Wollongong Resources is considering expanding the Russell Vale coal mine after South32 shelved the Dendrobium plan

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The owner of Russell Vale Colliery near Wollongong has announced plans to expand the mine just days after South32 shelved its Dendrobium proposal.

South32 announced on Tuesday that it would not proceed with its bid to extend the life of the mine under Sydney’s drinking water catchment because it was not generating sufficient returns to justify the investment.

On Friday, Wollongong Resources Chief Executive Officer Greg Pawley confirmed the company would take the opposite approach and hoped to continue mining at Russell Vale for up to a decade.

“We are currently in the process of filing another extension for another five or ten years,” Mr. Pawley said.

“We have worked with the Ministry [of Planning and Environment] about what that looks like.

“We have another 20 to 30 years on our lease, so we only have to work with the community and government agencies in the immediate mining areas to get more permits beyond the first five years.”

Wollongong Resources hopes to expand its Illawarra workforce.(ABC Illawarra: Ainslie Drewitt Smith)

“Small subsidence”

The company, which is a wholly owned subsidiary of Jindal Steel & Power, was recently rebranded from Wollongong Coal to diversify its Australian portfolio.

Last year it received approval to extend the life of its Russell Vale mine by five years using a shelf and pillar extraction method.

Mr Pawley said he did not expect Wollongong Resources to face similar challenges as it uses the less damaging technique of removing “spaces” with coal and leaving “pillars” to support the roof.

“The point to remember is that we propose to use the process we are using now for the life of the mine,” he said.

“Our mining method has very little settlement.

“Recent monitoring of the area as part of our permitting process has shown that the ground over our mining areas has actually risen, not fallen, it has swollen from the rain.”

South32’s proposal had hoped to use the more standard longwall mining method, where a coal wall is mined in a single piece, in its underground operation.

Above ground mine operations including ramps and conveyors
According to South32, expanding its dendrobium coal mine would not yield sufficient returns.(Delivered: South32)

Repeal of SSI Declaration

The technique has been criticized by environmental groups as the cause of water loss from the catchment and was a factor in the independent planning commission’s decision to reject the company’s original proposal.

The state government later took the unprecedented step of declaring the coal project a State Significant Infrastructure (SSI) for its supply of metallurgical coal to BlueScope Steel’s Port Kembla plant.

The planning department confirmed that it is investigating rescinding the SSI declaration.

“While the statement is in effect, a future application of the same nature may be filed,” a department spokesman said in a statement.

Australian Steel Products’ BlueScope chief executive John Nowlan said the company was “fairly confident” that South32 could meet its contractual obligation to supply the steelmaker by 2032.

A middle-aged man wears a blue business shirt, a yellow safety vest and black glasses.
John Nowlan says it is important for Australia to have a competitive coal mining industry.(ABC Illawarra: Justin Huntsdale)

But he said it’s still unclear what the company’s strategy would be after that deadline.

“This is a really important issue for the wellbeing of Australia and our staff, which needs to be taken forward,” Mr Nowlan said.

“What we think is critical is that we continue to have an efficient, competitive local coal mining industry, at least to the point where we can transition to another technology.”

This week, South32 reported record profits of $2.6 billion for fiscal 2022 and said it was likely the $700 million investment in the Dendrobium proposal would flow into its US operations instead.

Increased production

In contrast to South32’s approach, Mr Pawley said Wollongong Resources hoped to build its workforce at Illawarra as it increased production at Russell Vale.

“I have reviewed what we can do at this operation and have determined that there is potential for additional mining areas,” he said.

“It will need another crew, another continuous miner, and it will need staff.

“We may also have additional crews in our business plan for next year.”

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