Bowen Coking Coal’s emergence as a significant independent Queensland, Australia-based metallurgical coal producer continues to gather pace with the company marking the commencement of production from the greenfield Ellensfield South pit, part of its recently acquired Burton Complex, with clearing and grubbing underway.
In addition to the Burton coal handling and preparation plant (CHPP) and Mallawa Train Load Out (TLO), the Burton Complex includes the Lenton pits, Broadmeadow East (BME) pit and Burton pits consisting of three unmined open-cut deposits; Ellensfield South, Plumtree North and Isaac. Bowen is also exploring further several potential historic pit extensions and additional unmined areas for mining potential in light of the strong metallurgical coal price outlook.
Bowen said an additional excavator fleet from Bowen’s contractor, BUMA Australia, has been mobilized at BME to increase coal production from that pit in the short term, while a further truck/excavator fleet will be deployed at Ellensfield South. A third new fleet is planned to be mobilized at Ellensfield South during the third quarter of CY2023, once sufficient pit-room is made available from boxcut development activities. At that point the Burton Complex will be supported by five large excavator fleets across the initial two pits.
The first Run-of-Mine (ROM) production from the Ellensfield South pit is expected in Q3 CY2023 and is planned to ramp up to a steady-state production rate of between 2 million metric tons per year (mt/y) and 2.4 million mt/y for a period of approximately 3 years, after which the mining fleets are expected to relocate into the larger Plumtree North pit.
The first module of the two-stage Burton CHPP has now been refurbished providing a nameplate ROM capacity level of 2.7 million mt/y. This program included essential work on the TLO facility, accommodation facilities, haul road and the first module of the CHPP. The program was delivered within budget estimates and re-commissioning of the CHPP is well underway. Coal processing has commenced and is expected to ramp up over a period of 3 months, initially washing the significant ROM stockpiles of Broadmeadow East coal, which the company has built up in advance of the CHPP re-opening.
“Turning on the first stage of the Burton wash plant is a very significant milestone for the company,” Bowen CEO Mark Ruston said. “I would like to personally thank Bowen’s site team and our local suppliers who have worked tirelessly to complete this project within budget estimates and accuracies previously announced to the market. A remarkable outcome in these times of rampant cost inflation. We will roll straight into the refurbishment of the second CHPP module and the skyline conveyor at the TLO.”
Refurbishment of the second module of the CHPP, as well as the skyline conveyor system at the TLO will now commence, led by Bowen’s experienced site team of employees and contractors. Completion of this work is targeted by the end of this calendar year, after which the nameplate capacity of the CHPP will reach 5.5 million mt/y.
“Bowen is making great strides at the Burton Complex and delivering on the first phase of our growth strategy to become a significant producer of high-quality, low-ash, and low-sulfur coking coal for global steel production,” Ruston said. “The opening of the Ellensfield South pit is another major milestone for Bowen following first coal sales from the Broadmeadow East pit and Bluff Mine in the southern Bowen Basin last year. Committing to the expansion of Burton capacity demonstrates Bowen’s firm belief in a robust, long-term future for high quality Australian metallurgical coal exports.”
Funding of the stage two CHPP refurbishment (estimated at $18 million) and significant working capital support during the ramp-up of the Ellensfield South pit will be provided though operating cashflows, supported by an amendment to the existing debt financing facility with Taurus Mining Finance.
Coking coal prices remain elevated with premium hard coking coal trading at $321/mt as of March 27, 2023. “At a time when Bowen is significantly ramping up production, we believe that strong coking coal prices will be here for some time to come” Ruston said. “The expected re-entry of China, the world’s largest steel producer, is likely to make up lost ground this year after ending its strict zero-COVID policy, which has previously dampened growth and its associated steel and metallurgical coal demand.”