The NSW coal mining industry has enjoyed a period of extraordinary prosperity over the past two years, with coal prices rising on the back of increased domestic demand in China, rising global demand (particularly from Asia), along with supply disruptions from key producer nations.

Higher coal prices have stimulated investment in the NSW coal industry with a number of new mining developments or major expansions to existing mines proceeding to development.

Hunter Coalfield

In the Hunter coalfield new coal mine developments along with significant mine expansions are likely to result in continued increased production from this coalfield in the medium term.

Xstrata coal’s proposed $240 million Anvil Hill (now Mangoola) open cut coal mine project was approved by the NSW Government in June 2007. The proposed mine includes the mining of up to 10.5 Mtpa of thermal coal and may create up to 240 full time jobs.

In July 2007, the NSW Government approved a major expansion to the Liddell coal mine, north-west of Singleton. The $91 million expansion is expected to create up to 90 new full time jobs.

Approval was also granted in October 2007 for a $45 million extension to Xstrata’s Bulga underground mine. The approval will bring forward the development and mining of the Blakefield seam in the Southern Mining Area.

In December 2007, approval was granted for Bengalla Mining Company’s $21 million Wantana extension to the Bengalla coal mine near Muswellbrook. This approval will allow for the extraction of a further 7.5 Mt of coal.

Anglo Coal’s $35 million extension to the Drayton coal mine was approved by the NSW Government in February 2008. Coal production at the mine is expected to increase from 5.5 Mtpa to 8 Mtpa and extended the mine life until 2017.

Newcastle Coalfield

In June 2007 the NSW Government granted approval for Donaldson Coal’s proposed $83 million Abel underground coal mine. The proposed mine may extract up to 4.5 Mtpa of run-of-mine coal and create up to 375 full time jobs.

The Wyong area represents the last major undeveloped deposit of good quality, potentially mineable coal in the Newcastle coalfield. Wyong Areas Coal Joint Venture has commenced the assessment and approvals process for the Wallarah  No. 2 underground coal project. If approved, the mine could produce up to 5 Mtpa of coal and employ over 300 full time persons directly. The joint venture lodged a major project application with the Department of Planning in November 2007 and is currently preparing its Environmental Assessment for the project.

Gunnedah Coalfield

In the Gunnedah coalfield, a number of small to medium sized coal mines are likely to commence operation in the next few years, with the potential for a couple of larger operations to commence within the next decade.

Idemitsu Boggabri Coal has commenced mining operations at the Boggabri open cut coal mine. Initially, the mine is expected to produce up to 1.5 Mtpa of semi-soft coking and thermal coal with the potential to increase output to 5 Mtpa.

Mining has also commenced at Whitehaven Coal Limited’s Tarrawonga open cut coal mine. Construction on the mine commenced in mid 2006 and first coal was produced in late 2006. At full production the mine is expected to produce up to 1.5 Mtpa of exportable coal.

Narrabri Coal is proposing a new underground coal mine approximately 20 km south-east of Narrabri. Stage 1 of the Narrabri North proposal involves mining of up to 2.5 Mtpa of run-of-mine coal by continuous miners. The NSW Government granted approval for the Stage 1 proposal in November 2007 and the Minister for Mineral Resources granted a mining lease in January 2008. Construction on the mine commenced in early 2008, with the first production anticipated during the March quarter 2009.

In the second half of 2006, Whitehaven Coal lodged a major project application with the Department of Planning for its Belmont (now Rocglen) open cut coal mine proposal, located 25 km north of Gunnedah. The NSW Government granted approval for the mine in April 2008. The mine, at full production, may produce up to 1.5 Mtpa of run-of-mine coal and create up to 60 full time jobs.

Namoi Mining is proposing a new open cut coal mine, located 15 km west of Gunnedah, known as the Sunnyside coal project. The company aims to mine up to 1 Mtpa of run-of-mine Hoskisson seam coal using open cut and highwall auger mining techniques. Namoi Mining lodged a major project application with Department of Planning in November 2006 and is currently preparing its Environmental Assessment report for this project.

In April 2006, the Minister for Mineral Resources granted an exploration licence to BHP Billiton for the Caroona Coal Area in the Gunnedah Basin. The granting of the exploration licence followed on from BHP Billiton’s successful expression of interest for the Caroona coal exploration area. The Caroona deposit is estimated to contain more than 500 Mt of in situ potentially mineable underground coal that may produce a high quality exportable thermal coal.

In October 2007, the NSW Government announced a competitive Expression of Interest (EOI) process for the Watermark coal exploration area in the Gunnedah Basin. The Watermark coal exploration area is located approximately 35 km south-east of the town of Gunnedah. The Watermark deposit is expected to contain shallow resources of domestic and export quality thermal coal, with in situ coal resources expected to exceed 1 billion tonnes.

Western Coalfield

In September 2007, the NSW Government granted approval for Felix Resources’ $405 million Moolarben coal mine project. The Minister for Mineral Resources granted two mining leases in December 2007. The mine is expected to create up to 320 new full time jobs and produce around 12 Mtpa of saleable coal for both domestic and export markets.

Southern Coalfield

In December 2007 Gujarat NRE completed its $29 Million acquisition of the former Elouera longwall mine from BHP Billiton, which has been operating since 2005 under a limited contract mining agreement with Delta Mining Company. Gujarat NRE announced they have renamed the mine NRE Wongawilli. The mine expected to employ up to 100 people and produce up to 1 Mtpa of coal. Gujarat NRE commenced mining at NRE Wongawilli in early 2008.

Meanwhile, BHP Billiton is proposing to extend underground longwall mining operations at its Appin coal mine. NSW DPI approved longwall mining at Appin West (otherwise known as the Douglas Project) in November 2006. The project will access valuable coking coal reserves to the north of the previous Tower mine. With the commencement of mining at Appin West in the December quarter of 2007, BHP Billiton indicated that it will have access to coal reserves for a further 30 years.