Jellinbah extends Lake Vermont coking coal mine

Private-sector Australian coal producer Jellinbah has signed a A$2.5bn ($1.7bn) contract to continue mining at its 8mn t/yr Lake Vermont hard coking and pulverised coal injection (PCI) grade coal mine in Queensland for another five years.

The company has agreed to extend Australian contractor CIMIC's contract to provide all mining services at Lake Vermont for five years from 1 January 2022. The deal follows Jellinbah's successful application for environmental approval to expand the mine by extending its lifespan until 2045. It includes a commitment by CIMIC to provide autonomous drilling services and semi-autonomous dozer push applications.

Automation is becoming increasingly popular in Australian open-cut coal mines, with UK-Australian resources giant BHP implementing it across its BHP Mitsubishi Alliance (BMA) and BHP Mitsui (BMC) joint ventures. Automation is commonly used in iron ore mining operations in Western Australia, where it has improved productivity and cut costs. Australian coal mining firms are highly focused on costs, as low prices push some to an operating loss.

Argus last assessed the low-volatile PCI price at $69.40/t fob Australia on 9 July, down from $121/t a year earlier. It assessed the premium hard low-volatile coking coal price at $115.59/t, down from $189/t a year earlier.

Jellinbah mined 9.4mn t of hard coking coal and PCI at Lake Vermont in the July 2017 to June 2018 fiscal year, up from 8.8mn t in the previous year. It owns 70pc of the mine, with Japanese trading houses Marubeni and Sojitz and North American investment firm AMCI each holding 10pc.

The firm also owns 70pc of its namesake 5mn t/yr Jellinbah coal mine in the Bowen basin, with Marubeni and Sojitz each holding 15pc. This mine produced 5.3mn t of coal in 2017-18, up from 5.1mn t in the previous year.

By Jo Clarke