An eye watering loss
Back to the future as thin seam specialists abandons longwall and plans a 2018 comeback
Wednesday 15 November 2017
Contractor Bounty Mining is likely to be a mine owner by Christmas, following their successful bid of around $40 million for the Cook Colliery and Minyango mining lease from liquidators of the now-defunct Caledon Resources.
The deal - which still has to meet some criteria to be finalised - materialises an eye-watering loss for Caledon shareholder Guangdong Rising Assets Management Company (GRAM) who paid around $400 million for Caledon in 2010.
GRAM chairman Li Jinming at the time said the takeover would be a “significant step forward in the company’s strategy of acquiring more resources investments”.
Bounty mining has historically operated in the Bowen Basin as a thin seam mining specialist using technology developed in the US. However, like so many other contractors, they lost key contracts during the downturn and had since turned their attention elsewhere.
Executive Chairman of Bounty mining Greg Cochrane is a Bowen Basin veteran, telling Shift Miner back in 2013 that this was the fourth mining cycle he had worked through.
Using that experience, he says they now plan to reconfigure the Cook Colliery and develop the Minyango coal project.
“Bounty will bring the Cook Colliery back into production as a more flexible and efficient bord and pillar style mining operation (previously longwall),” he said.
“ Coal production is expected to commence in the first quarter of 2018, and Bounty aims to progressively increase production to a total 1.8 million tonnes of product over 12 months.
“These transactions will provide Bounty with revenue from the Cook Colliery and a mid-term development project in Minyango, for which a mining lease has already been granted.”
While the Minyango underground coal project is still a long way from being operational, it does have potential, with previous mine plans allowing for up to 7 million tonnes of coal exports a year.
However, as former CEO of Caledon Coal Brett Garland told Shift Miner in 2013 when they hatched their plans for a longwall operation, Cook Colliery has beaten many people before.
“The longwall back in the 80s wasn’t real successful, and every man and his dog has had a go at it, and everybody has lost money.
“And we thought, in for a penny, in for a pound, we had better start looking at what we could do.”