen by nearly 60%and underground
output rising by just over 35%, all this increase has been mainly driven by export
demand. Queensland has increased output in the last 10 years by over 75%, 111.1 M
tonnes to 196.1 M tonnes compared to NSW mines of around a 35% increase, 104.5
M tonnes to 143.6 M tonnes. The number of coal mines over the last 8 years has
declined from 123 in December 1995 to 103 in December 2002. The number of open
cut mines in last 10 years has remained reasonably static at around 60 mines but the
number of underground mines has reduced from 60 to only 40 mines. The majority of
the mine closures were in NSW during the last 5 years.

Australian raw coal production by mining method has seen the underground industry
change from predominantly continuous miner production to longwall mines. The non-
longwall mines output in the last 10 years has nearly halved from 15.7 M tonnes to
7.5 M tonnes, whilst the longwall mines output has increased by over 70% up from
46.8 M tonnes to 80.6 M tonnes as per Figure 5.

                                   RAW COAL PRODUCTION, AUSTRALIA
                                        BY METHOD OF MINING

                   360

                   320

                   280

                   240
  Million Tonnes




                   200

                   160

                   120

                    80

                    40

                     0
                     1993   1994     1995   1996    1997       1998      1999   2000   2001   2002

                                              OC Mines   UG Mines   LW Mines


                                                   FIGURE 5

Longwall Mining Production

Total longwall face production peaked in 2001 at 76.8 M tonnes, as per Figure 6.
Production from longwall faces is as follows:
        • 2002
               NSW 23        faces          38.37 M tonnes
               Qld    11        “           35.35 “
               Aust 34          “           73.7    “




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                                  4
                                     •    2002 / 03
                                             NSW 20             faces              35.7 M tonnes
                                             Qld    9             “                32.3    “
                                             Aust 29              “                68.0    “
                                PRODUCTION FROM LONGWALL FACES
                                           AUSTRALIA
                    45                                                                                                                      45




                                                                                                                                                 No of Longwall Faces
Million of Tonnes




                    30                                                                                                                      30



                    15                                                                                                                      15



                    0                                                                                                                       0
                         1983
                                84
                                     85
                                          86
                                               87
                                                     88
                                                          89
                                                               90
                                                                    91
                                                                         92
                                                                              93
                                                                                   94
                                                                                        95
                                                                                             96
                                                                                                  97
                                                                                                       98
                                                                                                            99
                                                                                                                 00
                                                                                                                      01
                                                                                                                           02
                                                                                                                                02/03
                                               NSW         QLD           No Year Faces
                                                                            NSW                   No QLD Faces
                                                                         FIGURE 6

                          In October 2003 the number of longwall faces has reduced to 25 as per the following:
                                 • NSW
                                        Southern       5
                                        Western       4
                                        Northern       3
                                        North West     4
                                        Total         16
                                 • Qld
                                        Northern       3
                                        Central       6
                                        Total          9

                          In NSW the number of longwalls will probably remain static with Dendrobium (2004)
                          replacing Elouera and Kayuga (2004) replacing Dartbrook. Mandalong (2005) will be
                          an additional longwall. In Queensland additional longwalls will be at Broadmeadow
                          and Grasstree which is a replacement for German Creek Southern.

                          Longwall Mine Size
                          In 1993 there were only 2 mines > 3 Mt and 8 mines > 2 Mt.
                          In 1998 there was 1 mine > 4 Mt, 5 mines > 3 Mt and 7 mines > 2 Mt.
                          In recent years some > 5 Mt and one mine >7.5 Mt. At least 4 – 5 mines > 4 Mt and
                          up to 8 mines > 3 Mt.


                          LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                                           5
Comparing Australian operations to the USA for year 2002, Australia had 33 mines
(excluding Alliance) and produced 65.4 M tonnes saleable. The USA had 50 mines
and produced 185.8 M tons clean coal. The top 7 mines are as follows:

USA
       •   2002
           Bailey                   9.66 M tons clean
           Enlow Fork               9.57 “
           Sufco                    7.6   “
           Twenty Mile              7.57 “
           Cumberland               6.64 “
           Emerald                  6.56 “
           West Elk                 6.56 “

           TOTAL                   54.16 M tons clean

AUSTRALIA (Year Longwall Mining Commenced)
     • 2002
       Oaky North (1999)            5.29 M tonnes saleable
       Kestrel (1993 Gordonstone)   4.09          “
       Newlands (1998)              3.75          “
       Crinum (1997)                3.74          “
       Ulan (1986)                  3.52          “
       Appin (1969)                 3.01          “
       German Creek Southern (1989) 2.89          “

           TOTAL                          26.29 M tonnes saleable

       •   2001
           Oaky North (1999)               4.86 M tonnes saleable
           Moranbah North (1999)           4.41          “
           Ulan (1986)                     3.69          “
           Newlands (1998)                 3.51          “
           Kestrel (1993)                  3.27          “
           Kenmare (1996)                  2.96          “
           German Creek Southern (1989)    2.92          “

           TOTALS                         25.62 M tonnes saleable

       •   2000
           Crinum (1997)                   4.29 M tonnes saleable
           Newlands (1998)                 4.04          “
           Oaky North (1999)               3.31          “
           Moranbah North (1999)           3.31          “
           Kestrel (1993)                  3.29          “
           Oaky No1 (1990)                 3.28          “
           Dartbrook (1996)                3.24          “

           TOTAL                          24.76 M tonnes saleable



LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                6
The USA top 7 mines in 2002 produced 54.16 M tons clean coal. Examining the
Australian top 7 mines over the last 3 years has averaged 25.56 M tonnes saleable
coal. Therefore the top 7 Australian longwall mines produced around half (50%) of
the USA top 7 longwall mines. There is a slight difference between US tons and
tonnes but our largest producer in the last few years Oaky North would only rate at
number ten in the USA. Australian producers have been looking at the difference for a
number of years. How to lift the bulk output of Australian longwall mines?

In 1999 Jim Galvin & Phil McCarthy did a detailed analysis of the USA and
Australian longwall mine difference, their observations were:
       • The performance of Australian longwalls still lags well behind that of the
           USA operations
       • Technology alone can’t account for the difference in performance
       • Mining conditions do not account for these differences
       • Coal cutting technology is very similar in both countries
       • Significant differences in the mining process. In particular, both the
           average and maximum widths and lengths of USA longwall blocks are
           substantially greater than Australian longwalls
       • Conclusions were that there was a great opportunity for Australian
           operators to improve their performance by obtaining better utilisation of
           existing capital

Longwall Mine Initatives
The issue of wider face lengths is being addressed. The newer high capacity
installations have extended greater than 250 m. Current installations of Beltana 262
m, Crinum 270 m, Moranbah North 254m, Oaky North 260 m and Oaky Creek No1
300m. A number of these faces have specifications to allow extensions to 300m.
There are older faces like Springvale and Angus Place that are also planned for 300m.

Longwall block lengths are also being addressed. There are mines now operating with
extended blocks, (klm) Baal Bone 3.2, Appin 3, United 3.2, Moranbah North 3.4 and
Oaky Creek 3.3. Some existing mines are planning longer blocks (klms) Springvale
3.8, Angus Place 3.5 with > 3.5 Mt, Newstan 4, North Goonyella 5, BHP Billiton
No1 Seam (Bulli) 4, BHP Billiton No3 Seam (Wonga) Dendrobium 3.8 klms x 250m
face block tonnage of 3.5 Mt and by year 2008 5.2 klms x 300m face with block
tonnage of 9 Mt.

Longwall mining equipment is not covered in any great detail but higher capacity
shearers have been evolving over the last 5 years and the current Beltana DBT Electra
EL 3000 has cutter motors of 850 kW and a total installed power of 1990 kW. AFC
technology has improved to allow longer faces and higher capacities in tph.

Roof support steel technology has allowed the development of 1.75 m wide shields as
the norm and a trial development installation of 2 m wide shields which has the effect
of cutting down cycle time. Improved shield control technologies and greater
hydraulic leg support capacity coupled with shearer initiation has allowed another
way of decreasing cycle time.




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                    7
Productivity

Australian underground mines productivity has nearly doubled in the last 10 years
with saleable annual output per employee increasing from 4600 tonnes in 1993 to
8790 tonnes in 2002. Examining the main two longwall states for 2002 underground
has NSW at 7520 tonnes and Qld at 11785 tonnes. As a comparison the open cuts in
NSW and Qld are achieving around 15000 tonnes saleable annual output per
employee. The range of Qld longwall mines productivity for 2002 – 2003 is 4700
tonnes to 27250 tonnes. The NSW longwall mines range is from 4700 tonnes to
15000 tonnes. On a pure productivity basis if you take the top five NSW longwall
mines and compare them to the total NSW open cut mines on a saleable basis. The
longwall mines would be positioned in the bottom third of the open cut productivity.
The open cut top four producers are in the range of 34000 to 40000 tonnes saleable
some are small opencuts two < 1 M tonnes and Ulan 2.5 M tonnes but with Bengalla
as one of those mines producing over 6 M tonnes saleable which is what the longwall
mines want to achieve.

NSW Longwall Respirable Dust Results
Gravimetric dust sampling commenced in 1984 when there were 12 longwall faces,
which peaked at 25 faces by 1997 but has reduced to 20 by 2002. Longwall samples
over the 18 year period have resulted in over 7% of the samples exceeding the
3mg/m³ level. During the 1980s the percentage of results exceeding the limit peaked
at over 18%. From 1990 substantial initiatives by coal companies achieved the present
situation where only 6% of results exceed the limit but longwall mining results still
remain the main area of concern. The overall trend during the period has been a
reduction in the percentage of samples exceeding the limit. There had been a slight
deterioration in the late1990’s and this was attributed to a few particular longwalls
where there were operational problems. These are being addressed and the trend in
results exceeding the limit is expected to continue going down in the future.

It should be noted that two significant changes occurred in the 1984-2002 period.
Firstly the number of longwall faces had doubled and the average shift longwall face
output increased by more than 100%.

Respirable dust monitoring results for all NSW longwalls after 18 years monitoring
has achieved 14,170 personal samples with just over 1,002 (7.1% failures) exceeding
the prescribed limit. Which longwalls or coalfields are contributors to these failures?

Western coalfield mines are not a significant contributor 1,500 personal samples and
only 52 failures (3.5%). In 1987 and 1994 a few dust problems affected results at
Clarence and Ulan. In 2001 there were some high dust results on a Lithgow seam
longwall mine which are being addressed.

In Southern coalfield mines, which were the forerunner for longwall mining, 5,930
personal samples and 465 failures (7.8%). The NSW dust failure trend has
traditionally followed the performance of the southern coalfield mines which had
generally half the longwall samples and half the failures. There had been a concerted
effort in the late 1980’s to drive the high 30% of failures down to the present level of


LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                        8
3 – 5%. In the last 5 years the southern coalfield results have been better than all the
NSW percentage failures, although the number of southern faces has reduced by 30%.

Northern coalfield (Newcastle) longwall mines had 4,770 personal samples and 276
failures (5.8%). During the 1980’s results were better than the all NSW percentage
failures, from the mid 1990’s the results have not been as impressive and the situation
up to year 2000 was worse than the combined results of the NSW longwall faces. The
main contributor during those years had been the new faces in the West Borehole and
Great northern seams. Combined efforts were concentrated to reduce the personal
exposure on the longwall faces to the present level of 5 – 6 % of results failing. The
number of northern faces has been reasonably static for the last 10 years.

Hunter coalfield (Singleton) longwall mines have had 1,960 personal samples and 209
failures (10.7%). The number of faces has doubled in the last 10 years and since the
mid 1990’s the results have seen the number of failures (8 – 10%) far in excess of the
NSW number of failures, around 6%. Initially the main contributors were faces in the
Whybrow and Pikes Gully seams. From the mid 1990’s the Wynn seam at Dartbrook
Colliery has been difficult to longwall mine and maintain dust levels below the
prescribed limit. All the Hunter coalfield longwall operations have been continually
trying to improve dust suppression measures and operating procedures to reduce the
face operators dust exposure levels.

Longwall dust suppression has been very successful in the following areas:
  • sealing the covers on the BSL, dust scrubbers on the crusher and enclosing the
     BSL discharge onto the gate belt to reduce intake contamination
  • homotropol ventilation has been very successful in allowing clean
     uncontaminated air onto the longwall face
  • water infusion in the Bulli and Wynn seams utilising in-seam gas drainage
     holes has been reasonably successful in putting some moisture back into the
     seam
  • operator location with emphasis on face operating procedures has been a
     major contributor to the improved longwall face dust results.
  • shearer initiation of chocks (shields) advance has also moved people from the
     return side of the shearer.
NSW Longwall Respirable Quartz Results
The samples sent for analysis were from those locations where the mining practice or
material was expected to contain high quartz containing dust and where the sample
failed the respirable dust limit. In the case of longwall samples 20% were sent for
quartz analysis. Samples from longwalls sent for quartz analysis had a 1 in 3 chance
of exceeding the specified limit of 0.15mg of respirable quartz/m³.

High quartz has resulted from longwall mining through stone rolls, faults and dykes or
when cutting roof and floor. Some coal seams in the Hunter coalfield are high in
quartz and are proving difficult to maintain below the CMRA maximum allowable
limit of 0.15mg/m3. Examining the quartz results in a worst case scenario including
re-samples, 536 failures 3.8% of 14,170 personal samples.




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                    9
The western coalfield had 21 failures and this is only 1.4% of the 1.510 samples.
Overall there have been only a few problems over the last 10 years. In the last 2 years
there have been high results at a Lithgow seam mine cutting roof stone in sections of
the longwall block. The southern coalfield had only 31 failures, 0.5% from 5,930
samples. The southern coalfield and western coalfield traditionally only have high
quartz results when longwall faces are cutting roof, stone rolls or floor stone.


Quartz results in the northern coalfield (Newcastle) showed 302 failures, 6.3% from
4770 samples. This coalfield from 1985 – 95 was far above elsewhere in NSW and a
main contributor to the high trend of failures in NSW. The Great Northern seam
longwalls had high quartz results during this period, overall in the last 5 years the
situation has improved. The Hunter coalfield had 182 failures from 1960 samples,
which is over 9.3%. This coalfield has impacted greatly on the quartz results trend in
NSW. The longwalls in the Whybrow seam have been the area of main concern, high
quartz content in the seam and a need to operate at half the respirable dust levels to
avoid quartz failures. The need to cut substantial amounts of roof on the longwall
faces in the Pikes Gully and Liddell seams is going to be an area that needs to be
addressed.

Coal Services Order 40 – Abatement of Dust on Longwalls
An initiative of the Joint Coal Board (and continued by Coal Services by its role in the
area of airborne dust) was the issue of Order 40 on 5 July 1990. This order requires
the manager or owner of any mine operating by longwall or shortwall mining methods
to obtain Coal Services approval prior to the commencement of production in any
longwall or shortwall block. Results of dust samples from previous longwalls are
examined prior to approval. Most approvals granted are subject to some form of
imposed conditions.

The advent of Order 40 appears to have created a more positive and co-operative
attitude towards dust control measures by both management and unions.

Dust Conclusions

Results of the Coal Services Health Dust Monitoring programs combined with
epidemiology studies indicate that adherence to the current maximum exposure
standards outlined earlier is sufficient to maintain a healthy industry workforce.

Even though occupational lung diseases are currently well controlled in the New
South Wales and Queensland industry, it is essential that face management is vigil to
ensure that longwall machinemen adhere to face operating procedures, to limit dust
exposure and that dust suppression equipment is maintained through engineering
maintenance programs.

In mines operating in seams with high levels of inherent quartz and where there is a
need to cut roof stone, it is necessary for operators to achieve lower than required dust
levels in order to meet the specified levels of respirable quartz.




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                   10
Although recent annual reports from Coal Services former organization the Joint Coal
Board have been indicating prevalence rates of pneumoconiosis in the NSW coal
industry of less than 0.5%, respirable dust control management plans should still be a
high priority.

Summary
In 1990 Ripu Lama, Manager Mining Technology, KCC – CRA (RioTinto) and
myself presented a paper on “Developments in Longwall Mining Technology in
Australia and Future Trends” a detailed analysis of variance indicated that the order
of factors influencing productivity were seam thickness, conveyor system capacity,
face lengths, manning, mining depth, shearer power and block length. Some of those
factors have been the key areas to address to increase productivity.

Shearer initiation and shearer horizon control have sped up cycle times and allowed
higher cutting rates on the face. Wider roof support canopies have reduced the cycle
time further coupled with better roof support control technology. In 1990 the forecast
was for 20 000 tonnes per day in 2003 this has been achieved regularly at a number of
mines. Improvement of environmental conditions particularly dust is still essential for
increased face shearing speeds and bi-directional methods. Condition monitoring of
equipment was considered in 1990 as desirable. System available in 1990 was an
average of 30-40%; Jim Galvin (1999) reported 61.7% and stated the focus needed to
be on the mining process improvement. In 1990 when longwall mines were achieving
> 3 M tonnes expectations were for 4 – 5 M tonnes per annum single longwall
operations. Jim Galvin (1999) stated there were huge opportunities for the Australian
underground coal sector if it can achieve improvements in the mining process. The
operators need to target longwall block dimensions of +300m face x 5000m length in
the next 10 years. These statements are still valid in 2003.

Acknowledgment
The excellent statistical information and assistance supplied by Coal Services Pty
Limited Statistics and in particular that of Carol Mische and Lyn Ferguson.
Coal Services Statistics E-mail: statistics@coalservices.com.au




LONGWALL 2003, 19 – 20 November 2003, Hunter Valley, NSW. Australia                  11

				
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