Published: November 16, 2021 |

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Fitzroy Australia Resources Restarts Broadlea Coking Coal Mine, Queensland

Fitzroy Australia Resources, which is backed by U.S. investment firms AMCI and Riverstone, has restarted its 1mn t/yr Broadlea coking coal mine in Queensland, Australia to capitalize on strong coal prices.

Fitzroy has had Broadlea on care and maintenance during the low price period resulting from Covid-19 economic lockdowns. It describes the mine as a swing producer that is used as a satellite operation to its 3.5mn t/yr Carborough Downs tier-two coking coal and pulverized coal injection (PCI) coal mine during favorable market conditions.

Fitzroy has now joined a growing number of Australian coal producers, including U.S.-Australian firm Coronado, looking to ramp up production to benefit from the stronger coal price environment. It has contracted mining contractor Golding to re-establish open-cut mining at Broadlea from the start of November for an initial term of six months.

Continued strong prices could see the firm make a final investment decision on its 5mn t/yr Ironbark hard coking coal mine, which has all approvals in place and was expected to start shipping in 2020 before the pandemic derailed plans. The underground Ironbark mine will share infrastructure with Carborough Downs and Broadlea.

Fitzroy bought Carborough Downs and Broadlea from Brazilian firm Vale in 2016. It has extended the life of Carborough Downs, which Vale had planned to close in early 2017, and used Broadlea as a swing producer, after Vale had closed the mine in 2009. The development of Ironbark would more than double Fitzroy’s coking coal production to around 9mn t/yr, giving it a significant presence in the Australian export market.

Firm coking coal prices and an increasingly robust outlook for medium to long-term prices is leading to an expected investment boom in the sector in Australia, although high costs and skills shortages may delay the supply response.

Spot premium hard coking coal prices more than trebled from early May to $409.75/t fob Australia in mid-September before easing slightly. Argus last assessed the premium hard low-volatile coking coal price at $396.80/t fob Australia on November 12, up from $110.95/t on May. 11 Lower grade metallurgical coal prices have also increased at a slightly lower rate.

AMCI sold Vale’s Carborough Downs, Broadlea, the Isaac Plains coking coal mine and 61pc of the Integra thermal coal joint venture for A$835 million plus A$157 million in debt in February 2007. Vale took a $1 billion write-down on these Australian coal assets in March 2013, blaming weak market conditions. Vale has offloaded its Australian coal assets by selling Isaac Plains to Australian independent Stanmore, its 50 percent stake in the Eagle Downs project to Australian mining firm South32, and Integra to Switzerland-based mining and trading firm Glencore and Australian private-sector mining firm Bloomfield.

Source: Argus Media

About Fitzroy Australia Resources
Fitzroy Australia Resources is a new force in the Queensland metallurgical coal mining industry with a portfolio of existing operations and a pipeline of growth projects. In its short history they have successfully reinvigorated operations at Carborough Downs underground mine, breathed new life into the Broadlea open cut, and their next venture is the Greenfields underground longwall and board and pillar - Ironbark No.1. Innovative thinking and decisive leadership are the hallmarks of the company. They deliver a challenging and rewarding environment and their success is built on the foundation of being a people business that mines coal.

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