ASX-listed Coronado Global Resources has unveiled plans worth between $80-million and $108.5-million to increase production at the Curragh coal mine, in Queensland, to 15-million tonnes a year by 2023. The US-based Coronado acquired Curragh in a A$700-million deal with ASX-listed Wesfarmers in 2018.
Curragh is one of the world’s largest metallurgical coal mines, with baseline production of 8.5-million tonnes a year of export metallurgical coal and 3.5-million tonnes a year of steaming coal, which is sold to the Queensland government’s Stanwell Corporation. “When we acquired Curragh in 2018, we knew that it had great potential to deliver significant and long-term value for our business. The acquisition of the Stanwell reserve area in August 2018 is a key to our strategic vision for Curragh, as we stated at the time of the initial public offering, Curragh today is not the same mine we bought,” said Coronado MD and CEO Gerry Spindler.
“We bought the mine for $537-million in March 2018. Since acquisition, Curragh has delivered $586-million of earnings before interest, tax, depreciation and amortization.” Spindler said that the new mine plan clearly demonstrated the attractive qualities of the asset, and the many opportunities to unlock considerable value over the next five to ten years, and beyond. “The outcome of the comprehensive review undertaken by our team over the past 12 months is that we now have a more refined mine plan that has exceeded expectations and provides a new target of 15-million tonnes by 2023, which should deliver substantial uplift in value to security holders.”
The new mine plan will focus on three key phases, the first of which will be extracting incremental tonnage through the integration of the 82-million tonnes of reserves located on the Stanwell reserve area. Spindler noted that the current installed infrastructure at Curragh would be used to support an increase in production, at minimal capital investment.
Phase 2 of the expansion will entail the exploitation of new opportunities with an increase in the capacity and efficiency of the Curragh coal handing and preparation plants (CHPPs) as well as the train load-out system to accommodate higher production rates, resulting in more production tonnage and higher sales.
Between $80-million and $100-million will be spent on Phase 2 to increase the capacity of the two CHPPs, with the capital spend focused on debottlenecking the raw and clean coal handling system and enabling different products to be produced simultaneously, as well as the introduction of an intermediate circuit to increase the plant’s efficiency and throughput rate. Phase 3 of the growth plan has not been incorporated into the new mine plan, but will entail the assessment of further growth opportunities at Curragh, including openpit mining at Curragh Central and South, as well as underground mining opportunities.
Coronado on Monday told shareholders that the company has reached advanced stages of negotiation with freight operators Aurizon and Pacific National for additional rail haulage services at Curragh, in addition to the mine’s current contracted haulage capacity of ten-million tonnes a year.
The new arrangements are expected to provide Curragh with the flexibility to expand haulage capacity to support the expansion to either the Wiggin Island coal export terminal or the RG Tana coal terminal.