The Australian black coal mining industry has today announced the world's largest whole of industry funding commitment for research, development and demonstration (RD&D) of clean coal technologies aimed at combating climate change.

Australian Coal Association Executive Director Mark O'Neill said that this would be achieved through an expansion of the $300 million COAL21 Fund announced just last year. The scheme’s voluntary coal levy will now be extended beyond the original five year term, and, for example, based on projected industry growth, would result in an estimated $1 billion being raised over the next decade.

The decision has been welcomed by the Queensland Resources Council’s Chief Executive Michael Roche who said that this extension of the voluntary Fund raised the bar for other industries to follow.
Mr. O'Neill said the decision to dramatically increase the amount of funding coal producers would commit reflected the industry's growing confidence in the role clean coal technology can play in reducing emissions, and growing community concern over climate change. It also responds to the increasing emphasis that governments are placing on climate change and the role of clean coal technology.

This should leave no doubt about the coal industry’s intention to partner with State and Federal Governments on nationally significant clean coal projects, Mr. O’Neill said.

These partnerships also needed to include other beneficiaries from Australia’s secure, reliable and affordable coal- based electricity supply. While the coal industry is prepared to play a leading role, power generators, other industries and the broader community all need to share the costs of technological change, Mr. O’Neill said.

Mr. O'Neill noted that black coal producers who had committed to supporting the Fund would all pay the same rate, despite the fact that some produced primarily metallurgical coal used in steel making rather than power generation, and a number of others supplied the domestic power market under long term contracts, often with tight margins.

Mr. O'Neill said that the expanded fund would support nationally and internationally significant projects.

Mr. Roche noted that the industry had already begun a joint assessment with the Queensland Government of a major Integrated Gasification Combined Cycle (IGCC) project with near zero emissions in Queensland where more than half of the nation's black coal is produced.

The industry would commit $300 million from the Fund to support such a project and would continue to work with Queensland to identify the optimal configuration, Mr. Roche said.

Mr. O'Neill said that the industry was also keen to support worthwhile projects in NSW, the other big black coal producing state.

He noted that $70 million from the COAL21 Fund had already been committed to clean coal technology projects, including $20 million to support a Post Combustion Capture (PCC) project in NSW and $50 million to support a world-leading Oxyfuel combustion project at CS Energy's Callide power station in Queensland.

However Mr. O'Neill also said that the development and deployment of breakthrough technologies was primarily a national and global challenge, rather than a state-by-state one. All of the projects we support must make sense in terms of the overall international and national collaborative RD&D effort that is now occurring, he said.

Mr. O'Neill and Mr. Roche called for a nationally coordinated approach to clean coal technology that ensured the most efficient allocation of RD&D resources based on a clearly articulated national plan. This would build on the landmark COAL21 National Action Plan launched in 2004 and raise the level of co-operation between the Commonwealth, the States and industry.

We need a plan to complete the search for secure commercially viable storage sites, capable of many decades of storage, and to determine the optimum matching power station locations and infrastructure to provide a sound platform for large-scale investment in near-zero emissions power. This plan needs to be implemented in parallel with the development of cost-effective CO2 capture technologies, paving the way for major investment in integrated carbon capture and storage equipped power generation.

Such an undertaking needs to be seen as a vital nation-building exercise and will need the cooperation and support of all jurisdictions, Mr. O’Neill said.

Mr. O'Neill and Mr. Roche expressed confidence that the industry would receive credit for its voluntary efforts under any future carbon pricing scheme introduced in Australia, whether through emissions trading or other mechanisms. Credit for this sort of action is an important principle recognised and accepted in every carbon pricing model that has been advocated in Australia over recent years, they said.

They concluded that the Australian black coal industry's extended COAL21 Fund dwarfed any other whole-of-industry climate change funding initiative anywhere in the world. We are committed to playing a key role in meeting this challenge, and are prepared to set the benchmark for other industries to follow.

For further information on the COAL21 fund, including backgrounder, links to projects and technologies:
www.australiancoal.com.au or, for information on COAL21 agenda and technologies www.coal21.com.au or, contact: Doug Holden 0431 006 044 (Mark O’Neill) Caroline Morrissey QRC (Michael Roche) 07 3316 2507 0417 770 893

The 7000 tonne mega machine moved off the construction site on schedule and on budget late on Thursday at the beginning of its week-long walk to its new home.

Ensham’s General Manager Operations, Peter Westerhuis, said the dragline will replace a fleet of smaller shovels to take on the mammoth task of uncovering coal in a new area of the mine where the coal seam is deeper underground.

Ensham Dragline 4 will move 20 million bulk cubic metres (Mbcm) of overburden in 2007 in its commissioning year and 28 Mbcm per year after that.

“That’s more than two of the mine’s existing draglines put together and underscores the sheer size of the Bucyrus 8750-63 and its 110 cubic metre bucket.”

Mr Westerhuis said the decision to build the dragline was made back in 2004 to improve Ensham’s ongoing sustainability and competitiveness in the global steaming coal market by reducing overburden removal costs.

“We’ve had an unusually high dependence on truck and shovel operations to meet our production targets over the past couple of years, but as the coal gets deeper this method is proving inadequate and too costly in moving the sheer volume of overburden which needs to be moved to access the coal.

“We have started planning and discussing with our principal contractor the reduction of truck and shovel fleets that the dragline will replace over the course of 2007 to allow them to redeploy those resources elsewhere.”

Mr Westerhuis said the demobilization of truck and shovel fleets would occur gradually, commencing in February 2007 and winding up around May as the new dragline is properly bedded down. This would reduce the number of contract truck and shovel fleets from eight to five in total. Each fleet employs approximately 35 people including fleet managers, machine operators and maintenance support.

“We hate to see good people go, especially in a time of severe shortages as we are likely to require their services again in the future. However, flexibility is part and parcel of using contractors and I’m sure they will be readily deployed on other projects until we move into our next expansion phase.”

Ensham mine has a total workforce of around 600 people with many of those currently employed by Golding Contractors in truck and shovel operations - most of which will continue once the new dragline is fully operational.

Ensham is employing an additional 20 people full time in 2007 to operate and maintain the new dragline. This is in addition to the 100 contractors who were involved in its construction over the past two years.

Mr Westerhuis added that despite delays in commencing some of Ensham’s future growth projects, Ensham was still committed to its ‘20:20’ vision of marketing up to 20 million tonnes per annum in the longer term, making Ensham one of the state’s largest thermal coal marketers.

Ensham had initially expected to ramp up production considerably in 2007, but a combination of coal price movements, infrastructure constraints, shortages of key inputs, complex new project approvals and internal due diligence procedures had taken longer than expected.

“However, we have just received EPA approval of the Environmental Impact Statement for the Ensham Central Project which includes extensions to our open pit operations and proposed trial mining underground.

“Together with the completion of the new dragline, this is an important milestone for us and we will be pressing ahead in 2007 with our new Mining Lease application and underground feasibility study for the Ensham Central Project which will significantly increase our longer term output.

“Until those approvals are obtained we will be maintaining production around current levels of between eight and nine millions tonnes per annum,” Mr Westerhuis said.

Central Queensland thermal coal producer, Ensham Resources, has completed a comprehensive Environmental Impact Statement (EIS) for its ‘Ensham Central’ Project east of Emerald The EIS will be on public exhibition for six weeks from Monday 3rd July until Friday 11th August at the Environmental Protection Agency’s offices in Emerald and Brisbane. A copy of the EIS is also available on Ensham’s website (www.ensham.com.au). Ensham Resources General Manager - Development, Peter Smith, said the study was the culmination of two years of work and included comprehensive stakeholder consultation and a range of specialist studies including surface water, groundwater, rehabilitation, noise, dust, flora and fauna and socio-economics. Mr Smith explained that the Ensham Central Project involved the extension of open cut operations in the central area of the existing mine and the development of an underground longwall mine, together with upgraded and expanded mine infrastructure. “The Ensham Central project is part of a plan to increase production capacity of the Ensham mine to 20 million tonnes per annum for a period of at least 20 years.” Mr Smith said the Ensham Central project would extend the open cut mine’s life by about six years, providing continuing employment for Ensham’s existing workforce and creating many new jobs during the construction and operation of the proposed underground project.
		Click picture to enlarge
		Click picture to enlarge

“When expanded, we estimate the operation would provide direct employment for more than 800 people in addition to generating another 3,000-3,500 indirect jobs in Central Queensland.

“Obviously a project of this size is a significant investment in the local and regional economy and produces similarly significant State and Federal royalties and taxes plus payments to the state’s rail and port infrastructure providers,” Mr Smith said.

The Ensham Central project follows Ensham’s recent $100 million investment in a fourth dragline to access its estimated one billion tonne high grade thermal coal resource.

Ensham Resources was established in 1993 as a joint venture among major international companies, Idemitsu Kosan, J-Power and LG and their Australian subsidiaries. Since then the company has become one of Queensland’s largest and fastest growing thermal coal producers.

The Ensham mine currently produces around 9 million tonnes per annum of high energy, low ash thermal coal and small quantities of semi soft coking coal. The coal is exported to leading energy producers in Japan, Korea, India, China and other countries.

Subject to gaining the necessary approvals, it is anticipated that development work for the first stage of the Ensham Central Project will commence in 2007.

Further information is available from: Peter Smith, Ensham Resources (07) 3221 1201.

Media enquiries:
Marc Joshi - 0424 649 591

Mr Pegler was speaking during a welcoming address to around 500 industry representatives and invited guests at the Brisbane Convention Centre. The event also marked the official launch of the recently formed Queensland Minerals & Energy Academy (QMEA) by Premier Peter Beattie.

Among the guests were representatives from some of the 19 secondary schools from around the state which have signed up as foundation members of the QMEA.

Mr Pegler said the QMEA was an outstanding example of Government and industry working together for the good of regional communities, the State of Queensland and the Australian economy in general.

Although only formed earlier this year, the QMEA has already delivered results, with an intensive advertising campaign on regional television changing awareness and attitudes among high school students and young high school leavers towards the mining sector.

This has translated into a 40% surge in enrolments in mining degrees at the University of Central Queensland and by a similarly impressive 20% at the University of Queensland.

“I am not going to pre-empt the Premier’s official launch of the Academy, other than to say, you we will all be hard-pressed to find a better example of a Smart State in action,” Mr Pegler said.

Mr Pegler also acknowledged the industry’s partnership with the government to establish and fund a world class Mining Industry Skills Centre in Mackay.

“The Skills Centre and the Minerals and Energy Academy are shining examples of how a cooperative approach can deliver both skilled people for industry and positive outcomes for the whole community.

“These initiatives will increase the pool of talent available to the resources sector. They will also increase the pool of talent available for other employers in regional Queensland.”

Mr Pegler said the QRC prized its close working relationships with Queensland’s universities and played a pivotal role this year in rescuing the minerals processing degree program at the University of Queensland.

“The implications for Queensland of the collapse of tertiary programs in mining and metallurgical engineering in the midst of unparalleled demand for these engineers would be frightening indeed,” he said.

Mr Pegler emphasized that winning the next generation of employees at every level was the greatest social and economic imperative for the resources sector and government.

“If we fail, the human capacity to operate our industries will languish. In turn, the sector will languish along with its underpinning of Queensland’s economic outlook and social agenda. The statewide impacts of a successful resources sector are well known.

“I am sure the Premier would be the first to acknowledge that his government’s ability to mount a timely and substantial financial response to the challenges in the public health system owes much to the long-term growth outlook for the resources sector, given the royalties of more than $1billion the sector provides each year,” Mr Pegler said.

At the same time, Mr Pegler acknowledged the strong support shown towards the mining and energy sector personally by Premier Peter Beattie - who has attended every QRC lunch since his election to office in 1998.

“The maturity and breadth of our political relationships is something that we are proud of, and we will continue to build upon them. There should be no community leader in Queensland unaware of the vital role performed by our industries.”

Mr Pegler pointed to a range of Queensland Government initiatives such as the provision of much needed infrastructure as one of the keys to the industry’s competitiveness now and in the future.

“The government is to be applauded for its commitment to the expansion of port facilities in Gladstone and examination of new rail corridor options.

“Maintaining industry competitiveness is the basic challenge. Infrastructure master planning and coordination hold the key to the effective utilisation of what we have and the timely triggering of investment in what is needed to avoid bottlenecks and improve supply chain efficiency in the future,” Mr Pegler added.

Along this vein, Mr Pegler made no apologies for QRC’s position in continuing to champion the interests of industry and the well being of the 85,000 Queenslanders who earn their living from the minerals, metals and energy sectors.

“We will continue to assess government initiatives and decisions on their merits. We will continue to advocate our position on government policies fearlessly and when warranted, publicly. “For example, it may make for an interesting picture, but a queue of idle coal ships is not a good look for the coal industry or Queensland.

“Water is also vital to the resources sector. We value it to the extent that, on average, every unit of water on a mine site is used seven times. Our frugality is a blessing, but should not be seen as a substitute for equitable access to water through a transparent management process.”

During 2005, the QRC expressed concerns over the Wild Rivers legislation passed by the Parliament in September, in particular its potential to impact on the northwest and Cape York.

“We know these regions are highly mineralised, but to what extent and how valuable they are to this or future generations is a moot point if they are declared ‘off-limits’.”

However, Mr Pegler remained positive that the good working relationship with government would continue. “We appreciate Minister Palaszczuk’s assurance that every wild river nomination will be assessed against strict criteria,” Mr Pegler said.

While there were no certainties of timing in commodities markets, Mr Pegler said it was nonetheless evident that QRC member companies are continuing to invest billions of dollars in Queensland for the long haul because of the global competitive advantage they see now and well into the future.

This is evidenced in the enormous contribution the resources sector makes to the economy of Queensland as shown in the accompany statistics:

Resources industry snapshot:

Value of exports (2004-05): $14.3 billion	Wages and salaries: > $2 billion pa
Royalties (2005-06 est.): $1.36 billion	Community programs: > $20 million pa
Industry local spend: > $4 billion pa

Media information: Marc Joshi - 0424 649 591

Ensham established a new world record price for thermal coal when Goldings principal, Cyril Golding, paid $US3750 (approximately $AUD5000) for one metric tonne of coal during the Ensham sponsored Coaltrans gala dinner reception in Brisbane. Proceeds from the sale have been donated to the Royal Flying Doctor Service.

In awarding the certificate of title, Ensham CEO, John Pegler, said Golding Contractors Pty Ltd has been a fundamental part of Ensham for all of Ensham’s 50 million tonnes and so it was particularly significant to have celebrated the occasion with Mr Golding, one of the many honored guests at the dinner.

Mr Goldings has been provided with an encased nugget of Ensham coal as a memento of the occasion, together with a Certificate of Title to One Metric Tonne of Ensham Thermal Coal, deliverable in Gladstone on demand.

Mr Pegler said the Ensham partnership with Goldings had contributed enormously to the sustainability of Ensham’s coal mining operations and provided significant employment and economic benefits for the Gladstone, Rockhampton and Emerald communities.

The dinner at ‘The Woolshed’ in Ferny Hills was held to celebrate the production of Ensham’s 50 millionth tonne of coal and to mark the staging of the international Coaltrans conference in Brisbane for the first time.

Ensham Public Affairs spokesman, David Petrikas, said one of the highlights of the evening was the charity auction of Ensham’s 50 millionth tonne of coal and other memorabilia in support of the Royal Flying Doctor Service.

“The winning bid of $5000 for Ensham’s 50 millionth tonne was made by Cyril Golding of Goldings Contractors which operates a coal mining fleet at Ensham’s mine east of Emerald. Mr Golding was also the winning bidder on a $3500 hand painted Aboriginal boomerang,” Mr Petrikas said.

Other sales included an Aboriginal painting completed during the dinner by noted Aboriginal artist, Arthur Conlon which fetched $5000 and two framed Wallabies jerseys and a boardroom dinner donated by Société Générale’s Australia Branch which together fetched $7000.

Former Australian Wallaby and Rugby World Cup Team Captain, Nick Farr-Jones who is now the Managing Director of Mining Finance at Société Générale in Sydney, was also the special guest for the evening.

Farr-Jones entertained around 220 guests with amusing anecdotes from his days in the successful World Cup winning Australian Rugby team in the late 1980’s and early 1990’s.

Ensham CEO, John Pegler, said it was very pleasing to see such strong industry support for the Royal Flying Doctor Service which plays a vital role in providing emergency medical services in regional areas.

The dinner also showcased local culture to national and international visitors and included a journey aboard a Queensland Rail heritage steam train, an Aboriginal dance performance and sheep shearing demonstration.

Ensham which has been producing coal at its Emerald mine since 1993 was also the Gold Sponsor at the Coaltrans Australia 2005 Conference held on Thursday and Friday September 15 and 16 at Brisbane’s Sofitel Hotel.

Coaltrans is a gathering of Australia's coal industry leaders together with national and international coal consumers, traders, analysts and shippers.

A highlight of the two day event is a gala reception and uniquely Australian bush dinner for local and international delegates at The Woolshed, in Brisbane’s Ferny Hills.

The industry dinner is being hosted by Central Queensland coal producer, Ensham, and will feature the auction of memorabilia marking Ensham’s 50 millionth tonne of coal produced from its open cut coal mine near Emerald. Proceeds of the auction will be donated to the Royal Flying Doctor Service.

Special guest for the evening will be former Australian Wallaby and World Cup Rugby Captain, Nick Farr-Jones, who is now the Managing Director Finance of Société Générale’s Australian Branch.

Adding to the Australiana flavour of the evening, guests will be transported to the Woolshed aboard a Queensland Rail heritage train and treated to an Aboriginal cultural dance performance.

Ensham CEO, John Pegler, said Coaltrans Australia was an important event for Australia which is currently the world’s largest coal exporter.

“While we have seen huge growth in coal exports which has been positive for both producers and Australia’s balance of trade, there are a number of issues which need to be tackled to protect the competitiveness of this important industry.

“For example, there has been a dramatic increase in costs coupled with a critical shortage of key inputs to the sector, notably skilled labour and supplies such as tyres for mining trucks which are virtually unprocurable.

“If we order a new dump truck now the manufacturers cannot guarantee that they can supply it with tyres on it. There is also a shortage of mining professionals to sustain the current rate of growth,” Mr Pegler said.

Externally, growing environmental pressures were fuelling industry efforts to introduce cleaner burning coal technologies and initiatives focused on the sustainability of coal mining operations, protection of the natural environment and support for regional communities.

A copy of the conference program is available at:
http://www.coaltrans.com/default.asp?Page=13&eventid=ECK112

Coaltrans is Australia's premier coal industry event featuring the coal industry's key producers, consumers, traders, analysts and shippers. The delegates will attend a two day conference at the Sofitel Hotel Brisbane and take part in field tours of the Bowen Basin Coal fields and NSW Hunter Valley.

Thursday’s conference will open with a session on New Developments in the Australian Coal Sector chaired by Chief Executive of the Queensland Resources Council, Michael Roche.

The key note address titled: “A Smart Future for Coal” will be delivered around 9:00 am on Day 1 by Deputy Premier and Minister for Finance, State Development, Trade and Innovation, Anna Bligh.

The Deputy Premier will be followed by Ensham CEO and President of the Queensland Resources Council, John Pegler, who will speak on the Critical Success Factors for the Australian Coal Industry.

According to Mr Pegler, Australia is currently the world's largest coal exporter, producing almost one third of global coal exports. Coal is Queensland’s most important export commodity, earning more than $10 billion annually and accounting for around two thirds of Australia’s total coal exports.

“Coal is estimated to generate close to $1 billion annually in State Government Royalties and is a major driver of the state’s regional development and in particular it’s rail and port infrastructure. In spite of this and widespread perceptions of ‘boom’ times, many challenges lay ahead for the continued prosperity of this important export industry,” Mr Pegler said.

The conference will feature a number of other coal industry leaders who will speak on the overall outlook for the coal industry, key constraints such as rail and port bottlenecks, increasing international competition for metallurgical (coking) and thermal coal and other important industry issues including climate change, CO2 capture and storage and cleaner coal burning technologies.

A highlight of the event for many will be the conference dinner on Thursday evening featuring an Australian bush theme and uniquely Australian entertainment in an authentic setting hosted by Queensland’s Ensham Resources.

Information on the conference is available from Faye Priestley: fpriestley@euromoneyplc.com.

 

The Governor was accompanied by her husband, Mr Michael Bryce and aide, Ms Miranda Mason. The Mayor of Emerald Shire, Ald Peter Maguire, also joined in the tour.

During her tour, Her Excellency met with a variety of mine personnel, toured Ensham’s pit operations and inspected at close hand Ensham’s major mining equipment including a 190 tonne dump truck and a large dragline – one of three currently operating at the mine.

General Manager of the Ensham Mine, Peter Westerhuis said he was delighted and honoured to host the Governor at Ensham during her visit to Emerald.

“I understand Ensham is the largest open cut mine the Governor has visited and we were very proud that Her Excellency chose to visit our operation.

“Coal mining is an important part of the Central Highlands and is a major regional employer and wealth generator for the State of Queensland.

“Ensham is one of the largest independent thermal coal producers in Queensland and is planning to extend its operations with a feasibility study into a future underground mine and the proposed expansion of our pit operations through the Ensham Central Project.

“We are also in the process of commissioning a new $100 million dragline – one of the world’s biggest mining machines and one of few similar machines operating in Australia.”

Photos (please click to enlarge):

Trine Barfod Jensen P (07) 33 25 26 65 M 0412 412 814 E tbjphoto@bigpond.net.au
 

Media Enquiries: Marc Joshi - 0424 649 591