13 years more mining
If they don’t sell, significant expansions likely for Rio Tinto
Wednesday 13 September 2017
Rio Tinto’s Kestrel coal mine near Emerald could be around for another 37 years following a 50% increase in the measured ore reserves at the mine.
Rio Tinto announced this week that ore reserves (the economically mineable part of a Measured or Indicated Mineral Resource) at Kestrel have increased from 123 million tonnes to 185 million tonnes.
“The updates are based on a rigorous examination of leases that included an updated geological model, updated mine layout, revised coal product classifications and revised loss and dilution and productivity assumptions,” the company said.
Annual coal production at Kestrel in 2016 was just under five million tonnes, meaning at current extraction rates the mines life has increased from around 24 years to 37 years.
The announcement suggests Rio Tinto is more optimistic about expanding operations at Kestrel than it was in 2015.
That year they warned the Federal government that Kestrel could shut if they didn’t get a mining lease.
The lease in question had already been studied twice by federal environmental regulators, but RTCA volunteered it for a third assessment after the laws governing how close an underground mine could go to subsurface aquifers was amended in 2013.
In its application, RTCA said there was no alternative plan.
"Not taking the proposed action would result in the closure of the Kestrel mine, the loss of significant capital invested in the mine, employment and royalties," the company said at the time.
"There are no alternatives to taking the proposed action; this is because the proposed action contains an economic resource located in a fixed location.
“Accessing this resource from an existing mine avoids the need to construct new surface infrastructure (e.g. coal handling and preparation plant, buildings, stockpiles) and avoids new surface disturbance for this infrastructure."
The application is part of a broader expansion plan that would add around 20 years to Kestrel's mine life, and increase average annual production from around 5 million tonnes to an average of nearly 6 million tonnes a year.
However, the expansion could be someone else's job with rumours that Hail Creek and Kestrel coal mines will be officially put on the market this week.
A fortnight ago Rio Tinto sold their thermal coal mine operations in NSW to Chinese controlled Yancoal for nearly $2.7 billion.