The Foxleigh mine has become the latest of a new generation of coal mines to be officially opened in Queensland’s coal rich Bowen Basin. The low-capital-cost mine is part of a modern wave of smaller, leaner operations which are playing by new rules.
Other examples of the breed are the Jellinbah East mine and the newly opened Coppabella mine of Australian Premium Resources. Foxleigh, 12km south of Middlemount, is 63% owned by private investment group CAML Resources. Aboriginal and Torres Strait Islander Commercial Development Corporation (CDC) owns 16.4% while the remaining 20.6% is owned by Itochu Coal Resources. Responsibility for coal sales to the Japanese market rests with Itochu.
What is different about mines such as Foxleigh is they are typically contractor run, boast above-average productivity rates, and they often have smallish “niche” type deposits ignored by the major companies. Importantly, capital investment can be one-tenth of what was once deemed necessary to underpin high productivity operations.
While other new generation mines were reportedly developed for $20-30 of capital per annual tonne of production capacity, Foxleigh has come on line on a much lower cost rung. Current planning has the mine initially producing two million tonnes per annum and generating revenues in the order of $80-100 million a year. Considerable potential exists to increase this to 3Mtpa or more, CAML says.
CAML is a private Brisbane-based company owned by four private investors: John Thorsen who is managing director, Paul Darrouzet, Trevor Bailey and Gordon Smith. Each of the four bring a range of coal mining, contracting, human resources and coal marketing experience. Thorsen is a mining engineer who worked previously for Thiess Contractors as mining manager and at Mount Thorley in the Hunter Valley, New South Wales.
“We are coal miners,” Thorsen said. “But we have a good balance of skills and experience.”
CAML began exploration at the known pulverised coal injection (PCI) deposit just two years ago. A 35-year lease was granted on the project in November 1999. The lease is some 14km long and covers 2500 hectares. Current resources are measured at about 100Mt, though this may be revised upward by a further 60Mt in the wake of initial results of exploration work to the south of the current mining lease.
CAML officials say this new development is exciting and could profoundly change the economics of the project. Drilling in the previously unexplored area, a few kilometres from current workings, is along traverse lines at 250m spacings, targeting the sub-crop of the Bowen Basin’s Rangal coal measures. Thorsen said initial data appeared to indicate the coal had “doubled back on itself”, which implied the existence of a synclinal structure.
“If this trend continues there will be a large multiplier in the resource, and will mean we have a large opencut resource and a very large underground resource, potentially in the region of 500Mt,” he said.
About 60Mt of additional resource is indicated in the first 3km of the current exploration work area, and a further 17km is still to be drilled. Thorsen said a lot of drilling had to be completed before the resource could be fully delineated. “First results indicate the coal quality is as good as, if not better than, where we are currently mining,” he said.
Foxleigh is being mined by Thiess Contractors in partnership with CDC under a $100 million, 4.5-year contract. The life-of-mine contract will be reviewed every five years.
“Thiess’ commitment to the project saw the development of mine from site pioneering to coal production and haulage in a record 34 days,” the contractor said in a statement. It added that explosive supply contracts were yet to be finalised and were awaiting final pricing and solutions.
