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TABLE 1. AUSTRALIAN COAL MINES, 30 JUNE 1980
(Source:Joint Coal Board)
The Joint Coal Board (1981) reported that, at the end of June 1980, there were 133 operational coalmines in Australia distributed as shown above. Of the 133 mines, 98 were underground and 35 open-cut mines. The location of mining areas is shown in Plate 39.
The importance of open-cut mining to the industry is well illustrated by the fact that in 1980 five open-cut mines produced 19.0 million tonnes (Mt) of saleable coal or almost 25 percent of total Australian production. The remaining 1 28 mines produced a total of 57.3 Mt. It is expected that this trend will be further accentuated when large open-cut mines like Gregory and Norwich Park work up to full capacity.
The five mines referred to are the Goonyella (3.6 Mt saleable coal in 1980), Peak Downs (3.7 Mt), and Saraji (3.9 Mt) operations of Central Queensland Coal Associates (CQCA), the Blackwater mine (3.8 Mt) of Utah Development Co. in Queensland, and the Ravensworth mine (4.0 Mt) operated by Costain Australia Ltd for the Electricity Commission of Ness South Wales.
Underground mines were the dominant producers of coal until 1974, when, for the first time, almost half the annual production of raw coal was from open-cut mines. Although the proportion of coal won by open-cut methods had been rising for many years a sharp increase occurred in 1972, as new mines in Queensland came on stream and worked up to full capacity. In that year an extra 10.5 Mt of open-cut coal was produced and the open-cut share of production rose from 30 to 40 percent. A similar but smaller increase in open-cut production and a reduction in underground production in 1974 increased the open-cut share of production to almost 50 percent. Since 1975, the relative proportions of underground and open-cut have stabilised. remaining steady at a little more than half for open-cut coal.
Over the last decade New South Wales, Queensland, and Western Australia have produced coal from both underground and open-cut mines. In New South Wales most coal has traditionally come from underground mines and that situation still prevails, although on a raw-coal basis their contribution has fallen from 92 percent in 1970 to 72 percent in 1980. In Queensland the reverse applies:
open-cut production has been dominant and is becoming increasingly so. The proportion of total pro production won by open-cut mining in Queensland has risen from 70 percent in 1970 to 88 percent in 1980. A similar situation prevails in Western Australia where the proportion of production supplied from open-cut mines rose from 61 percent in 1970 to 80 percent in 1980.
The ability of the Australian coal industry to increase coal production in response to increasing demand was based largely on the following factors: the advent and growth of open-cut mines, the advent of mechanised mining, particularly in underground operations, and the existence of large unexploited resources.
Coal mining in Australia was essentially a manual operation until the mid-1930s. Most early mines were dug into coal seams from surface exposures, the coal being recovered by pick and shovel. The coal won was carried or pushed in trolleys to the surface, or to the bottom of a vertical shaft or inclined shaft and then hoisted to the surface. Some burden on the miners was removed with the introduction of pit ponies to haul coal.
Historically most of Australia's coal production has come from underground mines. From pick and shovel operations of limited production, these mines have been transformed by mechanisation to highly sophisticated operations capable of high rates of production. The most important development in underground mining has been the advent of machines for continuous and longwall mining.
Most underground coalmines in Australia use variations of the bord-and-pillar system of mining which, although theoretically capable of recovering all the coal, in practice usually recovers only about 60 percent. Continuous-mining machines are used in the bord-and-pillar system to break and extract coal from the working face, which is about 10 m wide, and load it into shuttle cars for transport.
Longwall mining is not widely used in Australia but its use is expected to increase. While it may be possible to achieve 100 percent coal recovery by longwall techniques it is generally considered that, with good mining conditions, a maximum recovery rate is about 90 percent. The longwall miner shears coal onto a conveyor from a working face 100-200 m wide.
One of the main advantages of the longwall system therefore is that it allows greater recovery than the bord-and-pillar system. To achieve maximum benefit from a longwall unit the coal seam should be of uniform thickness and not have any geological discontinuities, e.g. faults, or intrusions. Continuous miners, on the other hand, are able to mine coal more efficiently from seams affected by such discontinuities.
The introduction of high-capacity mechanised mining has meant that all material in the coal seam at the working face is mined. Consequently any stonebands or other impurities are mined along with the coal. Because it is usually not possible to separate such impurities at the working face, they must be removed later if the coal is to meet specifications.
Coal as mined is referred to as 'raw coal'. Raw coal is crushed and usually washed to remove the impurities. The largest coal preparation plants currently in use are able to process up to 2000 tonnes/hour. The Joint Coal Board reported that at the end of June 1980. coal producers in New South Wales were operating 35 washeries and that two additional plants were in operation at Port Kembla and Newcastle steelworks. In 1979 in Queensland 9 washeries serviced underground mines and 9 open cuts. The only other washery in Australia is a small plant servicing the Duncan mine in Tasmania. Once the coal has been crushed and washed the upgraded product is referred to as saleable coal.
The black coal industry has always been a large employer, but the level of employment compared to production reflects the impact mechanisation has had on the industry.
In 930 there was an average of 27,528 people employed in the black coal industry and production was slightly more than 9.5 Mt. By the end of 1980 employment was 27,591, yet production of raw coal for 1980 had risen to 93.4 Mt.
Employment levels in the industry have undergone several long-term fluctuations over the last fifty years, in response to a variety of social, economic, and technological pressures. From the high level in 930 the Great Depression resulted in numbers falling to slightly less than 21,000 in 1931 and to 17,687 by 1935. From just before to just after World War lithe increased demand for coal raised employment to a stable level of about 22,300.
In the late 1940s and the first half of the 1950s the demand for coal continued to rise in response to the post-war reconstruction and development boom. Employment in the industry grew strongly as a consequence, peaking at 27,135 at the end of December 1952 and 27,028 in June 1954.
By 1956 the first impact of oil as a substitute for coal was being felt. Production of coal stagnated in the late 1950s and grew only slowly in the first half of the 1960s. The effect of this slackening in demand and the progress made in mechanisation of mines was dramatic. Employment fell below 20,000 and for most of the 1960s was around 15,000 to 16,000.
The first three years of the 1970s saw some increase, with employment rates of about 18,500. The remainder of the 1970s saw a steady growth in employment. Perhaps the most important factor in bringing on this changed position was the increasing demand for coking coal by the Japanese steel in industry. Although the demand for coking coal slackened, the impact of oil crisis of 1973 and the sub subsequent uncertainty of supplies resulted in renewed demand for thermal coal, which has ensured steady growth in employment.
Production, exports, and consumption
A statistical summary of Australian black coal production and trade since 1951 is given in the following Table 2 and Plate 40.
From 1799, when mining first began, to the end of 1980, over 1,963 Mt of coal was won. Despite some short-term setbacks, as occurred during the depression years of the 1930s, production has increased steadily.
Black coal production statistics are presented as tonnes of raw coal and tonnes of saleable coal.
Until 1949 raw and saleable coal were virtually the same, but social, economic, and technicality factors since then have resulted in a lowering of the proportion of saleable coal produced from raw coal.
Three distinct phases can be delineated in the production of raw coal since 1951; a slow increase from l951 to 1959 (average increase 0.34 Mt/year), a faster increase from 1960 to 1967 (1.67Mt/year), and a still faster increase from 1968 to 1980 (3.91 Mt/year). The second and third phases both reflect increased demand from the international market. The corresponding growth figures for sailable coal are lower, reflecting the increased tonnage of mined coal being discarded as washery reject material The average growth was 0.22, 1.36, and 2.95 Mt/year for each phase. Strikes in 1980 ad adversely affected production; otherwise the third-phase averages would have been higher.
Accelerated growth of production in 1960–67 can be attributed to increased demand for coking coal from the Japanese steel industry, but for 1968–80 the situation is more complex. Until the early 1970s, increased demand for coking coal for steel production, particularly in Japan, continued to be the main factor. The effect of a faltering in the rate of growth of world steel production in the mid-1970s was offset by increasing demands for thermal coal and diversification of markets for coking coal. Demand for thermal coal was the direct result of the 1973 quadrupling of oil prices, causing many tries and energy-intensive industries to turn from oil to coal.
Exports of black coal have increased consistently from 1960 to the present. From 100,000 tonnes exported in 1951, exports grew slowly to 795,000 tonnes in 1959. For 1960 the figure was 1.6 Mt. valued at $13 million, and for 1980 it was over 42 Mt, valued at $1,684 million. Although the relative importance of Japan as a market for Australian coal has declined in recent years, in 1980 that country still took over 69 percent (29.3 Mt) of the coal exported from Australia. The Republic of Korea and Taiwan Province were the next most important customers, taking 5.7 percent (2.5 Mt) and 4.4 percent (1.9 Mt) respectively.
Though the growth in Australia's consumption since 1962 has been consistent, it has not matched the growth in exports. Exports have increased to over 420 times their 1951 level, but domestic consumption has only doubled in the same period, rising from 17.6 Mt in 1951 to 36.4 Mt in 1980. It was not until 1973 that the tonnage exported surpassed the tonnage consumed in Australia.
The electricity-generating industry is by far the largest consumer of coal in Australia. In 1980 it accounted for 67 percent of all coal used whereas the iron and steel industry accounted for only 22 per cent. The equivalent figures for 1970 are: electricity generation 51 percent, and iron and steel industry 32 per cent. New South Wales, the major consuming State, used over 23 Mt (64 percent) of all coal consumed in Australia in 1980, most of it for electricity generation.
It is expected that domestic consumption will continue to increase, but the growth rate will be dependent to a large extent on developments in the aluminium-smelting and cokemaking industries.
TABLE 2. BLACK COAL IN AUSTRALIA: PRINCIPAL STATISTICS
Australia's demonstrated economic resources of black coal are 50.4 x l09 tonnes in situ. Of this total only 28.7 x l09 tonnes is regarded as being recoverable with currently available technology and prevailing economic and social constraints. Queensland and New South Wales together have over 98 percent of the country's in situ demonstrated economic resources. An outline of Australia's demonstrated economic resources is given in Table 3.
Resources currently less well known geologically ('inferred resources') total 477 x 109 tonnes, of which 273 x 109 tonnes is considered to be recoverable. Any coal deposit included in this category re quires further testing by drilling, etc., before it can be classified as a demonstrated resource.
As a result of renewed interest in coal as an energy source in recent years and the consequent in crease in exploration, the level of demonstrated economic resources has increased substantially. From 34.7 x l09 tonnes in 1975 it rose to 50.4 x l09 in 1980. It is relevant to note that this increase (15.7 x l09 tonnes) is 30 times larger than the total amount of coal mined in that period (0.522 x l09 tonnes).
TABLE 3. AUSTRALIAN DEMONSTRATED RESOURCES OF BLACK COAL
Thus Australia's total demonstrated-plus-inferred resources are 527 x 109 tonnes, of which just over 9 percent is demonstrated. The fact that there is detailed information available on such a small proportion of Australia's resources suggests that it is most important that exploration continue at a rate at least equivalent to that achieved in recent years. This point becomes all the more significant when the projected growth in both exports and domestic consumption is considered.
Over half the currently known inferred resources are in the Sydney Basin; however, very little work has been done on the estimation of inferred resources outside New South Wales. Although no concerted attempt has been made to estimate Queensland's inferred resources it is most probable that they would at least equal those of New South Wales.
The Bowen and Sydney Basins are the main regions which inferred resources will be upgraded to demonstrated resources. There are, however, other regions in most States that have the potential to contain considerable tonnages of demonstrated resources. In Queensland. outside the basins from which coal is currently being mined, the most prospective area is the Galilee Basin. The Queensland Department of Mines (1981) reports the quantity of demonstrated resources in the Galilee Basin as 800 Mt, located near the township of Alpha. Substantial but unquantified resources occur in the basin several hundred kilometres further north near Hughenden. Despite the remoteness of the Galilee Basin in comparison with the Bowen Basin, future exploration will almost certainly add considerable tonnages to Australia's demonstrated economic resources.
In South Australia the most prospective area for increasing the level of demonstrated resources is the Arckaringa Basin, although it is unlikely that this coal will be economically recoverable in the near future. The Department of Mines & Energy (1980) reported demonstrated resources of 600 Mt, with considerably larger inferred resources. Continuing private exploration has suggested that substantial tonnages occur to the north of the presently known Lake Phillipson deposit.
Considerable exploration has been carried out in Western Australia, and the prospects for increasing the State's demonstrated resources are good. There is a strong possibility that any coal discovered in these areas may not be economically recoverable in the near future. Both the northern and southern parts of the Perth Basin appear to have good prospects for the proving of deposits. Encouraging inter sections of coal have been encountered in drillholes in the Canning Basin in the Derby region and further exploration could well delineate substantial deposits at these locations.
Coal occurrences are widespread in Tasmania, but in many areas of interest exploration and exploitation are hindered by the coal's being covered by hard igneous rocks. Recent exploration has indicated that the delineation of small but locally significant deposits will add considerably to Tasmania's demonstrated economic resources.
The areas discussed above are those considered most likely to have inferred resources upgraded to demonstrated economic or sub-economic resources in the next decade.
In addition to the demonstrated economic and inferred resources Australia has substantial but generally not well delineated resources of deeply buried coal. Included in this category is 130 x 109 tonnes in the Sydney Basin, and the South Australian Department of Mines & Energy (1980) have noted the presence of as much as 3000 x 109 tonnes between 1,400 and 4,000 m deep in the Cooper and Pedirka Basins. Although there is no prospect of these resources being utilised in the foreseeable future those in New South Wales may ultimately be recovered by underground mining. The deep resources in the Cooper and Pedirka Basins, towards the centre of the continent, will probably only ever be utilised if adequate technologies are developed for in-situ processing such as gasification.
Australia's coal industry in the world context
Australia was the world's ninth-largest producer of black coal in 1980, with about 3 percent of total world production of saleable coal. Of the coal traded internationally in 1980 Australia provided 42.3 Mt. making it the second-largest exporter after USA (Table 4).
Most of Australia's strength in the international coal trade is derived from its ability to produce far more coal than is required for domestic consumption. In 1980 Australia was able to export 55 percent of total saleable production. The only other country able to achieve a percentage close to this level was Canada with 49 percent, but it must be remembered that Canada also imports large tonnages of coal.
On estimates currently available Australia has 4 percent of the world's in-situ demonstrated economic resources and 6 percent of the world's recoverable demonstrated economic resources. However, very large inferred resources, which ultimately are likely to be economically mineable. are known to occur in both Queensland and New South Wales.
The increasing cost and potential shortage of petroleum will, in the future, result in greater demand for coal. Interest has been growing in the re-introduction of coal-fired ships in place of oil-fuelled ones. The first step in this direction has already been taken with an order for the construction of two coal-fired bulk carriers for use in the Australian coastal alumina trade.
TABLE 4. WORLD PRODUCTION AND EXPORTS OF BLACK COAL IN 1980
Expanded use of coal may also be expected in the manufacture of bricks and cement and in the fuel fuelling of boilers previously operated with oil.
Possibly the most important innovation will be the development of a commercially viable fluidised bed combustion system. This method of combustion can not only burn normal coal fuels efficiently but can also use lower-grade coals and much of the reject material discarded from coal washeries.
A very large additional tonnage of coal, both black and brown, will be required if commercial plants for converting coal to liquid fuels are set up in Australia. It has already been decided to establish pilot plants and undertake further feasibility studies of the production of liquid fuels from brown coal. Black coal is less certain to be used because it will face strong competition from oil shale as a source of liquid fuels.
The Australian black coal industry is experiencing a period of sustained growth that appears certain to continue for many years. Stimulus for this growth is being provided by increasing demand for thermal coal from overseas buyers.
The actual level of production, consumption, and exports that will be achieved at any particular time in the future is arguable. Projections made by authoritative organisations usually differ, but they all agree that growth will be strong. A summary of some forecasts is given in the following table.
TABLE 5. FORECAST 1990 EXPORTS AND DOMESTIC CONSUMPTION OF AUSTRALIAN BLACK COAL (Mt)
(a) Joint Cost Board figures are estimates of demand rather than forecasts of actual exports or consumption.
(b) Refer to text for discussion of Bureau of Mineral Resources estimates.
(c) Estimates derived from World Coal Study (WOCOL) Report.
The BMR export projections have been made on the assumptions that markets will be available, that satisfactory prices will be negotiated, and that Australian infrastructure, availability of suitable personnel, and industrial relations will allow demand to be met. Although it is acknowledged that each of these factors may have a significant influence on the industry, it is not within the scope of this paper to discuss them; however, it is considered most likely that any difficulties that may arise will be resolved without serious long-term impact on the industry.
BMR's estimates of thermal and coking coal exports are based on categorisation of product by potential producers. While this does not influence the total export projection it does introduce an uncertainty into the individual product estimates. In view of the prevailing conditions in the world steel industries and the increasing demand for thermal coal, it is expected that some poorer coking coals will in fact be exported as thermal coals. Projected export for 1990 are 66 Mt of nominal coking coal and 49 Mt of nominal thermal coal. It is considered that up to 6 Mt of coking coal may in fact be used as thermal coal in 1990, and the export estimates by BMR shown in the previous table have been adjusted accordingly.
Should the current world oil supply and price situation deteriorate, the demand for thermal coal will increase. Alternatively, even if the position should improve, the difficulties and uncertainties in relation to oil created in the 1970s may act against any concerted move back to oil, although some plans to convert from oil to coal firing, particularly in older plants, may be cancelled.
Growth in domestic consumption is expected to be considerably slower than in exports. However, it too will be dominated by increased thermal coal use.
The BMR forecast presented here for thermal coal consumption is substantially less than the other estimates shown in the previous table. The reason for this is that the demand as a result of expansion in the aluminium industry is now expected to be less than was previously thought, and growth in other areas will not be sufficient to offset this loss.
The estimates for 1990 exclude any coal that may be used in the production of liquid fuels, because it is considered most unlikely that any significant tonnage will be so utilised by that year. Further, be fore any commitment is made to commercial coal conversion careful consideration must be given to the question whether that process is an optimum use of Australia's coal resources, particularly in view of the country's large resources of oil shale.
Adequacy of resources
All the forecasts presented in Table S suggest strong growth in the Australian coal industry over the next decade. The extent and level of knowledge of Australia's coal resources have been discussed above. The adequacy of those resources to meet the projected growth in the industry must also be considered.
The following discussion on the adequacy of resources must be based on projected raw coal production. For this reason the projections in the previous table, which are for saleable or disposable coal, are converted to raw coal equivalents according to the recovery rate prevailing in 1980 of 82 per cent. Production between now and 1990 will probably be in the order of 1,300 Mt of raw coal. This demand would reduce today's recoverable demonstrated economic resources to 27,432 Mt. Converting the projections given in the previous table to raw coal, using the 1980 average recovery, one may calculate the life of the demonstrated economic resources as follows: for BMR projections. 129 years; for World Coal projections, 121 years and for Joint Coal Board, 119 years (low projection) or 81 years (high projection).
These figures are based on 1981 recoverable demonstrated economic resources an assume no growth in demand after 1990 and no technological changes that would allow increased recovery of coal. Exploration in the next decade will of course continue to elevate inferred and newly discovered resources into the 'demonstrated economic' category and demand after 1990 will most likely continue to grow. The extent to which addition to resources will outstrip increased use or vice versa is unknown, although the situation should be kept in perspective by noting that between 1975 and 1980 some 522 Mt of raw coal was mined while over 15,500 Mt was added to in situ demonstrated economic resources.Consequently, I would suggest that the resource life projections above are minima. However, these 76 figures do not account for possible use of coal for synfuel production. If a decision is taken to use black coal as a feedstock for production of liquid fuels, consumption is going to increase greatly, putting additional strain on the resource.
On the basis it would appear that our present knowledge of Australia's demonstrated black coal resources may be adequate for medium-term use and planning. For longer-term planning and use, i.e beyond 20-30 years considerably more exploration and testing is necessary. The fact that 477,000 Mt of resources is categorised as 'inferred' means that, while such resources may well exist in the tonnages estimated at present, we do not know enough about them to determine if they can be mined economically or if the quality is acceptable to consumers.
A combination of many factors will ultimately determine the rate of growth of the Australian coal each industry. Perhaps the greatest obstacle to achieving the projected growth rates might be the failure to paper customers 10 commit themselves to purchase coal in sufficient time to allow financing and all associated works at mines and ports to be completed. Within Australia obstacles to be overcome will include transport and port facilities of adequate capacity to handle the projected tonnages. Less obvious but of equal importance is the question of availability of trained manpower including miners, mining engineers, and geologists. Continued effort is required to upgrade our knowledge of the coal presently included in the 'inferred resources' category, and to quantify resources about which little is presently known, Despite these reservations, the Australian coal industry seems assured of a bright future.
DEPARTMENT OF MINES & ENERGY, SOUTH AUSTRALIA, 1980—Coal in South Australia. Mineral Information Series.
DEPARTMENT OF MINES. QUEENSLAND, 1981—Queensland reserves of black coal, June 1981. Queensland Government Mining Journal, 82 (957), 302-305.
DEPARTMENT OF NATIONAL DEVELOPMENT & ENERGY, 1981—Forecasts of energy demand and supply —primary and secondary fuels, Australia: 1980-81 to 1989-90. Australian Government Publishing Service, Canberra.
DEPARTMENT OF TRADE & RESOURCES, 1981—Draft Coal Demand Study. An analysis of current
ion in and projected coal import requirements of major prospective consuming countries for Australian thermal
other and metallurgical coals. Department of Trade & Resources, Canberra.
GREENE, R. P. & GALLAGHER, J. M. (Editors), 1980—Future coal prospects: country and regional
assessments. Report of the World Coal Study (WOCOL). Ballinger Publishing Company.
JOINT COAL BOARD, 1980—Prospective expansion, black coal industry, Australia-New South
Wales. Joint Coal Board, Sydney.
JOINT COAL BOARD. 1981—Black Coal in Australia, 1979-1980: a statistical year book. Joint Coal Board. Sydney.
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