Mine Design and Feasibility

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University of New South Wales

School of Mining Engineering

Prepared for

Dr Serkan Saydam

Mine 8150

Mine Design and Feasability

Major Assignment

Prepared by

David G Rolph

3309524

Thursday, 8 September 2011

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Summary

Huntley and Avondale Collieries are existing underground mines in the Illawarra coal fields of New South Wales. Both mines are on care and maintenance at present but with an improved financial outlook, the existing infrastructure and the location of the mines in relation existing coal mining infrastructure, an opportunity to reopen the mines is available. A financial model for the reopening of the mines based on provided economic conditions, historical operating costs and production rates has been generated to aid evaluation as well as a critique of the technical aspects of reopening the mines as provided in project evaluation document.

Contents

Summaryii

1.Contentsiii

1.1.Table of figuresvi

2.Introduction1

3.Description of Huntley and avondale coal mines2

3.1.Mining Process and Systems3

3.2.Mining Operations3

3.2.1.Bord and Pillar Mining4

3.2.2.Development Mining4

3.2.3.Pillar Extraction / 2nd Workings5

3.2.4.Shortwall Mining7

4.Coal Reserves9

4.1.Huntley / Avondale Coal Reserves10

5.Financial Model12

5.1.Cash Flow12

5.2.Costs13

5.3.Revenue14

5.4.Sensitivity Anaylisis15

6.Technical Analysis of Redevelopment Proposal18

6.1.Mining Method18

6.2.Spatial Characteristics of the Deposit19

6.3.Geologic and Hydrologic Conditions20

6.4.Geotechnical Properties21

6.5.Economic Considerations22

6.6.Technical Factors22

6.7.Environmental Concerns22

6.7.1.Subsidence from Mining Activities22

6.7.2.Atmospheric Control22

6.7.3.Waste Disposal Areas23

6.7.4.Workforce23

6.8.Government Approvals23

6.8.1.Mining Lease23

6.8.2.Development Consent23

6.8.3.Local Government Approvals23

6.8.4.Coal Mine legislation approvals24

6.8.5.Environmental Approvals24

6.8.6.Community and Stakeholder Expectations24

6.9.Coal Processing25

6.10.Equipment Selection25

6.11.Coal Transport26

6.11.1.Site Transport of Coal26

6.11.2.Saleable Coal Transport27

6.12.Mine Design and Scheduling Rates27

6.13.Economic Model27

6.14.Current Market and Mining Conditions28

7.Conclusion and Recommendation29

8.References30

9.Appendix31

9.1.Financial Model31

9.2.Total Revenue33

9.3.Total Overhead Costs33

9.4.Total Operating Costs34

9.5.Total Operating Costs34

9.6.EBITDA35

9.7.Capital Expenditure35

1 Table of figures

Figure 1 Huntley Avondale Mining Processes3

Figure 2 Bord and Pillar Mining Method - Five Panel (Source: University of Wollongong)5

Figure 3 Wongawilli System on Two Panel System (Source: AusIMM, 2009)6

Figure 4 Wongawilli System on a Five Panel Heading (Source: AusIMM, 2009)7

Figure 5 Shortwall Mining Method (Source: Hartmann, 2002)8

Figure 6 JORC Code10

Figure 7 Cumulative Cash Flows13

Figure 8 Costs for Project over 15 Years14

Figure 9 Coal Revenue Streams15

Figure 10 Sensitivity Analysis17

Figure 11 University of British Colombia Mining Method Selector19

Introduction

The purpose of this report is to evaluate the reopening of the existing underground coal mines of Huntly and Avondale in the Illawarra Coal Fields south of Sydney, New South Wales. Specifically focusing on the follow aspects;

1. Determine the weaknesses, errors and inaccuracies in the technical basis for the Huntly and Avondale Coal mines as proposed in scenario A;

2. Make recommendations on planning and design issues considering current market prices;

3....
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