Coal Age

MAY 2019

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May 2019 5 leading developments continued the surrounding towns of Central Queensland," he said. "There will be no fly-in, fly-out rosters." The first stage of the project will require capital expenditure of A$450 million and will produce 4.5 million metric tons per year (mtpy) of met- allurgical-grade coal, which will be exported through the Dalrymple Bay Coal Terminal. Pembroke awarded an A$184 million contract for the design and construction of a coal handling and preparation plant at Olive Downs, scheduled for commissioning in 2020. Pembroke has also acquired sub- stantial agricultural property holdings in the area and will operate its pastoral and mining ventures together. The mine will be developed on predominantly cleared land and will not impact strate- gic cropping land, the company said. Olive Downs has also entered into an Indigenous Land Use Agreement (ILUA) with the Barada Barna Aborig- inal Corp., the traditional custodians of the land. The ILUA will not only provide a commercial benefits pack- age for the life of the mine to the tra- ditional owners, but also instigate an employment program for members of the Barada Barna community. "We now need to receive a mining lease before we can start construc- tion, but we anticipate starting min- ing in 2020 and shipping first coal soon after," Tudor said. "Today's ap- proval is not only a sign of confidence in this project but also an acknowl- edgement of Pembroke's adherence to the highest of standards through- out the approvals process." Contura Energy Greenlights Lynn Branch Projects In their first earnings call as co-CEOs for Contura Energy, Andy Eidson and Mark Manno, discussed results that were positive, but did not meet ex- pectations. During the quarter, the company produced 6 million tons, a 2-million-ton increase over the same period last year. More than half of that increase was met coal selling at aver- age price of $123.68/ton. The company's board of directors approved the $25 million to $30 mil- lion Lynn Branch metallurgical coal project in Logan County, West Virgin- ia, which is expected to reach full pro- duction by the second quarter of 2020. They announced they had encoun- tered geological issues at Marfork and they had resolved infrastructure-re- lated issues at Mammoth Slabcamp. Despite a longwall move, the Cumber- land mine also posted good results. "As we worked to integrate our ex- panded asset portfolio over the past quarter and a half, certain operational challenges arose that negatively im- pacted production efficiency, particu- larly at [Marfork], while a temporary, partial idling of one of our [Mammoth Slabcamp] was required to bring mine infrastructure up to Contura stan- dards," Manno said. "Both issues are being addressed to better position these assets for long-term success." Marfork encountered geology that yielded less clean tons per foot of advance. The decision was made to relocate the sections to other areas with better mining conditions. Manno referred to it as a temporary issue that will be remediated by the end of the year. The issues at Mammoth Slab- camp were resolved in mid-April and the mine is back to full production. "These factors, along with softer than anticipated sales volumes due to pricing dynamics, converged this past quarter to result in performance that trended below our expectations," Eid- son said. "While we anticipate costs to revert to our previously forecast run rate before year end, we are revising our cost guidance slightly to better re- flect updated full-year expectations." The Lynn Project is expected to unlock a high-quality, 25-million-ton high-vol met coal reserve. The project is expected to produce approximately 1 million to 1.2 million tons annual- ly at its full estimated run rate, with a projected cash cost per ton in the low $60 range. The capital investment includes improvements to the Band Mill prep plant to accommodate this coal. Production is expected to com- mence in the second quarter of 2020. The company maintained its total 2019 coal shipments guidance of 24.6 million to 26.7 million tons. Met coal guidance remained at 12.2 million to 12.8 million tons, with the T&L segment remaining at 1 million to 1.5 million tons. NAPP shipments are expected to remain between 6.8 million and 7.2 million tons in 2019. Thermal shipments are un- changed at 4.6 million to 5.2 million tons. Despite some issues with Marfork, Contura maintains its 2019 production guidance.

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