News Shift Miner Magazine 1 December 2018 RETURN OF THE PERMANENT MAJOR REVIVAL RESHAPING THE WORKFORCE IN CENTRAL QUEENSLAND December 2018, Edition 210 GALILEE GATHERS PACE Adani new look and Macmines approval NORTH GOONYELLA SEALED What’s the future of 250 mining jobs? PROJECTS LINE UP Gregory Crinum - Iron Bark - Bluff Coal - Dawson West - Winchester South



For all general enquiries 07 4921 4333 or EDITORIAL Overall editor is Alex Graham or 074921 4333 ADVERTISING or 0428 154 653 NEWS & SUBSCRIPTION Magazine: Only available on bulk subscription to SPQ’s and similar venues. Costs $10 per week Individual: Weekly subscription news service available direct to inbox, through the iPhone App and online. Costs $3.99 a week Contact or 0428 154 653 Shift Miner is published by Fitzroy Publishing Pty Ltd A.B.N 72122739879 36B Williams St Rockhampton QLD 4700 - PO Box 1440 Rockhampton QLD 4700


4 News Shift Miner Magazine December 2018 Fitzroy Australia Resources (FAR) has received approval for a six million tonne a year underground coking and thermal coal mine near Coppabella East of Moranbah. The new mine will operate as a satellite pit to the existing Carborough Downs coal mine sharing most of the required infrastructure. According to FAR this will allow first coal by the start of 2020 - just over a year from now - and will generate around 160 construction and 350 operational jobs. CEO Grant Polwarth said it’s an exciting time for the company as it seeks to expand in the Bowen Basin.

“This approval allows us to pursue our vision for the expansion of FAR, providing 350 jobs not far away opportunities to our existing workforce, the local community and the region more broadly,” he said. “FAR’s assets include some 98,000 hectares of tenement holding in the world-class central Bowen Basin for metallurgical coal. “Ironbark No. 1 is the first new development in realising the potential of this significant portfolio….will be a modern and innovative underground operation.” FAR is a subsidiary of global commodities and resources group AMCI which is controlled by American based coal billionaire Hans-Jürgen Mende.

In late 2016, at the height of the mining downturn, Mr Mende - through his global commodities and resources group AMCI - re- purchased the Carborough Downs coal mine from Vale after selling it to them nearly a decade ago. FAR and Vale didn’t release details of the sale price, so we will never know whether it was a sell-in-boom-buy-in-bust deal to be remembered alongside Kerry Packer’s Channel Nine sale to Alan Bond.

However, we do know that in 2007 Vale paid $835 million to AMCI for the Integra Coal mine in NSW, 80% of Carborough Downs, half the Isaac Plains mine, the Broadlea Joint venture, and a suite of other undeveloped deposits. Then in 2009 Vale spent a further $400 million updating the mining processes at Carborough mine to achieve saleable coal of 2.8 million tonnes a year. Hail Creek Option Winchester locked, not loaded Whitehaven Coal has appointed a small project team to start work immediately on developing the Winchester South coal project near Moranbah.

Whitehaven purchased Winchester South from Rio Tinto for around $250 million in May, and have since been meeting with stakeholders, collecting baseline data and undertaking ecological studies.

In its quarterly report, Whitehaven said the potentially 15 million-tonne-a-year-project was progressing. “A project director with extensive coal mining experience and a small technical team have been appointed,” they said. “Groundwork has commenced, with ecological studies and baseline data collection underway, and the information will be used in the environmental approval process. “One of the key priorities is to generate a JORC resource for the Soon to be redundant workers at the Hail Creek mine near Nebo are facing three alternatives for the future. Find a new job elsewhere, get a voluntary redundancy, or be transferred within Glencore.

Glencore surprised the currently booming coal industry by announcing in October that they would be cutting back production at Hail Creek and as a result would be reducing the number of employees at the mine by around 400. Glencore purchased the Hail Creek mine west of Mackay and a suite of other undeveloped Central Queensland tenements from Rio Tinto for $1.7 billion earlier this year. Having taken official control in August, Glencore says they have now reviewed the operation and project...details of the new resource calculation will be released to the market when it becomes available. “First round meetings with key stakeholders have been completed, and no significant issues have been raised in these discussions.

“Project momentum is building.” Other than to say it wants it to happen as soon as possible, Whitehaven has not put a date on when they would like to have the mine up and running. However, it won’t happen before their Vickery extension project near Gunnedah in NSW is operating. The Vickery EIS is open for public feedback until next week and according to Whitehaven, will generate around 500 construction jobs and roughly 450 operational positions. According to Whitehaven, Winchester would be developed as an above-ground coal mine producing between 7 and 15 million tonnes of coal a year for the next 20 or 30 years.

come up with a plan for the future. “Our review has identified a number of areas where efficiency and productivity can be improved, starting with fundamental changes to the mining methods used,” a Glencore spokesperson said. “Our proposed changes are designed to ensure the ongoing viability of operations and reduce costs to improve the overall business position. “Unfortunately, it will mean the mine’s workforce of approximately 1360 will reduce to 930 when all changes have been implemented.” The reconfiguration is to be phased in over the next 18 months, although the majority of changes are expected to be in place by the first half of next year.

Mines Minister Dr Anthony Lynham publicly announced the approval of the mining lease saying Central Queensland remains a great place to invest. “Ironbark No.1 comes on top of the 13 committed resources projects in Queensland with a combined capital value of more than $9.4 billion across multiple commodities. “Another 42 projects are at the feasibility stage, with a combined capital value of more than $65 billion, again, across multiple commodities. “Queensland remains a global resources investment magnet, as our $56 billion resources sector generates thousands of jobs and business opportunities and royalties to pay for our teachers, doctors and nurses.”


News Shift Miner Magazine 5 December 2018 Adani people, not robots Adani has released a statement again reaffirming their commitment to the Carmicheal mine in the Galilee, and making the point that it will be people- powered, as it continues its PR campaign to win support for the mine. Despite automation being one of the most profound changes occurring in mining at the moment, Adani CEO Lucas Dow says it won’t be a signature part of the coal mines development. “In the initial ramp up and construction phase there will be more than 1,500 direct jobs on the mine and rail project, and thousands of indirect jobs especially in places like Rockhampton, Townsville, Mackay and the Isaac region,” he said.

“Further jobs will be created as the mine’s capacity grows to 27.5mtpa.

“Every job will be a new job in regional Queensland that didn’t exist before and importantly; these new jobs are not coming at the expense of jobs elsewhere in Australia as we will be selling into new markets for Australian coal. “The mine will use the same conventional coal mining techniques and equipment used in other Queensland coal mines. “That means people, not robots, will drive the trucks and excavators, fix engines in the workshops, cook the meals, and maintain the conveyor belts. “We are about real jobs for real people.” The statement about automation puts them odds with other big global miners such as BHP and Rio Tinto who have recently said that technology will transform both the cost and safety of their mines.

In it’s most recent annual report, BHP said it could drive down per unit costs for their Bowen Basin operations through increased productivity driven by more work standardisation, automation, and machine learning. Earlier this year, an internal Rio Tinto memo from 2016 surfaced predicting nearly 1000 manual roles would become redundant as they rolled out automated haul trucks, drill rigs and trains. “Automation and technology are clearly changing the way we work, including reducing the number of future roles for truck drivers, train drivers and drillers,” a spokesman said in response.

While there are no automated haul trucks in use in Queensland (yet), automation is advanced in drill rigs and surveying and is being fast-tracked in some of the more straightforward earthmoving processes.

The Queensland coal industry continues to underpin the Queensland economy entering its 22 consecutive month as the state’s most valuable export. Queensland government figures forecast that coal will generate around $3.76 billion in royalties for the state government this year, and when combined with gas could approach $4.5 billion.

The quantum of royalties has surprised government forecasters who didn’t predict the amazing recovery in coal prices over the last 12 months. The Queensland budget assumed thermal coal prices for this financial year would be $US89 a tonne, but spot prices have exceeded $US100 a tonne while coking coal has traded more than $US65 a tonne higher than budget predictions. CEO of lobby group the Queensland Resources Council Ian Macfarlane says the figures underscore the recovery and contribution of the resources sector. “The consistent returns from the Queensland resources industry fund schools, roads and hospitals, and are particularly important at a time when rural exports have hit a rough patch,” he said.

“On top of this record return for Queenslanders, there are about 300,000 people who work in the resources sector, either directly or in associated industries.” Coal QLD’s MVP


6 News Shift Miner Magazine December 2018 Indian miner Adani continues to scale back the dimensions of stage one of their proposed Carmicheal coal mine, announcing they won’t be building a dedicated FIFO airstrip anytime soon. In a short statement, Adani CEO Lucas Dow said revised construction plans meant the airport wouldn’t be required in the foreseeable future.

“Having adopted a gradual construction and ramp-up for the mine, the airport facilities as originally contemplated are not immediately necessary,” he said. “As such, no investment is required from the Rockhampton and Townsville Regional Councils at this point.” The decision casts some doubt over where Adani will source its mine workforce should the mine become a reality.

Twelve months ago both the Townsville and Rockhampton Regional Councils secured prefered status as “FIFO hubs” after they jointly committed to invest $30 million into the development of an airport at the Carmichael mine. Of the more than 3300 jobs Adani has said would be generated during the construction and operational phases, 2100 were contracted to come from Townsville, and 1700 from Rockhampton. With the airstrip no longer required that deal is redundant, but Mr Lucas says both Townsville and Rockhampton will remain priority regions. “Importantly, Rockhampton and Townsville will represent the primary hubs for our workforce without the need for councils to invest at this point,” he said.

“We think this is a great outcome for Rockhampton and Townsville.” Since taking on the role Airstrip funding deal shelved GascompanyQGChasannouncedit willexpanditsSuratBasingasfields overthenexttwoyearsbydrilling another250wells,generatingaround 300jobsand“opportunitiesforlocal business”intheprocess. ParentcompanyShellAustralia chairpersonZoeYujnovichsaid ProjectGoog-a-bingewouldstimulate thelocaleconomy.

“During2019and2020,Shell willprogressivelydrill250newgas wellsaspartoftheQGCventure intheWesternDownsregionof Queensland,”shesaid. “Thewellswillconnecttoexisting QGCgasprocessingplantsandwill bringapproximately930petajoules ofgastomarketoverthenextthree decades. “Theprojectisexpectedto createorsustainupto350jobs,the majorityofwhichwillbeinregional Queenslandandgeneratebusiness opportunitiesforlocalsuppliers–and beasubstantialandongoingboostfor thelocaleconomy.” Santosannouncedasimilar projectafortnightago,involvingthe drillingofbetween350and400new wellsayearacrossCentralQueensland asitrampsupgasproductiontomeet domesticandglobaldemand.Inline withthis,Santossaysitexpectsto increasesalesofgasfromtheCurtis IslandGLNGplanttomorethansix milliontonnesbytheendofnextyear.

Sojitz CEO Cameron Vorias says the first ever mining of Fort Cooper coals in the Bowen Basin at their proposed new Wilton coal mine could happen by June next year subject to approvals. The project is one of three in development for Sojitz, who is currently releasing work contracts and close to launching a recruitment campaign.

Headlining their growth plan is the restart of the Gregory Crinum mine which they recently announced they were in the process of buying from BMA. “It’s not that far down the track,” Mr Vorias told Shift Miner. “We are looking at trying to complete with BMA by the end of the year, and we have just one outstanding condition precedent left to go. “The planning is going well, and we have a transition team entirely in place. “We are starting to let contracts go out, obviously with conditions around completion, but we are starting to look at refurbishment contracts for the dragline and wash plant, and all Crinum contracts released the other associated equipment that needs to come in.” Once Gregory Crinum is restarted, possibly by April, the nearby Wilton mine will then be the main focus and could be operating as little two months later.

Both of those mines follow the brand new, but comparably much smaller Meteor Downs South (MDS) coal project near Springsure which exported first coal earlier this year. That mine is limited to around 500,000 tonnes a year because all coal has to be moved by road to the nearby Minerva rail loading facility. However, Sojitz is in discussions with Aurizon and another engineering firm to fast track ways of organising rail infrastructure on the Bauhinia line that would allow them to triple production.

“It’s going to be a massive first year,” Mr Vorias said. “I think if you look at it, we are just about the only company that is starting three operations in the space of twelve months. “I think we have got a great time coming with Gregory Crinum and the Wilton startup, and I think all things bode well.” 250 wells and 300 jobs of CEO, Mr Lucas has sought to downsize the reality and perceptions of the Carmichael project. “Often the Carmichael mine is incorrectly called a “super mine” or “mega-mine, this is simply not the case,” he told Townsville businesses in early October. “The Carmichael mine will produce 27.5 million tonnes of coal per annum in stage one.

“This is only a small fraction of the total coal produced in Australia and a small percentage of coal used in the world each year.” In contrast, in 2011 former Adani CEO Jignesh Derasar told the Coaltrans conference (attended by Shift Miner) they planned to build a mine that would reach annual production of 60 million tonnes a year, employing nearly 5000 people in the construction phase and almost 4000 in the operational period. “This is a massive operation,” he said at the time.


News Shift Miner Magazine 7 December 2018 Anglo American will commence construction straight away on a brand new 12.5-kilometre major regional road to replace the Gibihi road which was closed late last year after a routine blast at the Dawson mine destroyed it.

It has taken Anglo and the Banana Shire Council a year to decide the fate of the old Gibihi road and come up with an alternative route linking the Leichhardt Highway to the Dawson Highway. Chief Executive Officer of Anglo American’s Metallurgical Coal business, Tyler Mitchelson says the road would traverse the Dawson mining lease.

“We’ve carefully considered the route to ensure it incorporates feedback from the community throughout our consultation periods and includes important features, such as a dedicated 4.3-kilometre road leading to a relocated viewing platform, which will encourage local tourism,” he said. “The road has been specifically designed for all weather conditions and provides improved engineering to ensure access during times of flood. “As part of the infrastructure design, we’ve also worked with the Department of Transport and Main Roads to construct and re-design a new, safer intersection between the new Three Chain Road and the Dawson Highway.

Banana Shire Council Mayor, Nev Ferrier said, Council went through a rigorous process in accessing the three options for the route for the new road. Blasted road to reopen “After giving all of the options due consideration, and taking into account the assessment provided by Council’s independent consulting engineers GHD, the Three Chain Road plan was identified as the most practical, cost-effective and suitable option available. “There are extensive safety issues associated with building a road through the gas fields, and it is because of this that the options where the new road came out onto Moura-Theodore road were eliminated.

“Council will continue to work closely with Anglo American through the design and construction phases of the project.” Anglo American and Banana Shire Council will work with locally-based suppliers for the duration of this project, with over 100,000 cubic metres of road base to be sourced from local quarries. Tenders for significant work packages were issued to local contractors in October, with completion expected next year. THAT’S WHAT WE CALL HEAVY LIFTING


8 News Shift Miner Magazine December 2018 Surge in BHP spending A $50 million surge in local business by BHP in the last six months has pushed the total amount spent through their local buying program to more than $250 million according to C-Res.

The local buying program was launched in Central Queensland by C-Res and BHP in 2012 to increase opportunities for local businesses to provide goods and services to BHP’s coal businesses. Since then, it has expanded to their operations in South and Western Australia.

C-Res CEO, Tracey Cuttriss- Smith said spending has taken off in the last six months in line with the recovery in mining generally, but also in response to bedding down of the program. “The first three years were pretty steady, and it was just about trying to introduce that program to BMA, but it’s only been in the last year and a half to two years that we have seen significant growth,” she told Shift Miner. “For example $50 million of that $250 million has been in the last six months, so we are definitely seeing a rapid increase now.

“For any major global company it takes a while to introduce these types of changes, and it is a culture change in how you source and get confidence in our local small businesses.

“So what we are seeing is a lot of businesses who have never engaged with BHP ...being able to engage through this program and doing well.” While there are some criteria regarding size and locality that businesses have to meet to be able to participate in the program, Ms Cuttriss-Smith says those that are involved enjoy a far more streamlined onboarding program than might be available through conventional channels. She is also surprised at the breadth of sectors with which BHP does business.

“Even things like when BMA funds the Marina Fun Run in Mackay, and they want to engage a masseuse for after the fun run, we can put all that through the local buying program,” she said. “So it’s just not around heavy industrial offsite mining opportunities, it’s actually everything and anything. “In the communities of Moranbah, Dysart and Blackwater we have a gift voucher program so that if they want to reward employees, they can give a gift voucher that can only be spent in local businesses.

“So that is how things like Florists, Day Spa’s and Toy shops can get that work as well.”


News Shift Miner Magazine 9 December 2018 Coal dust levels on Queensland mine sites have been slashed by nearly 20% from this momth in what mining union the CFMEU says is a breakthrough in the management of Black Lung.

CFMEU District President Jason Hill told Shift Miner that the previous rate of 3 grams per cubic metre for respirable dust would be cut to 2.5 grams. “We have managed to get the statutory dust levels reduced,” he said. “Following a concerted push by the CFMEU to get some action on dust, it’s going to be brought down Dust levels to be slashed to 2.5 grams per cubic metre. However, the CFMEU isn’t calling it a silver bullet for Black Lung, instead viewing it as the first of many steps that need to be taken to make coal mining safer.

Safe Work Australia is currently undertaking a review of the respirable dust levels in coal mining, and the CFMEU hopes that once their results are in, they will be able to push through a reduction to 1.5 grams per cubic metre for respirable dust levels, and 0.5 grams per cubic metre of silica dust levels by 2019. Further to this, they want a complete change to the way dust levels are measured and published. Under the current system, the CFMEU says dust levels are averaged over a 12 hour period by mining companies. If the average is too high, there are then further investigations, which could take weeks to complete, and all the while exposure continues at the coalface.

“This is a good first step in making a safe place to work,” Mr Hill said.

“Obviously some other issues are going to back up behind this. “We need to get independent testing for dusting because at Private coal explorer, Construction and Mining Resources Pty Ltd (CMR) has begun working on an EIS for its proposed thermal coal mine fifty kilometres west of Theodore. This month the Federal Government confirmed the Dawson West mining project would be a “controlled action” meaning they will need an EIS to move forward. Earlier this year, CMR released a resource assessment (JORC) for Dawson West of 645 million tonnes of thermal coal based on a drilling campaign in 2014.

The resource comprised 129 million tonnes of indicated, and 516 million tonnes of inferred resources with coal seams between 0.8 and 3.5 metres thick from depths of 5 metres to nearly 500 metres.

At the time, CMR Managing Director Nicholas Williams said they would commence a pre-feasibility study and start looking for a development partner to develop either a longwall, shortwall or linear style underground mine. “This is a huge discovery for CMR and the State of Queensland as we have identified a new coal precinct that is close to Infrastructure and is only 233km from the Gladstone Port region,” he said. “The second phase drilling campaign has been a great success, increasing our resource confidence into the indicated category and overall inferred Resource significantly from the initial exploration program.

“CMR has only explored 8% of the total project area, and the project has immense scope for significantly increased tonnages across the, and we will launch a pre-feasibility study in the coming months to look into potential mining methods, transportation options and the overall economics of the project. “We are looking into options to further advance the Dawson West project and will be running a process to find a development partner and will be shortlisting candidates in the interim”. Theodore Coal mine The future of 225 jobs at the North Goonyella coal mine hinge on the monitoring and assessment phase currently underway.

In its latest update, Peabody said there had been no significant developments in the past week, as they continued work on sealing the mine and established a network of data monitors. “The main activity on site is the concrete sealing of the mined-out area of the 9 North longwall panel which is nearing completion,” they said. “The North Goonyella team will continue to work safely from the surface to get the best understanding of underground conditions based on an expanded network of 35 remote gas monitoring points. “Underground camera images continue to be taken where possible.

“We continue to monitor temperatures, gas levels, seismic activity and surface air quality which is necessary to allow advanced planning for re- ventilation, mine re-entry and potential restart of operations.” Last week Peabody said the underground fire had so far cost the company more than $50 million and could balloon into the hundreds of millions if they abandon the mine.

Until they can make a definitive decision, the long-term future for the 225 North Goonyella miners is unknown with Peabody saying they are currently either working on site, redeployed to other Peabody operations, or on paid leave.

225 jobs in the balance the moment the dust sampling is undertaken by the companies. “Having mining companies undertake their own sampling is like putting the fox in charge of the chicken coup.” There have now been 78 confirmed cases of coal mine dust- related lung disease across Australia, most of them in Queensland. The CFMEU says the new dust laws are a small bright light in what has been a very dark month for mine safety in Central Queensland. Among the near misses and accidents reported in Central Queensland have been a bulldozer driving over an edge at Moura, some heavy vehicle collisions, and a series of light vehicle accidents.

“ The accidents lately have just been out of control,” Mr Hill said “For me, it’s more than a spike its just been ramping up, and to me, it’s an indication of the boom coming back.

“Are we putting pressure on blokes to do the job, putting unqualified or inexperienced people in situations? I am not sure. “It looks to me like we are putting production ahead of safety.”


10 Shift Miner Magazine December 2018 News BMA continues to ramp up coal production from its Peak Downs coal mine as it prepares for the completion of its Southern Circuit project. When completed, BMA will be able to transport Peak Downs coal 11-kilometres on a conveyor system to the Coal Handling Preparation Plant (CHPP) at the nearby Caval Ridge Mine.

BMA predicts this will allow them to increase coking coal exports by 4 million tonnes a year. To support the increased coal required by BMA at Peak Downs, tier one contractor Thiess has just finished building a brand new Liebherr 800-tonne excavator. The machine arrived in parts from Europe and Adelaide and was assembled in just five weeks by a team of Liehbher and Thiess engineers.

Thiess graduate mechanical engineer Warren Metz said the machine was completed ahead of schedule. “This was an instrumental build for us – it was our biggest build BMA Peak Downs ramp up to date for BMA (BHP Billiton Mitsubishi Alliance) on this project,” he said. “We delivered it safely, efficiently and with pride. “We met all Thiess and BMA guidelines and requirements, and we delivered it ahead of schedule and without incident. “Our team is pleased to see the 9800 already showing its worth and hitting its performance targets.” Thiess’ Peak Downs/Caval Ridge teams now have three fleets in operation at Peak Downs, and two at Caval Ridge.

Also, Thiess maintains two excavators, several trucks and multiple ancillary items operated by BMA at Peak Downs. Work started on the Southern Circuit project in mid-2016 and is expected to finish by the end of this year. According to BHP, it’s created nearly 400 new construction jobs and locked in around 200 ongoing operational roles associated with the increased production supported by the new conveyor.

News Shift Miner Magazine 11 December 2018 One of Central Queensland’s biggest construction firms JMK Group has gone into administration leaving creditors owed millions and hundreds out of work. The company has offices in Mackay, Rockhampton, and Brisbane and has built everything from award-winning architecturally designed art galleries to council buildings, schools and industrial complexes over its six decades of business. Administrators Price Waterhouse Coopers, have confirmed they will liquidate eight businesses operating under the JMK Group banner including, BPM Cowlrick Pty Ltd, Burns and Twigg Pty Ltd, Cajun Pty Ltd, Central Electrics (Contracting) Pty Ltd, Central Queensland Investments Pty Ltd, C.Q Construction Management Pty Ltd, Fitzroy Industries Pty Ltd, JM 230 jobs gone at JMK Kelly Builders Pty Ltd, JM Kelly Management Pty Ltd, and Kawana Joinery Co.

Pty Ltd.

In a statement, John Murphy son of founder Geoff Murphy blamed a lengthy court battle with a Gold Coast developer over a construction project for the current situation. He says the action had meant the company had been removed from government tender lists losing opportunities to bid for $90 million worth of work. “The past few years have been very difficult and trying for all of us at JMK,” he said. “The efforts to defend our business have had a considerable impact on us.” The Queensland Building and Construction Commission (QBCC) has previously tried to strip Mr Murphy of his building licence following the liquidation of another company he had been General Manager of in 2016.

They released a statement this week saying they would take further action against him. ”In light of today’s developments, the QBCC will again take exclusion action against Mr Murphy, as it is required to do by our legislation,” they said. Among the suite of projects, JMK Group has built within Central Queensland, are the Yeppoon Town Hall refurbishment, redevelopments at Rockhampton Mater and Gladstone Public Hospitals, and educational facilities at Mackay’s Emmanual College and Rockhampton’s Grammar School.

12 News Shift Miner Magazine December 2018 Finally a payday breakthrough BMA, Peabody and Rio Tinto have softened there stance on hyper- extended payment terms in the Bowen and Surat Basin. In 2016 both BMA and Rio Tinto - followed by most others - outraged local businesses when they decided to double the time they would take to pay their bills from 30 to 60 days. “The decision to ask our suppliers to share some of the burden has not been taken lightly and we have endeavoured to reduce the impact where we can,” Rio Tinto said at the time. It was the first time that the global miners had taken this step, and despite deep resentment, most businesses accepted that slow pay was better than no pay at all.

The decision meant some companies waited (and still do) more than four months to get paid by the time “delays” and other “issues” are resolved in the invoicing process.

Despite ongoing representations from business groups across the Bowen and Surat Basin, mining companies have so far refused to budge on the policy, other than to offer concessions for small and micro-sized business operating within their local buying programs. Last week Peabody announced that they would be taking this further with 30-day payment terms for all small to medium-sized enterprises (SMEs) supplying the company. Peabody’s Australian President, George J Schuller Jr said the move recognised that they could do better, and that slow payments were having an impact on business cash flow, especially for family businesses in regional Queensland.

“As a company, we’re committed to working as hard as we can to support the people and businesses that support us,” Mr Schuller said.

“Peabody’s proud to report that, in the past 12 months, 95 per cent of its total spend with suppliers was on 30-day or less payment terms and today’s announcement will ensure all of our SME vendors will be paid sooner.” “Whether you’re a committed supplier of ours from Mackay, Moranbah, Nebo or Rockhampton, Peabody aims to forge even stronger business relationships with you into the future. “We found that some businesses were waiting too long to receive payment and we’re on a mission to improve our internal systems to help prevent future delays. “We wanted to prioritise our small to medium vendors first because we know being paid on time is crucial to business profitability.” Similarly in Gladstone, the Rio Tinto owned QAL has softened its stance on payment terms last week moving from 45 days from the end of the month (so possibly 75 days if everything goes to plan) to 30 days net for suppliers whose total business with QAL is less than a million a year.

QAL chief financial officer Chantelle Essa said the change was implemented on November 1 and affected 95 per cent of suppliers. “We recognise that cash flow can be a barrier for some businesses, so we wanted to ease this burden for our suppliers,” Ms Essa said. “Our procurement spending is vital to many small businesses in Gladstone, and we understand that lengthy payment terms can create cash flow pressures for small to medium-sized suppliers.” However, one mining support business told Shift Miner they remain wary.

“I guess we are viewing it as a move in the right direction, and that’s a good thing,” she said.

“I heard a BMA presentation last month, and finally they seemed to be listening to what we are saying, rather than dismissing it out of hand. “But that said, right now we are still waiting months to get paid, at a time when we know mining companies are making extraordinary profits. “Relaxing this position is not something the big miners should be congratulated for, they should be ashamed of their behaviour in 2016. “After all, no one really thinks they wouldn’t do it again in the future.” Cimic Group continues its domination of contract mining across the Bowen Basin, with yet another of its divisions securing a multi-million dollar contract.

CIMIC Group’s mineral processing company, Sedgman has won a year-long $25 million contract to operate QCoal’s Byerwen coal handling and preparation plant (CHPP).

The Qcoal CHHP is in the commisioning phase, and according to Sedgman Managing Director Grant Fraser, the contract will build on previous work. “Sedgman’s strong working relationship with QCoal has developed over many years,” he said. “We have been closely involved throughout the Byerwen project from the engineering, procurement and construction of the stockpile, train load-out and CHPP. “We are pleased to be completing the cycle by operating the plant.” Sedgman will join Cimic’s other mining contracting business Thiess who earlier this year secured a $480 million extension to its existing contracts at Qcoal’s Sonoma, Cows, Jax and Drake mines (Northern Hub) South of Collinsville.

Under that agreement, Thiess will provide mine planning, drill and blast services, overburden removal, and coal mining services. The Qcoal contract is the latest in a long list of contract wins by Thiess - and by extension CIMIC - who have closed significant deals with Coronado Coal, Anglo American, BMA at Peak Downs, and Jellinbah in the last two years. CIMIC’s Basin stranglehold Mackay based contractor Mastermyne is optimistic about the future as it reflects on what’s been a watershed year for the mining support sector across Central Queensland.

The turnaround in mining activity has not delivered anyone quick riches with continued tight margins, and most businesses trying to make do with a skeleton staff from the worst days of the downturn.

Despite this, CEO of Mastermyne Tony Caruso says it feels like the worst is behind them. “I think everyone would say it’s been a positive year,” he said. “Everyone has seen quite a bit of revenue growth, and Mastemyne has had a strong year as well,” he told Shift Miner. “Last year we had revenue of just over $200 million, and this year we are guiding to revenue of $230 to $250 million.

“So we have seen good growth, and what I like at the moment is that it feels like a nice sort of sustained shift, rather than a really aggressive shift up that is almost invariably followed by an aggressive shift down.” Perhaps the most remarkable element of the most recent mining boom and correction was the astonishing rise and then fall in prices for everything from machinery to wages. This time around, Mr Caruso says the rises have been more reasonable, and a move to a stronger part of the mining cycle has not been accompanied by “ridiculous” inflation. While much of the recovery seen so far has focussed on maintenance and operational support for record-breaking output from existing mines, he says shelved plans for greenfield projects are being dusted off.

“The other thing that is giving us confidence is that there are a number of greenfield projects that are starting to be dusted off,” he said.

“We see some activity around Aquila’s Eagle Downs project, Springsure Creek and a few other underground projects. “There is a nice pipeline of projects starting to emerge in Queensland and NSW.” 2019 sweet spot

News Shift Miner Magazine 13 December 2018 The Local Government Association of Queensland (LGAQ) is calling for governments to include non- resident FIFO or DIDO populations when deciding future funding. Currently, the government only considers the full-time resident population, which for many resource communities might be only half the total number of people living in a town on any given day.

The LGAQ resolved to make the issue part of their policy agenda this year after Mayor of the Isaac Regional Council Anne Baker moved the motion.

She said the current rules are short-changing most mining communities. “In Isaac, we have a permanent population of about 21,000, but on any given day an additional 10,500 workers are also living in temporary accommodation and camps in or near our communities,” she said. “For every two residents, we have an additional ‘serviced’ resident who is not counted Invisible miners do count BMA and BMC transport Galilee CSG joint venture Bus operator Greyhound has won a multi-million dollar contract extension providing bus services to BHP’s Central Queensland mines for the next five years. Under the deal, Greyhound Resources will bus miners wherever BHP needs them to go, although mostly it involves taking them to and from nearby camps to mine sites.

According to Greyhound Resources CEO Alex de Waal, the contract renewal recognises their efforts to inject technology and comfort into their bus services. “I think BHP is very much driving the safety standards in the resource sector, and helping us strengthen our competence in fatigue management,” he said. “That allows us to exceed A joint venture seeking to be the first to exploit the Galilee Basin’s vast coal seam gas reserves has commenced early survey work for its preferred gas pipeline, and begun talks with local landholders and councils.

Gas explorer Galilee Energy and Chinese-controlled gas and electricity business Jemena entered a non-binding agreement a year ago with the intent of harvesting gas from the Glenaras gas fields North West of Barcaldine and then piping it across the Bowen Basin to Injune.

As a small explorer, Galilee Energy has high hopes for their Glenaras gas project. “Prices [for gas] have increased over the last ten years from as low as $3/GJ to current levels of $8 to $11/GJ, with the production of new onshore gas volumes challenged by the requirements of the chain of responsibility legislation. “Coach travel is not what it was 10 or 20 years ago; we have onboard Wifi, toilet facilities, and leather seats that recline. “So the prospect of travelling by coach is becoming more convenient and comfortable and offers a greater degree of safety.” According to Greyhound, a concept bus they developed in 2016 that embedded a suite of new technologies like telematics, driver fatigue, passenger seat belt, and real-time tyre pressure monitoring, has been critical in winning the contract and redefining safety.

As a consequence, the 49 new coaches and 10 Mitsubishi Rosa’s, they will acquire to fulfil this contract will all be equipped with the Greyhound “Techbus” safety features.

Despite the win, Greyhound Resources says they continue to look for other new clients as mining ramps up. “We see a lot of demand, and are writing a lot of tenders and quotations,” Mr de Waal added. “We are seeing the marketplace being stimulated at the moment and significant growth.” regulatory restrictions currently still in place in Victoria and New South Wales,” they said. “The structurally short, east coast gas market presents an enormous opportunity for the company’s gas assets. “With very few other projects in the appraisal or development stage currently capable of meeting this shortfall, Galilee Energy is well placed to capitalise on this large potential given the size of our resource.” According to Galilee Energy, they have one of the most substantial uncontracted contingent gas resources on the east coast, which they want to develop into a significant gas reserve.

However, this will require further drilling and assessment because in the gas sector, contingent resources, while potentially recoverable, are not yet considered mature enough for commercial development. For its part, Jemena says having access to a vast Galilee gas resource would strengthen the case for an extension to the pipeline they are currently building from the Northern territory to Mt Isa. for the purposes of calculating government funding. “That’s essentially a funding shortfall of 33% which places affected communities in a position of disadvantage.

“This issue needs to be addressed if we want sustainable regional resource communities, and is fundamentally an issue of fairness and equity.” The revival of the Central Queensland mining sector has translated into a more than 10% increase in the number of non- resident (FIFO or DIDO) workers in the Bowen Basin.

According to recent figures from the Queensland Government Statistician’s Office (QGSO), on a given day in June 2017, around 15,000 people travelled to the Bowen Basin for work. Given the roster systems using in mining that means that something like 30,000 people are employed in the resources sector on a fly-in-fly-out or drive-in- drive-out basis. This invisible population can put considerable pressure on local government infrastructure during their time at work.

14 Shift Miner Magazine December 2018 Around Town

15 December 2018 Shift Miner Magazine Around Town

16 Shift Miner Magazine December 2018 Around Town

News Shift Miner Magazine 17 December 2018 A report has found that staff are abandoning small and medium- sized business at an increasing rate creating long-term problems for growth. The 2018 Staff Retention Report by the Insitute of Managers and Leaders is not industry-specific, however, it says the hardest hit businesses are those with turnover between $5 and $10 million.

Research General Manager Sam Bell told media that across Australia, employees are chasing better money which makes it very hard for smaller businesses not seeing improved revenue. “If you look at those factors, small businesses are probably disadvantaged against larger, The Rolleston coal mine has been taken off the market, after the mines owner Glencore was unable to agree on a price with a range of potential buyers.

In a short statement Glencore said the mine was on track for record production and possibly profits this year, and despite significant interest from buyers they had decided to abandon selling it. “While there had been significant progress made with a number of parties interested, no agreement has been reached,” they said. “Rolleston is delivering significant value to our Australia coal portfolio and given the ongoing strength of the global seaborne thermal coal market, the mine is making good margins and is on target for a record saleable coal production of 15.5 million medium-sized businesses or even publicly listed companies,” he said.

“Salary growth is difficult to support from a small business perspective and seeking a new challenge can be hard in a small business.

“A lot of businesses are reluctant to put huge amounts of money into investing back into their staff when they’re losing 10 per cent of their staff every year.” With the improved fortunes of mining in the last two years, demand for skilled people in Central Queensland has skyrocketed with most businesses in the mining sector listing it as one of their primary concerns. However, a more stable period might be coming with the latest figures in the DFP Mining and Resources Job Index pointing to slower growth in demand for people.

“September saw the first fall in job vacancies in the mining and resources sector for 16 months,” they reported.

“A fall of 1.3% brought the national index to 92.51. “Permanent job vacancies fell by 2.2% while temporary & contract roles rose by 0.3%.” tonnes this year.” The move to sell the Rolleston mine was not in anyway a move away from thermal coal mining generally for Glencore. After losing a bidding war with Chinese government backed Yancoal to buy Rio Tinto’s NSW based Coal and Allied thermal coal business earlier in the year, Glencore struck a deal that gave it a 49% stake in the business. They also had mining leases approved for the proposed Wandoan Mega mine in the Surat Basin, and bought the Hail Creek mine from Rio Tinto.

Glencore is currently the world’s largest miner of seaborne thermal coal, and the Rolleston coal mine has government approvals that would allow Glencore to extend the mine life by more than 20 years. Shortage of skills Rolleston sale cancelled

18 Shift Miner Magazine December 2018 Around Town Landmark for Labour Hire? A former Workpac labour hire employee at BMA’s Goonyella Riverside mine has successfully had her “demobilisation” from the mine classified as an unfair dismissal by the Fair Work Commission. Machinery operator, Kim Star, had been employed by Workpac under a labour-hire contract supplying the BMA owned mine for about four years when she was demobilised late last year.

On the 13th November 2017, Ms Star received a letter from Workpac advising her that BMA had told WorkPac “that they wish to demobilise” her position immediately, putting her out of work. However, the letter did say the termination was “non- performance related” and that she could seek other work through Workpac.

The court examined the timing of the “demobilisation”, the use of the word “termination” and the fact that BMA gave no reasons to Workpac regarding the sudden action. During this period, Ms Star gave evidence regarding her time at the mine, outlining some incidents that she felt may have had a bearing on her employment. The first involved a rejected request for leave over Christmas in October 2017. Ms Star said she was aware BMA management “would not have been happy” about it given she was a casual employee of a contractor.

The second incident on the 9th November involved a safety incident where Ms Star refused to unload her machine in a designated area at night because she felt there was inadequate lighting.

Her immediate supervisor disagreed, although after the issue escalated, lights were assembled as she requested. However, by the time this happened, she was on a crib break and did not return to the area as she was on a different machine after her break. She recalled a conversation with her supervisor during her break. “I may have come across angry on the radio, but I was just very frustrated as the grader driver should have known what the SOP were for the task the grader was performing,” she recalled saying. “I thought it was ok to do it the way you were doing it without the lights because the grader was spotting you and the ramp was 60 metres wide,” the supervisor responded.

She also told the court the mines Open Cut Examiner arrived advising her that he had told the grader driver that he needed lights and signage in order to discharge the load safely. She also claimed he also pointed out that she had been “assertive” during the conversation about the issue on the two-way radio. Ms Star responded that she had been firm during the discussion because she was concerned about not breaching the SOP. The court also heard evidence from three other people at the Goonyella Riverside mine that following Ms Stars removal from the mine, other labour hire employees had been engaged to “undertake the same or substantially the same work”.

Workpac argued that Ms Star’s employment only ended when she expressed disinterest in other roles presented after her removal from Goonyella Riverside; However, Deputy President (DP) Asbury rejected the argument saying that the terms and conditions of employment provided by Workpac did not constitute an ongoing work contract.

“Rather it is a contract in the form of a standing or framework agreement under which an employment relationship or a series of employment relationships may be entered into on particular sites or at particular locations, on either a casual or a maximum term basis,” she said. “Further, the employment relationship for each assignment is established by a letter of offer, when the assignment ends, so does the employment relationship. “This was not a case of an employee moving around a variety of sites for relatively short periods.. Ms Star was employed by WorkPac to work at a particular site and only at that site and Ms Star’s offer of employment, related only to one site.....and the terms on which employment was offered make clear that when the assignment ended so would the employment.” Having therefore established that Ms Star was dismissed from her employment, DP Asbury then concluded that her dismissal was unfair.

“The documentary evidence .... allow an inference to be drawn that the reason for BMA’s directive that Ms Star be removed from the site was related to her conduct on that shift,” she said. “It’s more than coincidental that the email from BMA stating that Ms Star was no longer required at the mine effective immediately was sent to WorkPac on 10 November 2017 at or around 9.38 pm. “Based on the facts, I have is more probable than not that Ms Star’s dismissal related to a conduct issue.

“Ms Star was dismissed before any attempts were made by WorkPac to redeploy her and I do not accept that any inability to redeploy Ms Star was the reason for her dismissal.

“The dismissal was unfair on the basis that there was no discussion with Ms Star about the decision to remove her from the site and ..there was no attempt made to discuss the directive with a relevant manager of BMA or to confirm the reason for the directive or whether the contractual provisions between BMA and WorkPac with respect to unsatisfactory performance by WorkPac personnel applied.” However, the victory might be a hollow one for Ms Star because as the court conceded, Workpac, do not have the power to force BMA to reinstate her to her former position if she chooses to pursue that outcome.

If they did - which seems unlikely - she would only receive around $5000 in wages back payment, because ironically, her new job in the mining sector is higher paying. Senex says it expects to make a final investment decision about the Western Surat Gas Project (WSGP) in the next six months. The WSGP is located just North of Roma, and - if built Surat Basin gas sector building - could see the development of around 1000 coal seam gas wells over thirty years, across nine hundred square kilometres. In August, Senex finalised all the required government approvals to develop the 425-well-stage-1, and have spent the time since, appraising the viability of the proposed project.

Senex has previously said stage one would happen over about five years, with the compressed gas collected and piped east for export out of Gladstone or into the East Coast domestic gas network. Back in 2015, Senex sold off part of the Western Surat Gas Project to Gladstone based gas exporter Santos GLNG for around $42 million and signed a binding 20-year gas supply agreement. Senex says recent agreements between the two companies will expedite development. “Senex and GLNG agreed on separate gas sales arrangements, paving the way for a final investment decision for an initial 16 TJ/day gas development with expansion potential,” they said this week.

“This initial development will focus on the Glenora and Eos blocks, with expansion potential into the neighbouring Mimas and Tethys blocks, now collectively referred to as Roma North.

“The gas sales arrangements provide flexibility and optionality for initial development of Roma North, with development of the remaining WSGP acreage subject to a future final investment decision.”

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