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Whitehaven Coal Limited : Annual Report 2012
Whitehaven Coal Limited -- Annual Report 2012 17 Subsequent to balance date, the Director-General of the NSW Department of Planning and Infrastructure has issued a recommendation to the Planning Assessment Commission that the project's benefits outweigh its residual impacts and that it is in the public interest and should be approved, subject to a recommended series of conditions. Pending approval, first coal is expected in the first quarter of calendar year 2014, ramping up to annual ROM production of 12 Mt by 2016. Following a detailed review of the Maules Creek project plan, capital expenditure to first coal is now expected to be approximately $766 million (100% basis), an increase of approximately 6% over previous estimates. This is primarily a result of the delay in obtaining development approval. The review also confirmed the expectation of average FOB cash operating costs of approximately A$65/t (excluding royalties). This is a very competitive operating cost structure, largely driven by Maules Creek's relatively low overburden stripping ratio of 6.4 bcm per tonne of ROM coal. This relatively low FOB cash cost, combined with a low development capital cost per annual tonne of capacity and the high value of the saleable coal, confirms the strong economics and substantial value of this project. On 19 June 2012, Whitehaven completed the sale of 10% of its interest in Maules Creek for A$370 million to J-Power Australia Pty Ltd, a wholly-owned subsidiary of Electric Power Development Co., Ltd. (J-Power). Vickery Whitehaven 100% Work continued at Vickery during the year with further drilling in the area to assist in confirming the geological model and mine development plan. Initial mine planning has generated a pit design which produces 164 Mt of ROM coal at a stripping ratio of 10:1. Work is progressing to define an open cut mine plan for Vickery to produce around 4.5 Mtpa ROM for more than 25 years with a stripping ratio of approximately 10:1. Under the plan, Vickery's ROM coal will be trucked to Whitehaven's Gunnedah CHPP for processing and loading, resulting in an efficient use of existing infrastructure and a relatively low capital cost development of Vickery. Ongoing analysis of Vickery coal quality indicates that, if all ROM coal were washed, saleable coal yield would be more than 80% of predominantly low-ash, low-sulphur and low-phosphorus semi-soft coking coal. This saleable coal yield can be increased significantly by by-passing a proportion of low-ash ROM coal, similar to Whitehaven's Tarrawonga coal. This will provide the Vickery project with a high degree of flexibility in producing metallurgical or premium thermal coal, depending on market conditions from time to time. The recent acquisition of Coalworks provides the opportunity for Whitehaven to consider the integration of Coalworks' adjacent Vickery South Joint Venture area, which is owned 49% by Itochu, into Whitehaven's Vickery project. There are compelling operational and economic benefits to be gained from combining these two assets, which Whitehaven is discussing with Itochu. Whitehaven intends to lodge an application for Project Approval for Vickery open cut in the fourth quarter of calendar 2012, with the aim of obtaining approval and being in a position to make a final decision on the development of the project late in calendar 2013. OTHER PROJECTS Whitehaven has interests in a number of other coal exploration projects, including Ferndale, Dingo, Sienna, Monto, Ashford and Oaklands North.
Annual Report 2011
Annual Report 2013