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Switch to proposed mining method unlocks value

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World Coal,

Following the completion of an updated pre-feasibility study (PFS), Australian-based coal development company, Balamara Resources, has reported a “significant improvement” to the project economic parameters of its Mariola 1 thermal coal project in southern Poland.

The key highlight of the revised PFS is the change in mining method from longwall to room-and-pillar, which has raised the after-tax net present value (NPV) of the project from US$312.7 million to US$410 million. This is based on an average production of 2.6 million tpa using the room-and-pillar method with an upfront cost of US$64 million.

The room-and-pillar method will allow for shallower coal seams to be mined that previously anticipated, as well as for several coal seams to be mined simulaneously – something that is not possible when longwall mining. As a result, a further 13 million t has been added to the project, increasing the mine lfte from 15 to 20 yr.

“This significant increase in the economic value of the Mariola project is a testament to our ongoing commitment to unlock further value from our extensive asset portfolio in southern Poland, said Balamara’s Managing Director, Mike Ralston. “The compelling project economics for Mariola 1 justify a rapid development pathway, with this large-scale thermal coal development expected to underpin the first phase of production from our Polish coal portfolio.”

The Mariola project is located in the Upper Silesian Coal Basin, close to existing infrastructure and with 14 operating coal-fired power plants within a 125 km radius. The company has already begun work on the PFR for the Mariola 2 concession, which is located about 4 km from Mariola 1, and expects the commercial potential there to be similar to its neighbour.

The long-term goal is to merge the two concessions into a larger Mariola project definitive feasibility study in 1H16 with completion targeted for 3Q16.

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