Dec 09, 2017

New life for Bowen Basin coal sites

New life for Bowen Basin coal sites

Earth is shifting again at the Broadlea mine site in the Bowen Basin and nearby Carborough Downs is running with a workforce of more than 350 people, despite having been earmarked for closure months ago.

Met coal-focused junior Fitzroy Australia Resources has saved both from the scrap heap after acquiring the assets from Brazilian mining giant Vale in December 2016.

It is also taking a close look at the mining potential of Vale’s Ellensfield coal project, now known as Ironbark No. 1.

So how does a company make a go of operations that an international miner has turned its back on, having left Broadlea mothballed since 2009 and planning to place Carborough Downs into care and maintenance mode in April this year?

Chief executive officer Grant Polwarth says Fitzroy Australia Resources’ owners (AMCI and Riverstone) and its experienced executive team take a long view on the metallurgical coal market and see immense opportunity and value in the underlying assets acquired from Vale.

“Building a long-term future for Carborough Downs and the broader Fitzroy assets requires out-of-the-box thinking, visible leadership and a clear plan for the future where we have conviction in the business and one another as a team,” Mr Polwarth said.

“We unapologetically seek to challenge industry norms and set ourselves high standards for safety, cost and productivity.

Fitzroy Australia Resources chief executive officer Grant Polwarth.

“Being a smaller private business with a flat management structure means we can be dynamic in our decision-making processes and focus on our business.”

Details of the transaction with Carborough Downs majority owner Vale are confidential. Meanwhile Fitzroy has also reached an agreement to purchase the remaining 10 per cent of the Carborough Downs Joint Venture from JFE Steel, JFE Shoji and POSCO-CD.

Mr Polwarth said the new company saw this cornerstone investment as a unique opportunity to build a people-focused business underpinned by world-class infrastructure, high-quality coking coal and a significant untapped future.

He said Fitzroy had optimised the mine plan at Carborough Downs, restarted underground development driveage and provided longwall continuity in the business plan.

It had made significant capital investment in equipment and expansion of the mine to the northern reserves at Carborough Downs.

“Fitzroy did not acquire the assets to place them into care and maintenance – we made the decision to retain the current workforce and staff at Carborough Downs and build a culture of success together,” he said.

“Expansion activities and restarting of underground development have resulted in a current workforce of about 350 as well as additional specialist contractors.”

At Broadlea, he said Fitzroy immediately undertook further exploration and mine plan optimisation investigations before deciding to recommence mining.

Golding Contractors have been awarded the contract to mine and operate Broadlea on behalf of Fitzroy, with overburden movements commencing in October 2017.

“It is exciting to see new life breathed into Broadlea and the energy it has created within our business and in the broader mining community,” Mr Polwarth said.

About 55 permanent staff and 15-20 full-time contractors are expected to be employed at that site over an anticipated 12-month mining project.

As for the future, Mr Polwarth said Fitzroy planned to continue to expand Carborough Downs to the northern reserves, with aiming for a mine life of more than 10 years.

“We are also in the process of finalising the environmental approvals and feasibility assessments for the Ironbark No.1 coal project (formerly known as the Ellensfield Coal Project), which is a 25-year mine life greenfields underground longwall operation,” he said.

More broadly, Mr Polwarth said Fitzroy had an appetite for expansion, including through merger and acquisition activity where it made strategic sense, added value and would complement the company’s current assets.

 

 

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