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MARCH 2014 - VOLUME 23 NUMBER 3 ® WORLD COAL MARCH 2014 www.worldcoal.com

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Page 1: MARCH 2014 - VOLUME 23 NUMBER 3 · MARCH 2014 - VOLUME 23 NUMBER 3 ... Jindal Steel and Power ... Coal of India Ltd, the state-owned coal miner,

MARCH 2014 - VOLUME 23 NUMBER 3

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Mining conditions are getting tougher, but the safety of operating personnel remains our top priority. How do you strike a balance between safety, efficiency and productivity? With the Sandvik Bolter Miner MB670 you can have it all. Our new and improved cutting and bolting system not only simplifies the process; it saves time and maximizes your productivity. Our unique machine design houses operators under a supported roof, while side screens provide security and comfort against rock fragments, dust and loose debris. The result? A completely safe working environment that delivers our fastest and most productive performance to date.

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CUTTING THE TIME TO SAFETY AND EFFICIENCY.THIS WAY!

Page 3: MARCH 2014 - VOLUME 23 NUMBER 3 · MARCH 2014 - VOLUME 23 NUMBER 3 ... Jindal Steel and Power ... Coal of India Ltd, the state-owned coal miner,

www.mclanahan.com

For more information, please visit:

Featured on the cover is a McLanahan rotary breaker at Black Panther Mining, a subsidiary of

Oaktown Fuels, in southern Indiana. McLanahan rotary breakers break down coal to meet processing specification, while efficiently

removing rock, timbers and other material that can cause wear and tear in downstream

processing steps.

COVER INFORMATION

World Coal (ISSN No: 0968-3224) is published monthly by Palladian Publications Ltd GBR and is distributed in the USA by Asendia USA, 17B South Middlesex Avenue, Monroe NJ 08831 and ad-ditional mailing offices. Periodicals postage paid at New Brunswick NJ. Postmaster: send address changes to World Coal, 17B South Middlesex Avenue, Monroe NJ 08831.

Annual subscription (monthly) £110 UK including postage, £125/E175 overseas (airmail), $175 US/Canada (airmail). Two-year discounted rate (monthly) £176 UK including postage, £200/E280 overseas (airmail), $280 US/Canada (airmail). Claims for non-receipt of issues must be made within four months of publication of the issue or they will not be honoured without charge.

Copyright © Palladian Publications Ltd 2014. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither does the publisher endorse any of the claims made in the advertisements. Printed in the UK. Uncaptioned images courtesy of www.bigstockphoto.com.

World Coal is a fully-audited member of the Audit Bureau of Circulations (ABC).An audit certificate is available from our sales department on request.

MARCH 2014 - VOLUME 23 NUMBER 3

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Regional Report: Indonesia

16 The Coal Potential Of SumatraDaniel Madre, Danmar Explorindo, Indonesia, describes the distribution and extent of known coal deposits in Sumatra, Indonesia.

Coal Handling & Storage

23 Supply Chain SimulationDr Harry King, Ausenco, Australia, explains how simulating the design options for new coal terminal stockyards can optimise efficiency.

29 Solving The ProblemMilton Carruthers, Scott Humphris and Grant Porter, Hatch Australia, discuss the construction and alignment of overland conveyors.

33 Fully LoadedBrian Jones and Craig Money, Matrix Design Group, US, discuss solutions for increasing efficiency in loadouts.

Breakers, Crushers & Sizers

37 Holding The LineJohn Klinge and Bill Dudenhoefer, Eriez, US, highlight strategies for protecting crushers, screens and conveyor belts from tramp metal.

41 Size MattersGeordie Edmiston, McLanahan, US, examines the options available to mineral processing projects for resizing coal.

Mine Dewatering

48 Relieving The PressureWilliam Harding, SRK Consulting, UK, discusses pore pressure control and slope stabilisation in opencast coal mines.

3 Comment

5 Coal News

14 Industry View: The UK’s Clean Coal BridgeTony Lodge, Centre for Policy Studies, UK.

53 The Trouble With WaterAdvanced mine water management can offer mine operators not only economic and environmental payoffs, but also social benefits. Gordon Cope explains.

Coal Waste Management

57 The Clean Up ActBill Betke and Boyd Ramsey, GSE Environmental, US, discuss potential solutions for coal waste disposal in an evolving regulatory environment.

Underground Conveying & Haulage

61 Don’t Risk ItSytze Brouwers, Fenner Dunlop BV, the Netherlands, explains the safety testing and certification regimes for conveyor belts in underground coal mines.

Power Market Report

64 The Steps To IgnitionDr Reinhold Elsen, Guido Schöddert, Christoph Götte and Dr Tobias Ginsberg, RWE Power AG, Germany, detail the construction and initial operation of a lignite-fired power plant.

70 Fire In The Coal MillDerek Stuart, AMETEK Land, and Todd Collins PE, Hoosier Energy, Merom, US, discuss available techniques for detecting early signs of mill fires and explosions.

75 A Dynamic ModelJohn Goldring, RJM International, explains how using virtual models of power plant performance can help plant operators adjust to changing industry regulation and challenges.

Page 4: MARCH 2014 - VOLUME 23 NUMBER 3 · MARCH 2014 - VOLUME 23 NUMBER 3 ... Jindal Steel and Power ... Coal of India Ltd, the state-owned coal miner,
Page 5: MARCH 2014 - VOLUME 23 NUMBER 3 · MARCH 2014 - VOLUME 23 NUMBER 3 ... Jindal Steel and Power ... Coal of India Ltd, the state-owned coal miner,

Managing [email protected]@worldcoal.comEditorial [email protected] [email protected]

Advertisement [email protected]@worldcoal.comCirculation [email protected]/Marketing [email protected]

Website [email protected] [email protected] Baxter Gordon Cope Michael King Ng Weng HoongPublisher Nigel Hardy

Palladian Publications Ltd15 South Street, Farnham, Surrey, GU9 7QU, UK t: +44 (0)1252 718999 f: +44 (0)1252 718992w: www.energyglobal.come: [email protected]

Jonathan Rowland Editor

I n 1997, Sweden passed its Vision Zero plan into law, pledging to eliminate road fatalities and injuries. Since then, the country has achieved remarkable progress and now boasts the safest roads in the world: according to a

recent article in The Economist, only three Swedes in every 100,000 die on the roads each year – well below the average 5.5 per 100,000 across the EU and 11.4 per 100,000 in the US.

The reduction in the number of people dying on Sweden’s roads is not unique. Since road accident deaths peaked in the 1970s, the number has been consistently dropping in rich countries (although it is still on the rise in poorer countries as car sales rise). But Sweden has achieved much greater success than others.

In analysing the country’s achievements, it is its road planning that should come in for much of the praise. Swedish roads are built with as much thought for safety as for speed or convenience. Measures that may be considered irritating (low urban speed limits) or excessive (building 1500 km of 2+1 roads – where each lane of traffic takes turns to use a middle lane for overtaking) in other areas are now standard in the Scandinavian country. Meanwhile, a tough line on drink driving means that less than 0.25% of drivers tested are over the limit.

The next step, suggests The Economist, will be to reduce the impact of human error further – perhaps eventually doing away with the driver altogether. The Swedish car manufacturer, Volvo, will run a pilot programme of driverless cars in Gothenburg in 2017 in partnership with the Swedish transport ministry. Before then, measures that include putting breathalysers in cars to warn against drink driving and the faster implementation of safety features, such as warnings for speeding and unbuckled seatbelts,

have been mooted. Whether such moves will enable Sweden to hit its Vision Zero target, only time will tell: but it is well on its way.

The coal industry has also made substantial progress in reducing the number of injuries and fatalities that occur in mines around the world. But here too, there is still much work to do. Perhaps the most sobering statistic given by the US Mine Safety & Health Administration (MSHA) in its recent discussion of mining fatalities in the US was that deaths continue to occur that could be prevented by easily available technologies, such as proximity detection systems. Despite a large roll out of such systems in US

mines, last year four lives were still lost that could have been prevented by them, according to Joseph Main, assistant secretary of labor for mine safety and health.

Meanwhile, in China, the progress Shenhua has made in improving that country’s mine safety record – which resulted in it winning the Leadership on Mining Safety category at the World Coal Association’s Leadership & Excellence Awards last year – is impressive, but overall the world’s largest coal mining country remains a long way behind its Western

counterparts when it comes to mine safety. “We simply do not accept any deaths or injuries on our roads,”

said Hans Berg of Sweden’s national transport agency. In such a culture, any accident is a failure. Yet, in these straitened times in the mining industry, discussions about safety can be drowned out by all of the talk about optimising productivity, cutting costs and maximising shareholder value. Yet if there is even one miner that does not return home at the end of shift, it does not matter how much money his or her company makes or how much value it is creating, it is still a failure.

DEATHS CONTINUE TO OCCUR THAT COULD BE PREVENTED BY EASILY AVAILABLE TECHNOLOGIES, SUCH AS PROXIMITY DETECTION SYSTEMS.

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March 2014 | World Coal | 5

U S-based coal miner, Peabody Energy, has

launched a global campaign to promote

the use of clean coal technologies around

the world. The Advanced Energy for Life

campaign will “work to educate and activate

world leaders, multinational organisations,

institutions, stakeholders and the general

public,” the company said in a statement.

Commenting on the launch, Gregory Boyce,

CEO of Peabody Energy, noted that “more

than a decade ago, the UN Millennium Goals

called for a rapid halving of extreme global

poverty by 2015 [...] Yet today, 3.5 billion people

lack adequate access to energy and more than

4 million people needlessly die each year from

the effects of energy poverty. We have the

technologies and the global resources to end

this crisis. All of us must work together toward

realistic solutions.”

Demographic trends are also driving

the need for affordable energy, as the global

population is expected to hit 8.1 billion by

2025, according to the UN Population Fund.

Meanwhile, the UN Department of Economic

and Social Affairs predicts that the number

of people living in urban areas will grow by

more than 70 million/year to 2020. As a result,

“all energy forms are necessary to end global

energy poverty and increase access to low-cost

electricity,” Peabody continued in its statement.

The campaign will focus on three core

elements:

n A digitally-based education programme

highlighting the widespread benefits of

inexpensive energy access and the vital role

coal-fired electricity can play in solving the

world’s energy issues.

n A research institute that will develop and

distribute studies and policy-oriented

intellectual capital.

n Direct outreach to governments, institutions

and other stakeholders toward actions

that increase energy access and expand

the development and use of advanced

technologies.

Boyce concluded: “The drive by some

to reduce coal use and make energy scarce

and expensive is unsustainable [...] We

need to recognise the enormous health and

environmental benefits in ending energy

poverty, eliminating household air pollution

and increasing access to low-cost electricity.

Everyone in the world deserves to live as well

as those in developed nations. Let’s use more

energy, more cleanly, every day.”

S ome of India’s biggest companies –

including Tata, Jindal Steel and Power

and Adani Power – are among those to have

had their coal block allocations cancelled

by the Indian Ministry of Coal over delays

in developing them. In total, 31 blocks are

expected to be cancelled.

“The ministry has already sent notices to a

number of companies about the de-allocation,”

said N.C. Joshi, a coal ministry spokesman.

“Some others will be intimated soon.” The

de-allocated blocks will now be given to

Coal of India Ltd, the state-owned coal miner,

but may be offered to other developers at a later

date, the coal ministry said.

The move puts billions of dollars of

investment in question. The Tata Group, in a

joint venture with South Africa’s Sasol Ltd, was

planning to invest US$ 10 billion in a coal-to-oil

project using coal from the north of the Arkhapal

and Srirampur coal block in the eastern state of

Odisha. According to Reuters, the joint venture

filed a petition in the Delhi High Court against

de-allocation, which resulted in the court

asking the government not to proceed with the

move. Jindal Steel, which has plans for its own

coal-to-oil project, has also promised to take the

government to court.

Both Tata and Jindal also blamed the

government for the slow speed of development:

“The coal ministry took 18 months to decide the

boundary of the coal block and, secondly, the

state government, over the past three years, has

not even granted the prospecting licence,” said

a spokesperson for Jindal. Meanwhile, Tata also

claimed it was still waiting for the mandatory

prospecting licence from the government,

without which it is unable to proceed with

developing the project.

INDIA Government de-allocates coal blocks over slow development

US Peabody Energy launches the Advanced Energy for Life campaign

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6 | World Coal | March 2014

R esults from the mining majors have

highlighted the continuing struggle

against lower prices with BHP Billiton reporting

drops in the average realised prices of hard

metallurgical coal (18% down), soft metallurgical

coal (10% down) and thermal coal (10% down).

Mine more, spend lessBHP Billiton, which reported its results for

H2 2013, presented the strongest results with

underlying EBIT for its coal business up from

US$ 431 million on the same period in 2012 to

US$ 510 million. This was “underpinned by

productivity led volume and cost efficiencies”,

which contributed US$ 779 million to earnings,

the company said in a press statement.

BHP Billiton announced a 22% increase in

metallurgical coal production to 22 million t,

while thermal coal was inline with 2012

production at 37 million t. This included record

production across its Queensland metallurgical

coal mines (South Walker Creek, Saraji and

Poitrel) and New South Wales and Cerrejón

thermal coal operations, offsetting declines

at Illawarra (metallurgical coal) and BECSA

(thermal coal).

A similar theme was found throughout the

results. Rio Tinto reported that “aggressive cost

and productivity improvements” delivered

US$ 442 million to underlying earnings, while

Anglo American reported “early progress” in

its Driving Value programme, particularly in its

metallurgical coal business. Here, production

increased by 30% with its Moranbah North

underground mine lifting longwall output by

39% “on the back of an improvement in cutting

hours, an increase in automated cutting rates

and reduced unplanned downtime”. Rio Tinto

reported record production of semi-soft

metallurgical coal (up 17%) and thermal coal

(up 11%).

Reporting its production for 2013,

Glencore Xstrata said output increased 4% on

2012 to 138.1 million t as a result of growth

projects at Prodeco (up 26% to 18.6 million t) and

Australia thermal coal (up 9% to 57.7 million t).

Currencies help…A stronger US dollar against the Australian

dollar and South African rand, among

others, also helped to buoy up revenues with

BHP Billiton saying such currency trends

boosted its coal revenues by US$ 404 million.

Meanhile, Rio Tinto reported just over a

US$ 1 billion boost to its underlying earnings

across all commodities, as a result of favourable

currency movements.

… but low prices still weigh heavily on earningsDespite this, low prices still had a heavy

influence on miners’ results. BHP Billiton was

the only major to announce higher earnings.

Glencore Xstrata was the best of the rest,

announcing an 8% drop in its total coal revenues,

“as lower realised coal prices

impacted the coal industrial business”.

Meanwhile, Rio Tinto reported underlying

earnings down to US$ 33 million from

US$ 309 million in 2012 as a result of

“significantly lower prices” and Anglo American

delivered an underlying profit of only

US$ 46 million in metallurgical coal – an 89%

drop on the previous year. Its thermal coal

revenue also dropped by 32% to US$ 541 million.

“Excess supply of metallurgical coal

continued with nearly all major exporting

countries increasing output in 2013, putting

continuing pressure on premium hard

metallurgical coal prices in H2 2013,” Rio Tinto

noted. “Global thermal coal prices [also]

continued the weaker trend of the past two years

with the Newcastle Index recording and

year-on-year fall of 10%, finishing the year on

US$ 86/t,” the miner continued.

Reasons to be positiveThe results mark solid performances by the

mining majors amid the prolonged softness

in commodity markets. And looking forward,

there may be reason for cautious optimism.

Restructuring in the US coal industry should

reduce the volume of coal on the global market,

while coal demand across most markets is

expected to remain solid on the back of high gas

prices, said Glencore Xstrata. Overall, a stronger

recovery in the global economy should offer

continued support for commodities demand,

albeit at more moderate rates of growth, noted

BHP Billiton, as the global trend towards

urbanisation and industrialisation sustain

demand for key commodities, including crude

steel (iron ore and metallurginal coal) and

thermal coal.

INTERNATIONAL Global mining companies release 2013 results

ELECTRIC POWER Conference + Exhibition1 - 3 April 2014St Louis, USwww.electricpowerexpo.com

Global Power Markets7 - 9 April 2014Las Vegas, USwww.platts.com/conference

Coaltrans China10 - 11 April 2014Shanghai, Chinawww.coaltrans.com/china

Mercury Emissions from Coal22 - 25 April 2014Clearwater, USmec10.coalconferences.org

Coal Prep International 201428 April - 1 May 2014Lexington, USwww.electricpowerexpo.com

Coaltrans West Coast7 - 8 May 2014Vancouver, USwww.coaltrans.com/westcoast

Coaltrans Southern Africa Networking Forum12 - 13 May 2014Cape Town, South Africawww.coaltrans.com/southernafrica

Coaltrans Asia1 - 4 June 2014Bali, Indonesiawww.coaltrans.com

AIMS 2014: High Performance Mining11 - 12 June 2014Aachen, Germanywww.aims.rwth-aachen.de

COAL-GEN20 - 22 August 2014Nashville, USwww.electramining.co.za

ACPS 201415 - 18 September 2014Gold Coast, Australiawww.acps.com.au/conference-2014/home

Electra Mining Africa 201415 - 19 September 2014Johannesburg, South Africawww.electramining.co.za IMEX 201423 - 24 September 2014Las Vegas, USimex2014.com

Coaltrans World Coal Conference12 - 14 October 2014Copenhagen, Denmarkwww.coaltrans.com

DIARY DATES

Page 9: MARCH 2014 - VOLUME 23 NUMBER 3 · MARCH 2014 - VOLUME 23 NUMBER 3 ... Jindal Steel and Power ... Coal of India Ltd, the state-owned coal miner,

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8 | World Coal | March 2014

NEWSINBRIEF

W orld Coal presents its monthly round up

of news from coal projects in Australia,

Botswana, Canada, the Kyrgyz Republic,

Mongolia, Mozambique, New Zealand,

South Africa and Tanzania.

Australia

Anglo AmericanAnglo American has said it will cut jobs at the

Drayton coal mine in New South Wales, after

delays to planning approvals held back the

expansion of a nearby project designed to extend

the mine’s life. The company said it would

move to a five-day roster at the Drayton thermal

coal mine from the current seven days, slowing

production to preserve remaining reserves. It did

not say how many jobs would be lost.

Australian Pacific CoalAustralian Pacific Coal and Linchpin Capital

Group have signed a non-binding agreement

to jointly develop the South Clermont coal

exploration tenement in the Bowen Basin

coalfields. Under the terms of the agreement,

the two companies will initiate an exploration

programme to complete proving the Clermont

coal resource and bring the deposit into

production. Initial indications show that this has

the potential to be an opencast operation.

Cockatoo CoalCockatoo Coal has acquired 90.2% of the

shares in Blackwood Corp. Ltd and will soon

exercise its right to compulsorily acquire the

remaining shares in Blackwood. The acquisition

will allow the Cockatoo Group to “maximise

operating and financial synergies across the

combined business,” according to a company

statement. The move will also allow it to optimise

development of the overall project portfolio

with a focus on the development of the Baralaba

expansion project.

Canada

Altitude ResourcesAltitude Resources has announced a NI 43 -101

coal resource estimate, comprising 15 million t, at

the company’s Palisades project in Alberta. The

resource comprises a 10.1 million t measured and

indicated resource and a 4.9 million t inferred

resource. An exploration target of 33 million t

has been identified for the Palisades area. The

study, carried out by Dahrouge Geological

Consulting, confirmed that the coal quality rank

is low volatile.

Canadian Dehua International Mines GroupCanadian Dehua International Mines Group

(CDI) has reportedly discovered a coalfield

estimated to have 7 billion t of reserves in

west Canada. If these estimates are correct, it

would make it the world’s largest metallurgical

coalfield, according to the company. Vincent Li,

chief engineer at CDI, told the Xinhua news

agency that analytic data showed that the

150 km2 field contains 7 billion t of coal, most

of which is buried within a depth of 1000 m.

Half of the total reserve is high quality

metallurgical coal.

Jameson Resources Jameson Resources has released the results of its

coke strength after reaction (CSR) tests for coal

quality at the south block of its Crown Mountain

metallurgical coal project in British Columbia.

The first three CSR results received for the

block have ranged from 67 – 74. The company

confirmed that these results indicate that the

Crown Mountain product is expected to be a

hard metallurgical coal. The prefeasibility study

continues to progress, with a completion date

expected by June/July this year.

Kyrgyz Republic

Celsius CoalCelsius Coal Ltd has announced that the

exploration licenses for its Kargasha and Kokkia

tenements, which together with the Min Teke

tenement comprise the Uzgen Basin metallurgical

coal project, have been extended for two years.

Mongolia

Guildford CoalThe Baruun Noyon Uul (BNU) coal

mine has been successfully and formally

commissioned for operations and sales by the

Mongolian Government and is now awaiting

final permitting for the coal transport company

that will deliver first sales from the mine to the

coal distribution hub at Ceke, on the Chinese

border. The BNU mine is situated approximately

130 km by road from Ceke.

Mozambique

Queensland BauxiteQueensland Bauxite has secured a further coal

project in Mozambique that has a potential

resource base of hundreds of millions of tonnes

of coal. The project is located 250 km from the

Palma and Pembra ports, giving Queensland

Bauxite useful access to existing infrastructure.

License 4453L covers 192 km2 and contains

99.9 km2 of Lower Karoo geology. Historical

drilling intersected 3 m coal seams within the

top 40 m. There is also significant prospective

at depth, which has yet to be tested. Should the

tenement contain a coal seam of bituminous

to anthracite grade, as has been reported from

previous drilling, the license may host over

250 million t in situ coal.

New Zealand

Bathurst ResourcesBathurst Resources has announced a further

delay to the opening of its new Denniston Plateau

mine on the west coast of New Zealand with

the loss of 29 jobs. The mine was due to open

in April 2014; however, it has been delayed

indefinitely, largely due to the slump in the coal

export market.

South Africa

Condor EnergyCondor Energy is to acquire a majority interest

in the Duel hard metallurgical coal project and

Tshipise 2 project in South Africa. The company

will purchase the projects from Hong Kong-based

Signet Coking Coal.

Tanzania

Walkabout ResourcesA field reconnaissance has been undertaken at

the Lindi project in Tanzania. Last year, Uranex

announced the discovery of outcrop coal on a

tenement adjacent to Walkabout’s holdings. The

company is currently assessing options for a

follow-up programme.

INTERNATIONAL A round up of developments from coal projects around the world

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10 | World Coal | March 2014

M ergers and acquisitions, contracts and

new partnerships: World Coal wraps up

the suppliers news from the last month.

Mining

ADDCAR SystemsUGM Holdings has bought ADDCAR Systems, a

manufacturer of highwall mining systems, from

Arch Coal for US$ 21 million. ADDCAR had

been a wholly-owned subsidiary of Arch Coal

following the acquisition of International Coal

Group (ICG) in 2011. The sale includes all

licenses, patents and technology related to the

ADDCAR highwall mining system and its

manufacturing facility in Ashland, Kentucky.

Also included in the sale are all existing contract

mining and equipment lease agreements. UGM

will pay the US$ 21 million in three installments.

Additional terms were not disclosed.

Dassault SystèmesDassault Systèmes has extended its relationship

with its Indian partner, EDS Technologies, to

include the sale of GEOVIA mining applications.

EDS Technologies has been a Dassault Systèmes

partner in India since 1998, serving the

aerospace, automotive, industrial machinery,

high-tech and electronics, infrastructure and

engineering industries.

Eickhoff Corp.Eickhoff has received an order for two SL 750

longwall shearer loaders from Walter Energy, a

US producer of metallurgical coal for the global

steel industry. The machines ordered will operate

at a Walter Energy installation near Brookwood,

Alabama. The SL 750 shearer model is used in

medium height seams and has been successful in

coal mine operations across the globe.

HexagonHexagon has acquired Aibotix, a

manufacturer of intelligent multicopter

systems for high-efficiency aerial applications.

The acquisition strengthens the life of

mine solution offered by Hexagon’s

Leica Geosystems Mining division.

MaptekMaptek has acquired DroneMetrex, a developer

of technology for aerial photogrammetric

mapping from small drone aircraft. The

DroneMetrex system allows users to collect large

amounts of high-quality digital terrain data and

imagery for rapid assessment and integration

into the day-to-day processes of industries such

as mining, geospatial, agriculture, infrastructure

management and other applications requiring

highly accurate elevation data.

Sandvik MiningSandvik Mining and Maptek are to co-operate

on the development of integrated planning

and execution solutions and robust automation

systems for the mining industry. The

companies, which announced a memorandum

of understanding last month, will focus on

delivering automated mining equipment

that can connect to and work directly from

mine planning and measurement data from

Maptek products.

Voith TurboBukit Asam, an Indonesian mining company,

is to expand its operations at Tanjung Enim

coal mine in Sumatra, Indonesia, using

14 Voith TVVS fluid couplings on ten new belt

conveyors. The fluid couplings will have power

ratings of between 55 and 315 kW.

Handling and preparation

ContiTechContinental will purchase

Veyance Technologies, a global leader in

the field of rubber and plastics technology,

from The Carlyle Group for d 1.4 billion.

Veyance will be integrated into Continental’s

ContiTech division, the world’s largest supplier

of conveyor belts. Veyance has 27 plants

around the world and a workforce of about

9000 employees at the end of 2013. The

acquisition is subject to the approval of the

responsible anti-trust authorities.

MetsoMetso and Guangxi Liugong Group (LiuGong)

have obtained approval from the Chinese

authorities for a joint venture between the

two companies. Liugong Metso Construction

Equipment (Shanghai) will be headquartered

in Shanghai and will combine Metso’s expertise

in the track-mounted crushing and screening

business with LiuGong’s customer service and

manufacturing capabilities. The initial scope

of the joint venture will cover the design and

manufacture of localised versions of Metso’s

Lokotrack mobile crushers and screens, the

first of which is expected to be launched during

H1 2014. The products will be sold under

the dual branding: LiuGong Metso. The joint

venture will also promote Metso’s global track-

mounted crushing and screening equipment in

China.

TelestackTelestack Ltd has commissioned a TS 2058 radial

telescopic stacker for AES Genera, a coal-fired

power plant in the Port of Ventanas, Chile. The

stacker is part of a complete vessel unloading

and import material handling system upgrade

carried out to replace the existing infrastructure.

The telescopic stacker has a capacity of 2000 tph.

The machine incorporates a 1400 mm wide

conveyor belt with a 35 m outer conveyor and

23 m “stinger” extending inner conveyor to

maximise stockpile capacity. The telescopic

conveyor enables an additional 30% of material

to be stockpiled within the same footprint. Total

stacking capacity of the TS 2058 on a 180˚ radius

is 109,090 t of coal.

Power

Siemens EnergyThe South Korean engineering company,

eTEC E&C, has ordered a new steam turbine

from Siemens Energy for the extension of

the Seagull power plant in the Gunjang

industrial zone in the city of Gunsan in

western South Korea. The new facility’s

installed generating capacity will be 250 MW.

Delivery from the Görlitz plant is scheduled

for June 2015, with the facility scheduled to

produce heat and electricity for the first time in

Q2 2016.

Siemens will also supply two steam

turbines, along with auxiliary and ancillary

systems, for the lignite-fired Soma Kolin power

plant in Turkey. The 510 MW plant is being

constructed by Harbin Electric International.

The machines will be delivered between

August 2015 and January 2016; the plant is

scheduled to commence commercial operation

in April 2017.

SUPPLIERS NEWS Recent news from equipment and services suppliers to the global coal industry

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12 | World Coal | March 2014

DIGITAL HIGHLIGHTS The stories that are making the news on www.worldcoal.com

WCA urges EU to ensure affordable energy accessThe World Coal Association has called on

the EU to ensure access to affordable energy,

adding that coal is essential to delivering

affordable energy to Europe.

Value of US net coal exports since 2005According to the US Energy Information

Administration, the dollar value of US net

coal exports has increased more than threefold

since 2005.

China’s coal demand to peak in 2020 The Coal Industry Planning and Design

Research Institute has forecast that China’s

coal demand will peak in 2020, with the

country needing approximately 4.7 billion t.

Mining: Atlantic Coal to purchase new equipmentAtlantic Coal is to purchase six haul trucks and two dozers in a bid to

significantly increase ROM production at Stockton.

Handling: Troubleshooting belt cleanersThe five factors of correct conveyor belt cleaning.

Ports & Terminals: Aurizon upgrades coal haulage outlookAustralian rail freight company Aurizon has raised its guidance for its coal

haulage volume for the fiscal year 2013 – 14.

Power: Shell signs CCS agreement with UK GovernmentShell has signed an agreement with the UK Government to progress the

Peterhead CCS project to the next design phase.

Product News: RPM launches haulage simulation software solutionRungePincockMinarco has announced the launch of a new haulage

simulation software product, HAULSIM.

FROM OUR SECTORS

Links to all of these stories can be found at: www.worldcoal.com/DH/01

Keep up to date with us ...connect

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MOST READ ON WORLDCOAL.COM

1 Outlook for metallurgical coal is steady The global steel industry according to EY.

2 Peabody launches energy campaign Taking aim at energy poverty.

3 Russian coal terminal will create jobs Exporting Russian coal to Asia.

4 Mozambique coal project has potential Queensland Bauxite secures more coal.

5 Commercial coal gasification anniversary Celebrating 200 years of coal gasification.

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14 | World Coal | March 2014

AuthorTony Lodge is a research fellow at the Centre for Policy

Studies (CPS). He is author of Clean Coal – A Clean, Secure and Affordable Alternative, published by the CPS. He also advises the

British Parliament’s All Party Group on Clean Coal.

THE UK’S CLEAN COAL BRIDGE Tony Lodge, Centre for Policy Studies, UK

C oal-fired power continues to play

a crucial role in the UK generation

portfolio, providing 41% of electricity

generated across the country in 2012. This

contribution from the existing coal generation

fleet, as well as the associated supply industry

and infrastructure, is absolutely essential

in providing secure, flexible and affordable

energy supplies to the UK’s households and

businesses. In particular, retaining coal as part

of the UK’s energy mix will provide a hedge

against future volatility in the gas market that

would otherwise be passed directly on to the

consumer.

A new campaign in the UK argues

that it is vital that the remaining lives of

these unabated coal-fired power plants are

managed effectively and optimised to enable

maximum contribution to the UK’s power

requirements over the next decade, through

to the transition to the future low carbon

generation portfolio, which must include coal

with carbon capture and storage (CCS). This

would ensure continuity and progression in

the skills, capabilities and resources required

to support the development of clean coal with

CCS as part of that future generation fleet.

But the right policy signals are needed from

government for building the much needed

investor confidence in the coal supply chain,

including indigenous mining, ports and

transportation infrastructure.

With the support of an ambitious,

government-led CCS strategy, coal has the

potential to provide secure, affordable low

carbon energy through to 2030 and beyond.

Indeed, the UK Committee on Climate

Change in its carbon budget assumes a

significant role for CCS for coal and gas in the

UK’s 2030 energy mix.

The scale of coal’s current contribution and

its future potential cannot be underestimated.

Yet, in contrast to most of the main industrial

competitor nations, the future of the coal

mining sector is under serious threat from

an energy policy framework that is driving

premature closure of the current coal fleet,

which was largely built in the early 1970s. At

the same time, the construction of new high

efficiency CCS-ready coal-fired power plants

is effectively prohibited due to new legislation

called the Emissions Performance Standard.

The UK has also failed so far to deliver the

momentum required to seize the opportunity

presented by CCS technology. This is despite

the significant progress on deploying

large-scale CCS projects in other countries

(particularly the US) and the strong national

advantages that makes the UK one of the best

places to deploy the technology.

It is argued that a new strategy for coal is

urgently required as a key element of national

energy policy alongside gas, nuclear and

renewables. After all, the UK Government

announced a gas generation strategy in

November 2012. A new coal strategy will

allow a managed transition to CCS, thereby

ensuring coal’s continued contribution

to security, affordability and diversity of

supply in meeting Britain’s energy needs,

while sustaining highly skilled employment

for some 10,000 employees across the coal

resource sector.

There are a number of key policies that

the UK Government can deploy to create a

seamless bridge from existing unabated coal

generation to new coal with CCS. The policies

will maintain investment and operations at

UK underground and opencast coal mines.

Without this bridge, the mining industry and

access to the UK’s considerable coal resource

will be lost and become stranded.

The transition to CCSThe policies that could be adopted by the UK

Government include the following:

n Urgent and serious consideration should

be given to holding the draconian UK

Carbon Price Floor (CPF) at 2014 levels.

The original purpose of the CPF was to

help stimulate investment in low carbon

technologies, such as CCS; however, the

planned trajectory of CPF and resulting

divergence from EU carbon prices will

drive early closure of existing coal-fired

power plants, risking UK energy

security and driving up power prices,

without encouraging investment in low

carbon technology or impacting global

emission levels.

n The design and implementation of the

electricity capacity market should provide

existing coal-fired power plants with a

realistic expectation of recovering the

investment needed to ensure continued

reliable and flexible performance, while

meeting the costs of adhering to EU

environmental legislation and the CPF.

Coal-fired power plants can provide a

cost-effective contribution to power security

and price concerns over the next decade.

Conversely, the early demise of coal will

materially add to the risk of security issues

and price spikes. It will also increase

dependence on foreign gas imports.

n Emission Limit Values (ELVs) under the EU

Industrial Emissions Directive (IED) should

be grandfathered until 2030 with no further

tightening of emission limits under the EU

Large Combustion Plant Directive. This

could then encourage over 10 GW of existing

coal-fired power to continue through to the

2020s and bridge coal with CCS.

n Coal with CCS should be accelerated and

expanded through the urgent development

of two demonstration plants under the

current CCS competition.

Adoption of these policies would see an

effective transition in the UK from unabated

coal consumption to coal with CCS, the

retention of 10,000 direct jobs and the creation

of highly skilled roles at new CCS plants, in

coal mining and throughout the supply chain. It

can guarantee energy security and affordability

of electricity supply for the UK and provide a

hedge against gas price spikes. The window of

opportunity to deliver this is now.

WITH THE SUPPORT OF AN AMBITIOUS GOVERNMENT-LED CCS STRATEGY, COAL HAS THE POTENTIAL TO PROVIDE SECURE, AFFORDABLE, LOW-CARBON ENERGY THROUGH TO 2030 AND BEYOND.

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in Mineral SizersWorld Leaders

THE MMD GROUP OF COMPANIESW W W . M M D S I Z E R S . C O M

Originally established in 1978, to design and manufacture equipment for the UK underground coal mining industry, MMD patented the Twin Shaft Mineral Sizer. Since 1978, the company has refined and developed the Sizer design to the stage where MMD currently size over 75 different minerals, in over 60 countries.

However, coal remains at the core of the company’s business and MMD now produce a wide range of machines available for the coal industry. From the original pick and scroll machines; usually positioned close to the coal face, that reduce high volumes of ROM to a conveyable size, to segmented tooth machines designed for a specific product size in the coal preparation plant, and mobile IPCC systems for open pit operations.

MMD’s experience, together with a close working relationship with their customers has allowed them to develop the complete sizing solution.

World Coal 297x210+3mm.indd 1 5/23/2013 6:10:01 PM

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16 | World Coal | March 2014

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T he distribution of coal deposits in Sumatra, Indonesia, is controlled by the tectonic setting of collision between the Australian plate and the Eurasian plate. Older, high-grade coal is found on

both sides of the Barisan Mountains in the foothills. These deposits have potential for bituminous and metallurgical coal. Younger, lower grades of coal also occur on both sides of the Barisan Mountains. These deposits are located further away from the mountain uplift, in sedimentary basins where stable conditions have resulted in thick accumulations of coal.

Compared to Kalimantan, Sumatra has only a fraction of the coal tenements, even though the coal resources are of a similar scale. Coal tenements in Sumatra are clustered in areas where coal is outcropping in easily accessible locations. The future challenge is to locate the next

generation of coal deposits that are not so obvious. Huge potential for coal, ranging from lignite to sub-anthracite grades, remains to be discovered on both sides of the Barisan Mountains.

Tectonic framework of SumatraConditions suitable for the formation of significant deposits of coal have occurred throughout the island of Sumatra, despite the active tectonic setting. In Sumatra, plate collision is oblique, resulting in significant movement often felt as earthquakes.

The plate boundary of Sumatra is a classic example of an active subduction zone. A diagrammatic section through the island shows the main elements of this tectonic setting (Figure 1). In terms of coal potential, the main features are outlined below.

Daniel Madre, Danmar Explorindo, Indonesia, describes

the distribution and extent of known coal deposits

in Sumatra, Indonesia, and looks at the challenges of

future exploration.

March 2014 | World Coal | 17

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Outer island arcThis includes the islands of the Mentawai Archipelago. Tectonic movement in response to mega-thrust earthquakes makes this geological setting unsuited to the accumulation of significant coal deposits. Lignite grade coal, which is relatively thin and often contains high sulfur, has been found

on Nias Island. Overall, the outer island arc is not prospective for the discovery of coal.

Forearc basinThis area includes the entire west coast of Sumatra. Coal occurrences are known throughout the forearc basin of Sumatra.

These coal occurrences can be classified into two basic groups, older and younger coal seams, as follows:

Older coal seams (Middle Miocene)These coal deposits occur within the foothills of the Barisan Mountains where the oldest sediments of the forearc basin have been uplifted and are now close to the surface. Coal seams greater than 3 m thick are common. Deposits have been reported from south of Bengkulu to Sibolga, a strike distance of more than 400 km. The coal seam quality is relatively high grade with total moisture contents of about 15% and calorific values often in excess of 6500 kcal/kg (adb).

These coal deposits are often relatively structurally deformed and limited in extent by structural controls due to close proximity to the uplift of the Barisan Mountains. Examples of these types of deposits are known in Bengkulu, Tapan, Painan and Mandailing. The size of these deposits is relatively small (10 – 100 million t) due to structural controls. Coal quality is often very good and the potential for metallurgical coal is possible due to relatively high heat flows caused by the Barisan uplift over time, as well as contact metamorphism as a result of volcanism.

Younger coal seams (Late Miocene to Pliocene)These coal deposits generally occur on the coastal plain of western Sumatra. Coal deposits are also relatively thick and laterally extensive, occuring throughout the west coast from south of Bengkulu to Meulaboh in the north, a distance of more than 1000 km. The deposits are relatively undisturbed in terms of their structure. Coal quality ranges from 30 – 50% total moisture and 3000 – 5500 kcal/kg (adb) energy, depending on their age. The age and coal grade of these deposits is generally directly proportional to the distance from the Barisan Mountains.

Examples of these types of deposits are at Tais, in Seluma regency, south of Bengkulu, and Meulaboh in West Aceh. Potential deposit size is relatively large and deposits Figure 2. Diagrammatic section through Sumatra modified after McCaffery (2009).

Figure 1. Regional tectonic setting of Sumatra (Amijaya et al, 2005).

18 | World Coal | March 2014

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numerous, with more than 100 million t documented.

Figure 3 shows the relative location of coal seams on a diagrammatic section through the forearc basin of Sumatra.

Volcanic arc (intramontane setting)When the Barisan Mountains formed, some coal deposits were caught up in the earth movements and formed outliers within the Barisan Mountains. These deposits are thought to be of a similar age and origin to those in the forearc basin. They have also been subjected to intensive deformation and are limited laterally by structural controls. The most well-known example of this type of coal is at Ombilin, east of Padang, West Sumatra, where coal mining has

continued for more than 100 years. There are other examples at Tambang Sawah, in the Lebong regency, and near Gunung Kerinci within the National Park area.

The coal seam quality is relatively high grade with total moisture contents of about 12% and calorific values often in excess of 7000 kcal/kg (adb). Potential deposits are relatively small and generally between 10 – 100 million t. The potential for metallurgical grade coal is also relatively good, as these coals have experienced significant paloethermal upgrading.

Backarc basinThe backarc basin is the most prolific of the coal forming environments in Sumatra. This is because, in these areas, stable tectonic conditions have

prevailed, facilitating thick accumulation and preservation of organic materials over long periods of time. Both South and Central Sumatra display evidence for this, with thick extensive coal deposits throughout many areas. Figure 4 shows a diagrammatic section through the backarc basin and the relative distribution of coal resources. The backarc coal deposits range in age from Early Miocene near the uplifted mountain range to peat swamps on the east coast of Sumatra where coal is forming today. Again, as in the forearc basin, the coal deposits can be divided into two broad groups as follows:

Older coal seams (Early Miocene)These are coal seams that occur close to the Barisan and other uplifted mountain areas. These deposits have similar characteristics to the older coal seams in the forearc and intramontane basins. They also have been subjected to deformation (although generally less than the forearc and intramontane deposits) and, as such, are less limited in lateral extent by structural controls. Examples of this type of coal are found in the provinces of Riau, in the north, Jambi, South Sumatra and Lampung, over a distance of more than 500 km.

The coal seam quality is relatively high grade with total moisture contents of about 16% and calorific values often in excess of 6300 kcal/kg (adb). Potential resources are relatively large between 100 – 1000 million t.

Younger coal seams (Late Miocene to Quaternary and Pliocene)Lampung, South Sumatra, Jambi and Riau all have coal resources with relatively thick seams (greater than 10 m is common), extending over large areas. Total moisture contents range from 25 – 60% and calorific values range from 5500 – 3000 kcal/kg (adb) depending on the age of the coal, which is directly related to the distance from the uplift of the Barisan Mountains.

Examples of this type of deposit are in South Sumatra and Jambi.

Figure 4. Diagrammatic section through backarc basin showing distribution of coal modified after McCaffery (2009).

Figure 3. Diagrammatic section through forearc basin of Sumatra modified after McCaffery (2009).

20 | World Coal | March 2014

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Hundreds of locations are known to contain thick coal deposits near the surface. Deposit sizes are of a massive scale, with billions of tonnes of resources in gently dipping coal seams over vast areas. Relatively little structural disturbance has occurred here.

Coal resourcesThe distribution of coal resources in Sumatra is shown in Figure 5. As might be expected, the resource of coal in the backarc basin areas far exceeds any of the other geological settings. More than 60 billion t of coal is estimated in this area. Most of this (59 billion t) is in the South Sumatra Basin. The majority of this resource is in younger age coal formations with total moisture contents of about 50%.

The apparent disproportionate concentration of coal in South Sumatra may reflect the level and history of exploration in the area. Much of South Sumatra is more developed, accessible by roads and infrastructure and, as a result, has experienced more exploration and coal discovery. With this in mind, it seems likely that Jambi and Riau have excellent potential for

significantly larger quantities of coal to be discovered.

For older coal seams in the backarc basin (closer to the Barisan Mountains and other uplifted areas), resources seem relatively small. However, deposits, such as Muara Bungo in Jambi and Indrapura in Riau, show that large resources are possible. Additional exploration in these areas is warranted.

In the forearc basin, younger lignite seams make up most of the currently known coal resource. Meulaboh, in West Aceh, has coal resources of more than 500 million t. Recent exploration work suggests that more coal is possible and will be discovered as more work is completed. Further south, in the northern part of the Bengkulu Block, significant resources of lignite are currently being explored and resources in this area are also likely to increase dramatically as more work is carried out. Significant coal resources, with grade equivalent to that at Bukit Asam, are also being exploited in North Bengkulu regency. Exploration work is steadily increasing coal resources in this area as well.

Older coal seams in the forearc basin may also be under explored.

Evidence for high grade coal in outcrops throughout the forearc basin for hundreds of kilometres suggests that the current resources may be under estimated. Although reported resources are small, production from these deposits near Bengkulu has continued for more than 25 years, while the remaining resources have remained constant.

In the intramontane setting, only one significant deposit has been exploited to date. This is at Ombilin. It seems unlikely that Ombilin is the only intramontane basin throughout the entire Barisan Mountains. Evidence for coal in outcrops is known in other places but no significant, systematic exploration in these areas has taken place. Protected forests and national parks may cover many of these areas as the location coincides with the Barisan Mountains nature conservation zone.

ConclusionThe easiest and most accessible coal deposits in Sumatra have already been found and are being exploited. Most of these locations were discovered many years ago where coal was recognised outcropping on the surface. At present, only 18% of all the Contract of Work areas for coal in Indonesia are in Sumatra. Large parts of the island are free of mining licenses, despite good coal potential in many areas. There is huge potential for the discovery of new coal areas where little or no previous exploration work has been carried out.

The future challenge for exploration will be to locate the next generation of coal deposits that are not so obvious and may not be expressed as outcrops at the surface. The regional distribution of the main coal formations of Sumatra suggests that the opportunity for discoveries of high grade coal with metallurgical potential occurs on both sides of the Barisan Mountains. Similarly, further discovery of younger, lower grade coal is also likely on both sides of the Barisan Mountains where no significant exploration work has been carried out. The potential is massive and the field is wide open.

Figure 5. The distribution of coal and peat resources in western Indonesia: brown represents coal aged 65 – 23 million years old; yellow is coal 23 – 2.5 million years old; and green represents coal 2.5 million years old until present time. Source: Indonesian Directorate of Mineral Resources 1990.

22 | World Coal | March 2014

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