Nov 04, 2016

Batchfire reveals plans for Callide coal future

Batchfire reveals plans for Callide coal future

Batchfire Resources has a new mine plan and aims to increase exports from the Callide mine in central Queensland after taking the reins this week from former owner Anglo American.

Chief executive officer Peter Westerhuis described the handover of the thermal coal operation as a ‘walk out, walk in’ transition.

“It will be business as usual, but we will be implementing a different mine plan and a different philosophy as to how the mine will be managed,” he said.

“The impact on the site will be minimal.”

The Callide coal mine, 20km north-east of Biloela, employs about 600 people and Mr Westerhuis described the reaction from the workforce during his visit this week as being overwhelmingly positive.

Anglo American, which has clearly stated its intention to back away from coal, officially announced completion of the sale of the open-cut thermal mine to Batchfire Resources on Monday following the initial news of the agreement in January.

CS Energy chief executive officer Martin Moore welcomed the development as providing ongoing stability and certainty for its Callide power station operations.

The Callide B and Callide C plants are the major customer for coal mined at the site.

Mr Westerhuis said about 5.5Mtpa of the mine’s output went to CS Energy, about 1Mtpa to Queensland Alumina Limited at Gladstone and that Callide had historically exported in excess of 1Mtpa.

“Callide has always been an exporter and we want to make sure that continues to grow,” he said.

“It will ramp up over time – we don’t have any fixed views on that. But we will be actively looking at getting as much as we can into the export market, giving of course first priority to our domestic customers.”

Batchfire Resources is a Brisbane-based private company established by a group of long-time mining industry professionals from backgrounds including geology, mining engineering and finance.

“When this opportunity (the Callide asset) was first examined about three years ago we quickly became interested because it’s a very good resource – geologically stable, with good-quality low-sulphur coal, Mr Westerhuis said.

“It had some challenges regarding how to extract the coal at a sustainable cost and we’ve come up with a mine plan that does that.”

The resource had been mined for 70 years and could comfortable support another 50 years at least on its existing footprint, he said.

Workforce changes under the new structure would not be significant, Mr Westerhuis said.

“We’re a small Brisbane-based company not a large multi-national, global company like Anglo,” he said.

“We’ll have a different approach to things and consequently there will be some work done differently and that may have an impact on some roles.”

With major coal players shedding a number of coal assets in Queensland, juniors are latching on to new opportunities.

Mr Westerhuis said smaller companies usually had more flexibility, streamlined management structures and quicker decision-making.

“That all adds up to being able to run a business a little more efficiently, particularly at a mine site level. If you’re a single mine owner,  single mine operator – not part of a portfolio – it can have a positive effect on these operations that people get hold of, for sure,” he said.

“There’s been a few of these (acquisitions) in the past 12-18 months and I suspect there may be more.”

Not for Batchfire Resources though – Mr Westerhuis said the company had its plate full with Callide.

“We’ll be focusing 100 per cent on extracting the best value and getting things stabilised now the sale is finalised,” he said.

Mr Westerhuis said suppliers also could expect ‘business as usual’ after the change of ownership at Callide mine.

“We’re keen to continue the contractual arrangements of various vendors and suppliers – those things remain on foot,” he said.

“We will look also to engage with the local community and try to keep as much stuff local as we can.”

Batchfire Resources has installed Colin Moffatt as the new general manager operations and SSE for the Callide site.

The company received backing from Avra Commodities subsidiary Lindenfels for the acquisition. The terms of the transaction have not been released.


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