Blair Athol coal mine life extended by 10 years

Blair Athol coal mine life extended by 10 yearsTerraCom has established a portfolio of coal mines in Queensland, Australia. (Image courtesy of TerraCom.)

Australian coal producer TerraCom (ASX: TER) has extended the life of its Blair Athol coal mine in Queensland’s Bowen Basin by about 10 years, following a reserves update. 

As of June 30, 2021, the mine’s marketable reserves totaled 19.5 million tonnes, TerraComm said. Based on a sales profile of two million tonnes per year, the company estimates that Blair Athol will run for another decade, giving the mine 14 years of operation under its ownership. 

TerraCom acquired Blair Athol in 2016 from Rio Tinto for only A$1 (about 72 US cents at today’s rates), at a time when coal prices were hitting historic lows and top miners decided to offload their coal assets. The company reopened the mine the following year.

Blair Athol’s life extension comes amid soaring thermal coal prices and record-low asset values, which is creating a complex situation for Australian coal producers. 

It also follows recent announcements by the biggest banks in Australia, the world’s biggest coal exporter, committing to phase out exposure to thermal coal by 2030. 

Some producers, including BHP (NYSE: BHP; LSE: BHP; ASX: BHP), are mulling their exit from the market. Others such as China’s Yancoal, Australia’s top independent exporter of thermal coal, have chosen to keep production rates and focus on coal quality. 

TerraCom has opted for extending the mine life through low-cost planning and productivity improvements.  

Blair Athol generates 3 million tonnes of high-quality thermal coal a year for export into Asian markets. 

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