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Bowen Coking Coal commences mining at Bluff

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World Coal,

Bowen Coking Coal Ltd has commenced mining at its Bluff Opencast PCI Mine, taking a significant step forward as it transitions from explorer to Australia’s next independent metallurgical coal producer.

Mining has started at Bluff under an early works programme designed to safely and efficiently prepare the pit for mining before transitioning into a three year mining contract with HSE Mining.

“This is a very proud moment for Bowen,” said Managing Director and CEO, Gerhard Redelinghuys. “The commencement of coal mining at Bluff is a monumental move for the company as we take the major step from explorer to becoming Australia’s next multi-mine coal producer. It is also the culmination of many months of hard work from all involved and I want to thank all our stakeholders for their support, especially the Bowen Board, Management and staff who made this possible.”

Redelinghuys added that Bluff is just the start to the company’s production aspirations with Broadmeadow East, Burton and Isaac River all poised for a start this year as Bowen ramps up towards its 5 million tpy production target over the next two years.

As reported on 15 February 2022, the marketing joint venture (owned jointly by Bowen and M Resources) has secured coal sales contracts with blue chip Asian steel mill customers for shipment from late May onwards in favourable market conditions. The coal produced at Bluff is an ultra-low volatile pulverised coal injection (PCI) coal, which typically attracts a premium in the market for its low ash, high energy and high coke replacement ratio.

Mining operations have commenced with two excavator fleets utilising a 600 t Liebherr R-996 excavator for bulk overburden removal and a 250 t Hitachi EX-2500 excavator for additional overburden removal and coal mining. Initial coal mining is occurring within the existing pit utilising the EX-2500, whilst the R-996 is removing overburden to extend the pit along strike in a southerly direction. Previous impediments on southerly mining have been removed after Bowen paid the full AUS$9.9 million environmental bond to Queensland Treasury, in favour of the Department of Environment and Science (DES). Coal is being extracted during this ramp-up phase with steady state run-of-mine (ROM) production of 80 000 tpm to 100 000 tpm targeted by the end of July 2022, representing an annualised production rate of between 1 million – 1.2 million tpy ROM.

Following recent heavy rains late last year, water management is a critical part of the process to ensure timely access to some areas containing remnant coal in the bottom of the pit. The company has implemented comprehensive water management strategies to de-water the pit in a safe and responsible way, which includes a new temporary water storage dam within a future mining area. As part of the Early Works Program, the company has moved the ROM pad further away from the lease boundary to reduce noise and dust impacts on the community.

HSE Mining Contract

HSE is well known in the Queensland coal industry, and has recently provided services for the BHP Mitsubishi Alliance (BMA) at its Saraji mine and also for BHP Mitsui Coal at its South Walker Creek mine. The company entered into a three year contract (extendable to four years at the company’s election) with HSE to operate the Bluff mine, using their own equipment, staff, systems and procedures under the strategic direction of Bowen. The agreement contains customary terms and conditions for coal mining contracts.`

The recent increase in crude oil prices, coupled with increased labour cost has transpired through the tender process and is expected to result in a 10% to 15% increase in the production costs (excluding royalties) as foreseen in the concept study, whilst still within the +/- 30% accuracy levels stated. However, the increase in the planned production cost is not considered to materially impact the short to medium term margins in this higher sales price environment. Ultra-low volatile PCI (Platts symbol MCLVA00) traded over US$365/t on 7 April 2022. The company is continuing to optimise the mine plan, including the investigation of additional extraction of low-cost coal via auger mining.

Pat Kelly, Chief Operating Officer of HSE, commented: “HSE congratulates BCC on the redevelopment of the Bluff Coal Project and very much looks forward to working with the BCC team over the coming years.”

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Queensland coal news