Mine ‘last of its kind’ for a long time
PEMBROKE Resources has labelled its $1 billion Olive Downs coal mine in Queensland the last major project of its type for a generation.
The miner will start public consultation on the project soon and development will begin within the next year. It will employ up to 700 people during the construction phase and a further 500 when it starts mining.
Olive Downs is planned to become one of the biggest coking coal mines in the world and will generate billions of dollars for the state economy, according to the company.
"I believe this is one of the last major developments of this generation,'' Pembroke executive chairman Barry Tudor said.
"There's very few opportunities like this if any.'' It will be targeting local workers, rather than fly-in, fly-out miners and the company anticipates royalties to the State Government over the life of the mine will exceed $5 billion.
The Bowen Basin mines have been a huge economic boost for Queensland but another coal executive, XCoal's Ernie Thrasher, told a recent Brisbane mining conference that mining the once-rich seams would get more difficult and more expensive from here on.
But there is still plenty of coal in the Bowen Basin and BHP has started the early environmental approval process on the Saraji East underground mine, which will also employ about 1000 people in construction, but will be about half the size of the massive Olive Downs project.
BHP does not expect to start development until the early 2020s. The project will be an underground mine on its existing Saraji lease. Production is forecast at seven million tonnes a year for a 25 to 30-year life of the project.
Both mines will produce coking coal for the use in steel production and the market for the commodity is currently booming.
Mr Tudor said the Olive Downs project was fully funded in its first stage by Denham Capital. The timeline will mean first coal will be produced by 2020 and Mr Tudor said that was "aggressive but it's realistic''.
The project has few of the problems of thermal coal mines like Adani's Carmichael because there is no replacement for coking coal in steel production. Mr Tudor said it was 90 per cent coking coal, there was no need for extra rail or port capacity, it was an existing basin, there was no strategic cropping land and no contentious flora or fauna.
BHP shares closed up 59¢ at $33.82 on Thursday.