1.2.3.1.6 China Stone Coal Project

Macmines Austasia Pty Ltd (Macmines Austasia) has proposed to develop the China Stone Coal Project within the southern block of EPC 987 in the northern Galilee Basin (Figure 12). This has been planned as a large scale greenfield operation using both open-cut and underground mining techniques, with an expected 40 year mine life. The site covers about 20,000 hectares and is some 170 km south of Charters Towers, and 190 km north-west of Moranbah in central Queensland. The northern lease boundary of the proposed Carmichael Coal Mine (operated by Adani Mining) lies three kilometres to the south of the China Stone Coal Project.

Of the six most advanced major coal mines proposed thus far for the Galilee Basin, the China Stone Coal Project is the least progressed in terms of required government approvals. An initial advice statement (IAS) was submitted to the state government in 2012 (Macmines Austasia, 2012), and the Queensland Coordinator-General released the Terms of Reference for the project EIS in early 2013. Macmines Austasia is currently in the process of preparing the EIS documentation, but has yet to make its submission. Approval from the Australian Government under the EPBC Act may also be required prior to development, although a referral has yet to be made.

The approximate limit of subcropping coal measures in the south of EPC 987 was ascertained by stratigraphic drilling undertaken by the Queensland Government in 1977. Based on this early work, significant coal exploration drilling and sampling programmes undertaken by Macmines Austasia in 2008 and 2010 led to the delineation of the initial coal resource. As of June 2011, coal resources at the proposed China Stone mine included 286 Mt of indicated resource and 3500 Mt of inferred resource (these resources have been estimated by a Competent Person as defined by the JORC Code). However, additional resources totalling about 9.8 Gt (upper estimate of exploration target) could occur across the entire lease area (Macmines Austasia, 2011). The coal is sub-bituminous, medium rank B, typical of the Late Permian coals in the Galilee Basin.

Although there is only limited information publicly available about the coal resources at China Stone Project, the proximity to the Carmichael mine and the likely strike continuity of the target seams suggests that the resource target probably has similar characteristics. Thus, the main coal resources at the proposed China Stone mine are likely to be hosted in the Late Permian strata of the Bandanna Formation and Colinlea Sandstone. According to Macmines Austasia (2011), the coal seams underlying EPC 987 have a predicted cumulative thickness of about 30 m. These seams occur over a 20 km long strike-length and dip gently to the west about 3 to 5°. There are no major fault off-sets known in the lease area. Also similar to Carmichael, poorly consolidated and variably weathered Cenozoic sediments cover the Permian rocks, with a total thickness of 20 to 100 m.

The initial mine concept plan indicates that open-cut mining operations may be developed in an elongated north-trending orientation that runs parallel with the strike of the target coal seams. This pit design shows a 13 km long main axis, targeting coal from the areas of the lease where overburden is relatively thin, progressing from east to west (down-dip). Stripping of the overburden may involve several draglines in combination with conventional truck and shovel operations (Macmines Austasia, 2012). If the development is approved, proposed full-scale production rates would require multiple mining pits to be concurrently active, with coal probably mined using excavators and rope shovels. Haul trucks and conveyors are expected to be used in combination to transport raw coal to the run of mine (ROM) heaps.

Underground mining activities may occur below the northern and southern ends of the open-cut mine. These longwall operations would likely target the deeper seams down-dip to the west of the pits. Up to four longwalls may operate concurrently once full production begins (Macmines Austasia, 2012). The suitability of the top-coal caving method is also being assessed for upper seams away from the open-cut areas.

Development plans indicate that most of the mine surface infrastructure may be sited in the eastern part of the tenement. This would include the coal handling and processing plant (CHPP), mine infrastructure area (MIA), tailings storage facility (TSF), power station, rail loop and train loading area, accommodation village and airstrip.

If approved, the China Stone Coal Project is expected to have peak ROM coal production rates of about 60 Mt/year. Washing and processing of raw coal on-site is expected to produce 45 Mt of export quality thermal coal. According to the IAS, mine construction may begin in 2015 with the first open-cut coal production in 2017 and longwall production scheduled for 2019 (Macmines Austasia, 2012). The anticipated dates are dependent upon timing of all necessary environmental approvals from the Queensland and Australian governments. If approved, final rehabilitation and decommissioning would occur following the cessation of mining operations.

A number of potential options for rail connections from the proposed China Stone mine to the preferred coal export facility at Abbott Point are currently being investigated. The most likely of these involves connecting the southern part of the mine-site to the proposed east to west rail corridor that the Queensland Government has declared will connect many of the Galilee Basin mines with the existing rail network that services the Bowen Basin near Moranbah (Macmines Austasia, 2012).