National Trunk Rail's Martin Albrecht and Sekitan Resources' Trevor Bourne speak to the Chinchilla September TSBE forum.
National Trunk Rail's Martin Albrecht and Sekitan Resources' Trevor Bourne speak to the Chinchilla September TSBE forum. Derek Barry

Sekitan outlines plans for Wilkie Creek mine

THE future for Wilkie Creek coalmine is bright with over 120 job opportunities, the September TSBE forum in Chinchilla heard.

Sekitan Resources paid $10m to buy the mothballed Macalister mine from Peabody Energy in July and Sekitan CEO

Trevor Bourne told the Chinchilla forum that "sekitan" was the Japanese word for coal.

"That's relevant because our major customer will be Japanese," Mr Bourne said. Mr Bourne said Sekitan intended to bring Wilkie Creek back into operation very quickly.

"With the licences and infrastructure into place, our intention is to bring it back to three million tonnes per annum production by the end of next year," he said.

Mr Bourne said Sekitan had the opportunity to reset the cost base of the mine.

"We've got the ability to do things completely differently (to Peabody) and that makes a significant difference to the operating cost of the asset" he said.

Mr Bourne said Wilkie Creek had 600mt of resources while it had also obtained the licence to Horse Creek near Chinchilla which had 500mt.

"So we have over a billion tonnes of coal between the two assets," he said.

"Our plan is for three million tonnes per annum, up to five million and even greater if we are successful."

With a plan for at least 10 to 15 years of mining ahead, Mr Bourne said the company's biggest challenge was rail access out of the region.

"We can say politely that Aurizon are not very competitive and we've had to explore other options," he said.

"We believe we have a serious contender to do that which will bring costs down even further and we are certainly a supporter of NTR (National Trunk Rail) from a long-term perspective.

"Something has to change on this rail line for it to be competitive."

Mr Bourne said Sekitan were focussed on restarting the mine later this year and then slowly ramping up to full capacity next year.

"We've managed to reduce the strip ratio, which is how much overburden to coal, from around eight what Peabody were doing to around five to one which makes a significant cost reduction," he said.

"We are spending quite a bit of money upgrading the facility to increase the yield and with all these changes we can get coal to the port of Brisbane on the boat, with all costs, for $69 a tonne, which means we are profitable today."

Mr Bourne said their schedule was on track and they were looking to close on the deal this month.

"Then we are in a three month phase to remobilise, clean up the site and then commence mining," he said.

"We want first coal (out of) the ground around December this year and then the first shipment out February-March next year."

Mr Bourne said they would then mine at a low rate through the year and towards the end of 2016 they would get a new rail provider which would allow them to ramp up to three million tonnes a year.

Mr Bourne said they would mine the existing open pit for a couple of years "picking the low-hanging fruit" and the savings on Peabody operations would be in three areas.

"The first is improved mining practices, so by improving the strip ratio it reduces the amount of equipment and people on site," he said.

"We are also spending $16m on the wash plant and the upgrade will enhance the yield and make it more efficient.

"The other thing is Sekitan will be a thinly managed company with no overheads and managed from site and focussed on doing the operation right and smart."

Mr Bourne said they would be hiring 126 people in the coming months and it would all be local labour - not fly in fly out.

While Sekitan is associated with clean coal technology company Exergen (which was Mr Bourne's background), the Wilkie Ck operation will not be using the experimental technology.

Mr Bourne said it was used but only in the demonstration phase at a Victorian operation and they were seeking funding from the market to take it further.  


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