Gujarat Commissions Longwall at Wongawilli

The Australian subsidiary of Gujarat NRE Coke Ltd., Gujarat NRE Minerals Ltd., announced during mid-August that it is in the final stages of commissioning of its longwall at its Wongawilli hard coking coal mine near Wollongong, New South Wales. As a result, raw coal production at NRE Wongawilli mine will be expanded to approximately to 1.5 million metric tons per year (mtpy) from 179,000 mtpy during the year 2008-09. Gujarat NRE Minerals Chairman, Mr. Arun Kumar Jagatramka, said the opening of the longwall was excellent timing, with an expected strong increase in demand for Australian hard coking coal, especially from the Indian market.

The longwall mining equipment which last operated in March 2007 has been successfully refurbished with a full overhaul and re-installed at the new longwall face. Gujarat NRE Minerals bought the Elouera mine from BHP Billiton in December 2007, with the company resuming coal production in May 2008.

Gujarat NRE Minerals also operates NRE No.1 coal mine (NRE No.1 Colliery) in New South Wales, which produced 670,000 mt in the 2008/09 financial year. Longwall mining is also due to be introduced at NRE No.1 mine in 2012 with coal production expected to be increased to 3 million mtpy. NRE No1 mine contains 300 million mt of hard coking coal resources. Gujarat NRE Coke Ltd is India’s largest independent producer of low-ash metallurgical coke.

Caption: The New South Wales Minister for Energy Ian Macdonald officially opened the Gujarat NRE Group’s latest Australian mine, NRE Wongawilli Colliery, south west of Wollongong on Australia’s southeast coast with The Chairman of Gujarat NRE Minerals Ltd, Arun Kumar Jagatramka, High Commissioner of India, Her Excellency Mrs. Sujatha Singh, the Consul General of India, Mr. Sujan Chinoy, former NSW Premier, the Hon. Neville Wran and others.

South Africa’s Chamber of Mines Sign Wage Agreement with Unions

The colliery members of the Chamber of Mines of South Africa signed a two year wage agreement with the unions, in terms of which wages increase on average by between 9% and 10%. The unions involved are the National Union of Mineworkers, Solidarity and UASA. The companies are Anglo Coal, Xstrata, Exxaro, Delmas Coal, Kangra, Springlake, Optimum and Siyanda.

The agreement for Anglo Coal, Xstrata, Exxaro, Delmas Coal and Kangra is to increase the salaries of miners, artisans and officials by 9%. For all other employees, except for the entry level employees, the increase will be 10%. Salaries for entry level employees will be increased by 11%. The living out allowance paid to employees will be increased by the same percentage as the salary increase.

Optimum and Siyanda collieries do not have different categories of employees and the salaries of their employees will therefore increase by 9.5%. The salaries of the lower category employees for Springlake will increase by between 9.5% and 10%, whilst those of their miners, artisans and officials will increase by 9%.

Regarding the second year, the salaries of all employees on coal mines will improve on 1 July 2010 by the average CPI plus 1%, with a guaranteed increase of 7.5%.

Commenting on the agreement reached, Dr Frans Barker, who negotiates for the coal mining companies, said he was pleased with the outcome of the negotiations, and both employers and unions had approached the negotiations in a constructive manner. He further commended the union leadership on their professional approach to the negotiations and noted that “The signing of the 2009 coal wage agreement is an historic occasion as this is the first time that Chamber level wage negotiations have been settled without referral to the CCMA”.

Beijing Closing Coal Plants in Environmental Move

China has taken advantage of a drop in electricity demand due to the global financial crisis to speed up a campaign to close small coal-fired power plants and improve its battered environmental record, according to The Associated Press. Authorities have closed a total of 7,467 power plants, meeting a previously announced goal 18 months ahead of schedule, said Sun Qin, deputy administrator of the Cabinet’s National Energy Administration. “This couldn’t be done when power demand was very intense,” Sun said. “Due to this financial crisis, the power generation has slowed down, so we took this opportunity to accelerate the shutdown.” The latest closures will reduce sulfur dioxide (SO2) emissions that cause acid rain by an estimated 1.1 million metric tons (mt) and carbon dioxide output by 124 million mtpy, Sun said. He said the closures involved moving 400,000 workers to new jobs.

NWR Secures Financing

Euler Hermes, the export credit agency (ECA) for Germany recently guaranteed a EUR 141 million nine year loan facility for New World Resources N.V. (NWR), Central Europe’s leading hard coal producer. NWR will use the money to buy five new longwall sets under the second stage of the company’s Productivity Optimization Program (POP 2010).

The loan is being provided by MLAs: Ceska sporitelna (Erste Bank Group), Ceskoslovenska obchodni banka (KBC Group), KBC Bank Deutschland AG and Natixis. KBC Bank Deutschland AG acts as the Hermes Agent, Natixis is the Facility Agent and Documentation Agent. The loan finances 85% of the net purchase price of the longwall sets and the related ECA premium. The facility’s availability period ends in June 2010 and NWR will repay the full facility in seventeen semi-annual linear installments.

NWR is the sole owner of OKD, a.s., the Czech Republic’s largest hard coal mining company and one of the largest producers in Central Europe by revenue and volume. The company produced 12.7 million mt of coal in 2008, 7.4 million mt of which was coking coal.

Australian Miner Makes Bold Predictions for Coal

The economic downturn that has been on the quills of every pen for the past six months is showing signs of abating and, even while experts are still unsure about what the future holds, the Mackay Daily Mercury reported, Ken Talbot, former head of Macarthur Coal and mining magnate, said that the global economy would almost certainly exceed pre crash levels. He added that the next boom would be even stronger than the last one. He said there had been underinvestment in supply and infrastructure and the world will be short of coking coal and energy.

Narelle Pearse, Mackay Area Industry Network’s managing director, did not use the word “boom” herself, but she backed the magnate’s comments. She cited the development of the Galilee Basin, near Emerald, along with numerous BHP Billiton expansion projects that would ensure the region’s prosperity. She said it will contribute to a lot more jobs in mining, but the astronomical wages for contract workers might not return so quickly. “Mining companies will be more conservative to control costs,” Pearse said. “But if all the projects came on board at once, they will all need the workers, so it will be interesting to see what they do.”

Talbot said while the time for investment in the energy sector was now, he would not invest in Australia because coal’s environmental standing was being questioned likely a jab at Prime Minister Kevin Rudd’s Carbon Pollution Reduction Scheme plans. Pearse said developments in the region were still increasing and, from her research, there had so far been little slowdown as coal companies continued to move their projects ahead.