US- based coal producer Peabody has taken initial steps to redevelop the company’s North Goonyella mine, a premium hard-coking coal longwall operation in Queensland with more than 70 million tonnes of reserves.
The company’s third quarter report stated that the project would benefit from substantial infrastructure and equipment in place at the mine, including a new 300-metre longwall system, a proven coal handling preparation plant (CHPP), a dedicated rail loop for transport to the Dalrymple Bay Coal Terminal (DBCT), and an accommodation village with housing and service amenities for more than 400 workers.
Peabody president Jim Grech said North Goonyella is expected to reweigh the company’s long-term production and revenue toward metallurgical coal and to generate attractive returns at historical long term metallurgical prices.
The initial $140 million of redevelopment capital expenditure has been approved and includes further ventilation, equipment, conveyors, and infrastructure updates in anticipation of reaching development coal, subject to regulatory approvals, in the first quarter of 2024.
“Cash flows from operations will fund all redevelopment costs as the company continues to strengthen the balance sheet,” Pech said.
“Development costs beyond the current board approved amount are estimated to be $240 million, allowing longwall operations to commence in 2026. Project returns are estimated at approximately 25 per cent, solely for 20mt of longwall production over five years, with further options to develop the remaining reserves.”