New mine in the wings
CONSTRUCTION of the Meteor Downs South mine, between Rolleston and Springsure, could be just around the corner.
The project, a thermal coal joint venture of Brisbane-based U&D Coal, and owners of Minerva mine Sojitz, is poised to kick off in the last quarter of this year - pending a suitable transport solution is found.
U&D Coal chief financial officer Peter Edwards said finding a viable transport solution, whether it be by rail, or road, was the only thing standing between them, and starting construction.
"Ideally we would transport the coal on rail loop that we build ourselves, but that solution would delay us by about a year and a half," he said.
"We have to weigh up whether the delay is worth it, or whether we could make a reasonable return on a more expensive transport solution in the first instance."
Sojitz CEO Cameron Vorias said they had just completed a full engineering review of what it would take to build a new rail loop off the Bauhinia line.
"If we get the necessary approvals the rail loop would take about 15 months to construct, but after that it would only be a three to four month construction period before first coal is mined," he said. "If economic conditions were better we'd be looking at constructing the loop as soon as possible.
" It will start at some stage.
"There is a good deposit, and the mine would be a positive for the community."
At a time when most coal mining companies are making cuts, Mr Vorias said he was confident now was a great time to start building.
With three decades in the industry under his belt, and having been through "many booms and many busts", Mr Vorias said it was important to be in the right position for the next boom.
Mr Edwards said while coal prices weren't great, the input costs required to get the mine off the ground were quite low. The strip ratio is also minimal.
Mr Vorias said the majority of jobs created would come out of the construction phase, which would open upwards of 60 jobs.
"We have made a commitment to use the local workforce and source materials locally to the best of our ability," he said.
During the first two years however the size of the workforce would be about 50.
U&D Coal chief financial officer Peter Edwards said they expected to bring the mine online for less than $30million.
Over the expected 10 year lifespan of the mine Mr Edwards expected to strip between one million and 1.5 million tonnes of coal per annum.
Mr Edwards said they were considering blending the coal with product from Minerva, but a final decision had not been made.
The coal will be sold out of RG Tanna port at Gladstone.