METALLURGICAL COAL
Olive Downs Finally Gets the Go Ahead
July 2019
Australia, the world’s largest producer of coking coal, remains at the forefront of new coal developments. AME forecasts that Australia will supply 187Mt of metallurgical coal bound to the global export market this year. Our analysts also estimate that Australia will maintain its position as the world’s largest supplier of metallurgical coal in the long-term.

While supplies from other large coal producers will remain mostly steady, Australia will almost double its current supply, with AME estimating that the country will produce 328Mt of metallurgical coal in 2039 for the global export market.  

Last month, the Queensland state government approved Pembroke Resources’ 100%-owned US$700m coking coal mine in the Bowen Basin—the world’s premier coking coal precinct—approximately 40km south-east of Moranbah.

The project would produce coking and PCI coal, for the export market, from an existing (brownfield) mining precinct. Up to 20Mtpa of coal will be produced at peak development, with an anticipated operational life of approximately 79 years, with first production expected in 2020. Operational rosters at the project would be 24 hours a day, seven days a week; construction rosters are expected to be 12 hour shifts with 21 days on and seven days off.

 

 

The region is well supported by existing infrastructures and logistics with Olive Downs set to capitalise on existing water and energy infrastructure, including existing roads, rail link to transport coal to the Dalrymple Bay Coal Terminal, a water pipeline and power transmission line. The Olive Downs project includes the construction of a central coal handling and processing plant (CHPP) with expansion phases in line with mine development; an automated train loading facility—with a capacity top load 10,000t trains—will also be built as part of the project infrastructure. Other facilities to support the day-to-day operations—such as mine offices, crib facilities, bathhouse, warehouse, workshops and re-fuelling facilities are to be built.

The proposed project has a maximum ROM coal production rate expected to stand at 20Mtpa; 12Mtpa of which are scheduled to come from Olive Downs South domain at peak development, while the other 8Mtpa is expected to be produced from the Willunga domain open cut mining areas at peak development.

The total capital expenditure for the Olive Downs project is estimated at A$1,009m (US$700m) over the project life and includes an allowance for rehabilitation costs. The initial capital costs to develop infrastructure to start operations at the Olive Downs South domain—which will allow for production of up to 6 Mtpa of ROM coal—is estimated at approximately A$440m (US$306m).

The project will generate many much-needed jobs in the region, with approximately 1,300 on-site personnel at peak production, 700 personnel during the construction of the Olive Downs South domain mine infrastructure area and another 200 personnel during the construction of the Willunga domain mine infrastructure area.