New owner Realm Resources has overseen a $15 million civil works program to set the Foxleigh pit up for the next eight to 10 years of mining, on behalf of the Foxleigh joint venture.
But managing director Glen Lewis believes the company can push the coal operation’s life out even further as it invests in exploration efforts on a 57,000ha tenement package that stretches from Curragh North to Middlemount mine.
It’s part of a long-term vision to make the most of an asset acquired from Anglo American in August last year as the global player moved to shed its Australian coal mines after posting a 2015 loss of more than $5 billion.
Backed by Taurus Funds Management, Realm Resources (via its 99.9 per cent interest in Middlemount South) acquired a 70 per cent interest in Foxleigh mine as well as two exploration areas for a cash payment of $43.7 million, plus royalties and bank guarantees.
Its Foxleigh joint venture partners are POSCO Australia (20 per cent) and Nippon Steel and Sumitomo Metals Australia (10 per cent).
Mr Lewis said there would always be a difference in approach between a small-to-medium operator and a global operator.
“Foxleigh is the most valuable asset we own, so we will do everything we can to add value to it and extend its life, whereas a major has so many things in their portfolio – their focus is different,” he said.
For Realm Resources, creating value means doing the right mine planning, exploration work and undertaking rehabilitation in a way that’s sustainable.
“It’s a good news story for the company, the community and the state,” Mr Lewis said.
AE Group recently completed civil works including a 4.1km creek diversion and construction of 5.6km of flood protection levees at the Foxleigh site to allow continued mining operations, which are now working through a superseded interim levee.
“The other thing being run currently is a fair bit of legacy rehabilitation work,” Mr Lewis said.
“Wolff (Group) have been in and have done a fantastic job on rehabilitating old mining areas – about 354ha.
“We will be continuing to do legacy rehabilitation because it helps us reduce the financial assurance held by the government.”
In addition to those works, Mr Lewis said Realm Resources was investing in excess of $3 million on exploration this calendar year.
Mr Lewis said it had “only just scratched the surface” so far, but had identified six targets it believed were worth putting a lot of time and money into.
“I’m fairly confident we will find more coal and keep this project going for quite some time,” he said.
While coal prices started to increase about the time Realm Resources took over Foxleigh, Mr Lewis said they had wanted to position the operation to be able to survive future downturns.
A restructure in March saw 120 full-time jobs reduced, with CHPP operations and maintenance activities outsourced to Sedgman Contractors and Comiskey Mining Services respectively.
“Operations should be a lot more sustainable for the long-term coal cycle,” Mr Lewis said.
Foxleigh – which produces low volatile PCI coal – now has a workforce of about 360, including labour hire positions.
“When you take over an acquisition you start with a 100-day plan,” Mr Lewis said.
“There are a significant number of things you need to do in the first 100 days to make the required changes for the future. We are beyond that point.
“We have done most of the structural changes and the rest is about bedding in the changes and then value adding.”