Week of June 25, 2001
  Blockbuster Deal of the Week
   from Site Selection's exclusive New Plant database
$220 Million, 300-Worker Queensland Coalmine
Will Tap One of World's Richest Lodes
Bowen BasinBy JACK LYNESite Selection Executive Editor of Interactive Publishing BRISBANE, Queensland, Australia -- Pacific Coal (www.pacificcoal.com) has picked a location in coal-rich Queensland for the Hail Creek Coal Project, a US$220 million, 300-employee mine that will extract coking coal. Sitting 53 miles (85 km.) west of Mackay in Australia's Nebo Shire region (www.nebo.qld.gov.au), the site places the operation squarely atop one of the world's largest coking-coal deposits: Queensland's Bowen Basin, which holds ore that traces back to the Permian period - some 280 million years ago.
        When completed, the Hail Creek mine will produce an annual output of 5 million tons (5.5 million metric tons) of coking coal, which assists in the production of iron and steel.
        The Hail Creek mine announcement came as Pacific Gas had been making news of several sorts.

The Bowen Basin in Queensland (pictured above) and the Hunter Valley basins in New South Wales
contain 280-million-year-old deposits that provide 98 percent of Australia's exported coal.

Ancient Lode Suits Modern Market

Topping the plus side of Pacific Coal's news ledger is the market's positive reaction to the Hail Creek mine. The ancient Bowen Basin lode fits modern-day demands, asserted Brian Horwood, Pacific Coal's managing director.
        "The world coal market needs the high-quality product that Queensland's Hail Creek will produce," Horwood said at the announcement in Brisbane, the headquarters city of Pacific Coal, a wholly owned Australian subsidiary of London-based mining giant Rio Tinto (www.riotinto.com).
        "Hail Creek is a very low-sulfur coal, which offers significant environmental advantages for customers," Horwood continued. "The open-cut operation will provide reliability of quality and supply that is so vital in today's competitive market."
        The Hail Creek mine's output will be sold to the export market, generating annual earnings of some $210 million at current market prices. Horwood said that Asian and European buyers are already queuing up and have submitted letters of intent for half of the new mine's projected output.
        The Hail Creek Coal Project is a joint venture between Pacific Coal (which owns 92 percent of the venture), Marubeni (a 5.33 percent owner) and Sumitomo (a 2.67 percent owner). The three partners' projected $220 million capital investment will include building a dragline, mine infrastructure, wash plant and a 32.3-mile (52-km.) railway link to the Goonyella rail line, Queensland's major coal-carrying line.

City of Nebo, Australia

The city of Nebo (pictured), which has a population of some 250 residents, is home to the governing council of the Nebo Shire area. Nebo Shire is home to three operating coalmines and three coalmines that are under construction. Another 10 coal mining projects are in the planning stage, according to local government officials.

Coal One-Fourth of Australian Exports

Pacific Coal is a veteran of Australia's large and lucrative coal industry, which accounts for almost one-fourth of the value of the nation's annual exports.
       Pacific Coal already operates three other coal mines in Queensland: the Blair Athol mine, in which Pacific Coal holds a 71.2 percent interest; the Tarong mine, in which it's the sole owner); and the Kestrel mine (in which it holds an 80 percent interest).
        The Tarong coalmine received the 2000 MINEX Award from the Minerals Council of Australia (www.minerals.org.au). The MINEX Awards are presented annually in recognition of promoting safety and health. The award to the Tarong mine marked the first time that a coal-related operation had won a MINEX.

A Long-Running Labor Dustup,
$800,000 in Missing Aboriginal Pay-Outs

Less healthy for the company's image has been the long running, still unresolved dispute over 16 workers dismissed from Pacific Coal's Blair Athol operation. Pacific Coal has contended that it made decisions on "worker redundancies" by "merit selections," rather than using a "first on-last off" approach.
        Errol Hodder, a commissioner with the Australian Industrial Relations Commission (IRC), has been a particularly vocal critic. Hodder issued a report charging that the dismissals were made on the basis of a "black list" of pro-union workers. Hodder asserted that the list had been made up long before the layoff process began. The fired employees were "never intended to be given an equal opportunity," Hodder wrote, adding that the dismissals were designed to "ensure that the remaining work force would be compliant . . . [providing] a salutary lesson for the benefit of the remaining employees."
        The Hail Creek mine announcement also came as controversy continued over alleged financial improprieties by an indigenous company of Queensland Aborigines. Auditors are attempting to account for $800,000 in trust payments that Rio Tinto and Chevron made to the Aborigines' company, the Birri Gubba Aboriginal Corp. The $800,000 payments were part of a landmark contractual settlement of native title deals for Aboriginal lands.
        The Queensland Supreme Court, responding to an action initiated by the Registrar of Aboriginal Corporations, placed Birri Gubba in liquidation. Pacific Coal and Chevron each paid approximately $400,000 to Birri Gubba, with the funds earmarked for cultural studies, organizing meetings and related work.
        Ordered to investigate by the Aboriginal and Torres Strait Islander Commission, auditors sill haven't determined where the funds have gone. Their reports thus far have also indicated that Birri Gubba's board minutes and other records are missing.
        Troubled by the company's lack of accountability, Pacific Coal stopped payment to Birri Gubba late last year. Said Pacific Coal Business Development Manager Peter McMahon as the investigation continued, "We are reluctant to make a further payment to the trust until it is satisfied that the administration of the trust is in order."


bd0625bd0625 ©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.