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Whitehaven Coal Limited : Annual Report 2008
Whitehaven Coal Limited - Annual Report 2008 Whitehaven completed the acquisition of a further 60% of the Werris Creek mine in the period giving the Group 100% ownership. Full ownership will provide the benefit of operational and marketing synergies with our other projects. Coal production from the mine was affected by a number of operational factors, but production has now improved through the introduction of a new blasting contractor, a new mine plan and the positive impact of other operational improvements. FY 2008 saleable coal production of 1.11 Mt was 14% below the previous year. However, productivity improvements have been achieved in the last quarter of FY08. Further gains are required and options to improve productivity are being investigated. Further exploration and mine planning has increased coal resources from 26 Mt to 38 Mt, with marketable reserves of 19.9 Mt. This increase in resources and reserves provides Whitehaven with the potential to extend the life of Werris Creek up to 13 years, at the planned production rate of 1.5 Mtpa. Narrabri (92.5% owned) One of the highlights of the year for Whitehaven was the approval of the development application for the Narrabri Coal Project Stage One in November 2007 and the granting of the Mining Lease in January 2008. The project is progressing well, but a delay in gaining approvals to commence construction and the decision to reduce the grade of access drifts have resulted in the date for producing first coal to be revised to the first quarter of FY 2010. Works are well advanced on the site access road, office and workshop area, boxcut, dams and rail loop. Contracts have now been awarded for more than 60% of the Stage 1 work. These include contracts for the supply of initial coal mining equipment; construction of the transmission substation; drift conveyor; train load out facility; rail track components and skyline stackout conveyor. There has been some increase in the forecast capital cost of Stage One caused by higher costs of materials and a decision to reduce the grade of the drifts which will reduce long term operating costs. A drill program has been completed to undertake a detailed evaluation of coal seam gas in the first two longwall panels and further drilling is under way to improve detailed understanding of the conditions of early mining areas. Rocglen (100% owned) Following Planning Approval in May, the Mining Lease for the Rocglen mine was granted by the NSW State Government in June 2008. The Mining Lease allows for the full development of a new open cut coal mine, located 28km north of Gunnedah within the Gunnedah Basin. Rocglen is expected to produce around 1.5 million tonnes per annum of high quality thermal and PCI coal. Construction at Rocglen commenced in June 2008 with a local road upgrade and the development of a 6.2km private coal haulage and access road, site facilities and workshop, coal handling and crushing plant, and a box cut and ramp to access the coal seam. Total construction and development cost is expected to be approximately $35 million, with 30-40 contractors employed during construction and an ongoing workforce of around 50 people during production. Overburden removal commenced in July 2008 and first coal is expected from this new mine in Q2 of FY 2009. 9
Annual Report 2009