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Whitehaven Coal Limited : Annual Report 2013
15 Whitehaven Coal Limited Annual Report 2013 Ownership: • Whitehaven: 70% and operator, Electric Power Development Co. Ltd 7.5%, EDF Trading 7.5%, Upper Horn Investments Limited 7.5%, Daewoo International Corporation and Korea Resources Corporation 7.5%. Following the installation of the new longwall in June 2012 the Narrabri mine ramped up output in line with schedule over the course of FY2013. Production reached an annualised rate of 5.2Mt on a 100% basis for the March 2013 quarter, within reach of the targeted 6.0Mtpa (100% basis) expected as the operation settles into steady state production. This was an exceptionally strong performance for a new longwall operating in a region with some identi ed technical risks and is a re ection of the detailed planning process developed prior to the installation. Several technical issues were overcome during the year, as is usual in the startup of a large underground longwall mine. Importantly the longwall completed the rst panel in June and successfully achieved the six week schedule to move the equipment into the second panel of the mine. Key technical risks associated with gas drainage and roof caving have been dealt with appropriately and will become part of normal operating practices at the mine. On 28 November 2012 a train carrying Narrabri's coal derailed near Boggabri, damaging a section of line and making the rail line impassable. The Australian Rail Track Corporation (ARTC) undertook extensive emergency repairs to the line and it was re-opened on 20 December. While stockpile capacity was extended at the mine, full capacity was reached during the rail closure period and mine production ceased. Production from the longwall recommenced on 28 December 2012. Unutilised take or pay commitments for port and rail due to the derailment were in excess of $2.5 million. Underground roadway development for the second panel was completed well in advance of the longwall move in June 2013. Development for the third panel was almost completed at the end of the year. The next longwall move into the third panel at the mine is planned for February 2014. As roadway development for the longwall panels is well ahead of schedule the operations team at the mine has reduced the number of continuous miners required for underground development to three units. The result is that one of the continuous miner units at the mine can be stood down for a period leading to a reduction in costs at the mine. Pleasingly, the site's workforce now consists almost entirely of Whitehaven employees who live in the local region, one of Whitehaven's key objectives. This was achieved in part as a result of our Narrabri Trainee Programme which is detailed in section 2.2 of our Sustainability Review. The CHPP struggled throughout the year to reach its design capacity of 1,000tph. However, by the end of the period it was operating consistently in the range of 900tph to 1,000tph. Sedgman, the builder and operator of the plant, is in the process of conducting performance tests at the plant with e ective completion expected in the rst half of FY2014. The original bypass equipment used for the early development phase of the mine has been recommissioned following some modi cations. The circuit which has a capacity of 1,000tph can place coal directly onto the product stockpiles without having to pass through the CHPP. This provides the mine with the exibility to either bypass the entire production of the mine or wash the entire production of the mine, or any combination of both determined by management and market needs. Low ash high CV ROM coal that passes through the by- pass circuit is blended with washed thermal product to increase energy levels to create a product that is sold as a Newcastle benchmark coal. During FY2013 low energy levels in the thermal coal product produced from the CHPP resulted in the coal being sold at a price below the Newcastle benchmark price. There are several potential bene ts that accrue to the mine by using the by-pass circuit. However key objectives are to achieve a higher price for the thermal product and to reduce costs by not having to wash all of the ROM coal produced by the longwall. Another potential bene t is that more high value PCI coal can be produced by the mine in the future thereby enhancing the nancial returns. In FY2014 the mine is scheduled to produce 0.65Mt of PCI coal and about 4.85Mt of thermal coal. Narrabri mine
Annual Report 2012