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The Australian Black Coal Industry

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The Australian Black Coal Industry The Australian Black Coal Inquiry Report Industry Volume 2: Appendices Report No. 1 3 July 1998 A CONDUCT OF THE INQUIRY A.1 Introduction This appendix outlines the inquiry process and the organisations and individuals which have participated in the inquiry. Following receipt of the terms of reference on 9 July 1997, the Commission placed a notice in the national press inviting public participation in the inquiry and released an issues paper to assist participants in preparing their submissions. A list of those who made submissions is in Section A.2. The Commission also held informal discussions with organisations, companies and individuals to gain background information and to assist in setting an agenda for the inquiry. Organisations visited by the Commission are listed in Section A.3. In November 1997, the Commission held public hearings in Sydney and Brisbane. Following release of the draft report, the Commission held a second round of public hearings in May 1998. In total, 16 individuals and organisations gave evidence (see Section A.4). A transcript of the hearings was made publicly available. Mr Bill Scales, AO was Presiding Commissioner for this inquiry until 27 February 1998, when he resigned from the Commission. He was replaced as Presiding Commissioner by Mr John Cosgrove from that date. Mr Keith Horton-Stephens and Mr Nicholas Gruen were also Commissioners on the inquiry, but left the Commission prior to the completion of the final report. A.2 Submissions received Participant Submission No. ________________________________________________________________ ACB Consulting Services Pty Ltd 51 ARCO Coal Australia Inc. 21 Asia Pacific Strategy Pty Ltd 1, 38, 50, DR53 Association of Mine Related Councils DR57 A1 THE AUSTRALIAN BLACK COAL INDUSTRY Australian Coal Association 31 Australian Mines and Metals Association Inc. 14 Bach Consulting Pty Ltd 20 Bagot, T. Mr 17, 37 BHP Coal Pty Ltd 30, DR63 Callide Coalfields Pty Ltd 6 Camberwell Coal Pty Ltd 13 Department of Primary Industries and Energy 43 Department of Primary Industries and Resources South Australia 46 Department of Workplace Relations and Small Business 40 Drayton Coal Pty Ltd 48 Durie, R. Dr DR56 Easton Business Consultants 7, 47, DR54 Emerald Shire Council DR62 Exxon Coal and Minerals Australia Ltd 3 FreightCorp 27, DR67 Gladstone Port Authority 10 Joint Coal Board 19, 44, DR59 Leggate, J. Mr 28 Long-Airdox Australia Pty Ltd 5 Michael Minns Human Resources Pty Ltd 8 MIM Holdings Ltd 18 Newcastle Port Corporation 16 NSW Government 26, DR68 NSW Minerals Council 25, 35, 52, DR60 Pacific Power 39, DR55 Port Kembla Coal Terminal 45 Port Waratah Coal Services Ltd 42 Ports Corporation of Queensland 9, DR58, DR64 A2 A CONDUCT OF THE INQUIRY Queensland Government 32, DR61 Queensland Manufacturing Industry Forum 2 Queensland Mining Council 24 Queensland Rail 12, 34, DR66 Rail Access Corporation 23 Rio Tinto Energy 22, 49, DR65 Roberts, I. Mr 33 Ruston, R. Mr (Member Joint Coal Board) 36 Shell Coal Pty Ltd 29 Smith, G. Dr 11 The Allen Consulting Group Pty Ltd 4 Thiess Contractors Pty Ltd 15 United Mining Support Services 41 * DR indicates that the submission was received after draft report. A.3 Visits Australian Capital Territory ABARE Department of Primary Industries and Energy Development Allowance Authority Minerals Council of Australia New South Wales Allied Mining — South Bulli Mine BHP — Elouera Colliery BHP Steel Colleries Division Bloomfield Bulga Mine Camberwell Coal Pty Ltd A3 THE AUSTRALIAN BLACK COAL INDUSTRY Centennial Coal Company CFMEU Coal Operations Australia CRC for Black Coal Utilisation Cummnock Coal Exxon Coal and Minerals Australia FreightCorp Hood, M. Dr JCD Australia Liddell Coal Mt Thorley Coal Loader Muswellbrook Coal Company Ltd Nippon Steel NSW Department of Mineral Resources NSW Department of Transport NSW Minerals Council NSW Treasury Oakbridge Peabody Resources Port Kembla Coal Terminal Port Waratah Coal Services Ltd PowerCoal Rail Access Corporation South Bulga Mine United Colleries Wollongong City Council A4 A CONDUCT OF THE INQUIRY Queensland ARCO Coal Australia Inc. Australian Coal Association Australian Mines and Metals Association Inc. BHP Coal Pty Ltd Burton Coal Project CRC for Mining Technology and Equipment Crinum Mine Emerald Shire Council Ensham Mine Ensham Resources Pty Ltd Gladstone Port Authority Hay Point Coal Terminal MIM Holdings Ltd Newlands Mine Oaky Creek No. 1 Mine Peak Downs Mine Queensland Department of Mines and Energy Queensland Department of Transport Queensland Minerals Council Queensland Ports Corporation Queensland Rail Queensland Treasury Rio Tinto Energy Shell Coal Australia South Blackwater Mine Thiess Contractors Pty Ltd A5 THE AUSTRALIAN BLACK COAL INDUSTRY Victoria Australian Mines and Metals Association Inc. Department of Workplace Relations and Small Business National Competition Council Rio Tinto Energy Western Australia Wesfarmers Coal Overseas — United States and Canada ARCO Coal Company BHP Minerals New Mexico Operations British Columbia Ministry of Employment and Investment Cyprus Amax Minerals Company Cyprus Cumberland Mine Foidel Creek Coal Company (Twentymile Mine) John T. Boyd Company Kennecott Energy Company Los Angeles Export Terminal Inc. United Mine Workers of America Westshore Terminals Ltd A.4 Public hearing participants ARCO Asia Pacific Strategies Australian Mines and Metals Association Bach Consulting Bagot, T. Mr BHP Coal Callide Coalfields Pty Ltd A6 A CONDUCT OF THE INQUIRY Camberwell Coal Easton Business Consultants FreightCorp NSW Minerals Council Ports Corporation of Queensland PowerCoal Rail Access Corporation Rio Tinto Energy Shell Coal Australia A7 THE AUSTRALIAN BLACK COAL INDUSTRY A8 B COAL AND COAL MINING This appendix explains the geological and technical terms necessary to understand the black coal mining industry and its place in the Australian economy. It covers geology, exploration, coal mining and describes the physical characteristics of coal which affect its quality, end use and price. B.1 Geology The geology of a black coal resource has a significant impact on the costs of extracting the coal. The existence of high quality, or abundant resources is not enough to guarantee that mining a black coal seam will be economically viable. For example, the large high quality black coal resources identified in Australia’s Cooper basin will not be mined in the foreseeable future, being too deep to exploit at current prices (sub. 46, pp. 4–5). Coal is found in layers between other layers of sedimentary rocks. The layers of rock are referred to as strata. Layers of coal are known as seams. Layers of rock are formed by sediment building up in low lying areas known as deposition basins. Over millions of years these layers of sediment are transformed into sedimentary rocks under pressure from overlying material. Coal is formed when plant material is covered by a layer of sediment, preventing complete decomposition. The long period of heat and pressure, caused by the weight of the overlying layers, produces chemical changes that force out oxygen and hydrogen, leaving behind a layer of carbon rich coal. Coal seams can be less than a millimetre thick to over 100 metres thick in some locations around the world. The exact nature of a seam of coal has a major impact on the economics of a potential mine. Generally, for any given quality of coal, the thicker the seam and the nearer the seam is to the surface, the less expensive it is to mine. The type of surrounding rock also will affect mining costs, as will the existence of rock mixed up amongst the coal. In addition to the location and the purity of the resource, other geological factors have an important impact on the viability of a coal mining operation. Figure B.1 shows common rock strata formations and the geological terms that are applied. B1 THE AUSTRALIAN BLACK COAL INDUSTRY Figure B.1: Geological formations related to coal mining Folding Deposition Basin Strata Outcropping Fault Igneous Intrusion Seam Splitting Coal Seams Movements in the earth’s crust can create pressure that causes sections of it to concertina. The original horizontal strata become folded and may even become vertical. Where sections of the crust move relative to each other, this pressure can cause faulting. Along a fault, the rock strata will be non-continuous as a result of being lifted, depressed or moved sideways. Mining in the presence of significant faulting poses problems in extracting the coal and in terms of safety as the rock can be unstable. Consequently, the existence of such conditions can impose significant costs on the mining operation. Volcanic activity can cause molten igneous (volcanic) rock to intrude into the sedimentary strata before it cools. Such a process can cause sedimentary layers of rock, including coal seams, to dip rapidly away from the surface and be altered in composition. It also can cause coal seams to split or become disrupted (non-continuous). Finally, weathering and erosion can cause an outcropping or exposure of the coal seam on the surface. Many of the early discoveries of coal in Australia were of outcropping seams in the Newcastle and Illawarra regions. In mining coal, it is common to encounter complications from the above geological processes. In terms of economic viability, complicated mine geology generally means greater costs of extraction and can render even high quality coal resources uneconomic. For example, significant faulting of a coal seam can make longwall mining impossible. Alternatively, favourable geology can be advantageous to a mine, allowing the operation to be highly productive simply through ease of access to a high quality resource. B.2 Exploration Interest in mineral resources has a long history in Australia, beginning with the appointment of geological surveyors in various colonies around 1850. It was as B2 B COAL AND COAL MINING a result of these early surveyors’ efforts that many of the coal fields now in production were first identified. Locating and evaluating a coal deposit is the first step of the mining process.
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