Anglo American plans to spend US$226 million to extend the life of the Capcoal underground (Grasstree mine) hard coking coal operations in Queensland, Australia.
Development of the Aquila operation, which was placed under care and maintenance earlier this decade due to low coal prices, was set to commence in September 2019, with first longwall production of premium quality hard coking coal planned for early 2022.
Seamus French, CEO of Bulk Commodities, said that Aquila offered a high margin six-year life extension to the Grasstree mine, with an average annual saleable production of 3.5 million tonnes (attributable) of premium quality hard coking coal at a real, post-tax IRR of more than 30 per cent, and an EBITDA margin of 40 per cent at consensus long term prices.
“The project benefits from low capital intensity as we can use the existing infrastructure and systems from our adjacent Grasstree mine that is coming towards the end of its economic life, as well as providing continuity of employment for our workforce,” Mr French said.
According to Anglo American, the company plans to develop Aquila into one of the most technologically advanced underground mines in the world, with features such as a remotely operated longwall.
Using its FutureSmart™ Mining program, which applies innovative thinking and technological advances to address mining’s major challenges, the company intends to pursue remote operation of the Aquila longwall, as well as continue digitising its operations through the use of new technologies such as Anglo’s Australian-first intrinsically safe underground electronic tablets.
The Capcoal complex includes the Capcoal open cut and Grasstree underground operations, both managed by Anglo American. The underground operations are owned 70 per cent by Anglo American and 30 per cent by Mitsui & Co. The Project is also subject to approval by Mitsui.
*Article published in the October-December 2019 issue of The Asia Miner