Peabody (NYSE: BTU) has announced it is finally proceeding with reventilating the North Goonyella coal mine (in consultation with the Queensland Mine Inspectorate).
The North Goonyella coking coal mine was shut down last September following high methane concentrations followed by a spontaneous combustion event in the midst of a longwall move. While Peabody released its preliminary findings into the event two months ago, the Queensland Mines Inspectorate has not released its report on the incident citing the requirement to analyse substantial gas data to determine all causative factors. The investigation was initiated following the fire. Industry pundits say that the release of information prior to prosecution may weaken the regulator’s case.
Others in the industry have speculated that the actions of the Queensland mines inspectorate may have ultimately become the catalyst of the event. Despite the conjecture of who may have been at fault, the direct and indirect costs of the incident are believed to be in the order of hundreds of millions of dollars both for Peabody Energy and the State of Queensland.
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With Peabody recently announcing impairments and a substantial $125M+ insurance claim for the fire, the need to get it right this time around can’t be underestimated. Prior to the incident, Peabody announced plans to extend the mine’s life to 2026 with a new southern section in the mine. But it all now hangs on a successful reventilation.
Milestone for Peabody’s North Goonyella operation
The re-ventilation of North Goonyella marks a milestone for Peabody following the September mine fire and a considerable wait for the Queensland Mines Inspectorate to approve its plans for re-entry.
It is, however, an activity that is fraught with a significant range of unknown variables that may delay the final re-entry one former mines inspector told AMSJ.
“They (Peabody) won’t really know how the mine is going to respond until each segment is stabilised. Segment by segment they will need to constantly re-evaluate conditions in the mine. They don’t really want to burn it again” he said.
It is believed that the Queensland Mines Rescue service has deployed the GAG inertisation unit to the North Goonyella site in preparation for a potential re-ignition of the mine.
Peabody says that reventilating North Goonyella will be conducted progressively and expected longwall production is expected to resume in 2020.
“This marks an important first step in the next phase of activities aimed at resuming normal operations at North Goonyella,” said Glenn Kellow, Peabody President and Chief Executive Officer.
“As we move forward in the process, we appreciate the ongoing support of our many stakeholders including our employees, the union, customers, the Inspectorate, neighbouring mines, the community of Moranbah and countless others.”
All physical activities in advance of re-ventilating Zone 1 of the mine are complete, including the installation of ventilation fans, emergency-sealing doors and real-time gas monitoring equipment.
Last month Peabody advised of the departure of the Mine Manager and Ventilation Officer at the helm during the mine fire.
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