1000-job revival with new $120M CQ mine

A town gripped in the coal industry's up-and-down cycle could have finally found its steadying force in a "world-class" mine.

Olive Downs North is likely to become Pembroke Resources' first functioning mine, which stems from a $120m deal with Peabody Resources. The mine is located near Moranbah, north-west of Rockhampton. Picture: Mine Atlas

A TOWN gripped in the coal industry's up-and-down cycle could have finally found its steadying force in a "world-class" mine.

Moranbah, nestled in the heart of the Bowen Basin, was the obvious choice for Australian-based company Pembroke Resources to invest $120 million to acquire Olive Down Complex from Australian subsidiaries of Peabody Energy Inc and CITIC Resources Holdings Limited.

As Pembroke move "full speed ahead" through the development phase, with environmental assessment underway and planning approvals submitted, director Barry Tudor said jobs were on the near horizon.

He projected between 500-700 people will be employed during the development and construction phase of the company's wholly owned Olive Downs South (ODS) and Willunga sites.

But Pembroke's majority stake (83%) in Olive Downs North (ODN) could see 100 jobs up for grabs within six to nine months, pending approval from the existing Japanese minority parties.

"Work is in progress to consummate that deal," Mr Tudor confirmed.

Mr Tudor describes the project as a "generational mine", with a target to extract 14 million tonne per annum of low-cost coking coal across the mine's 30-year lifespan.

Should operations ramp up, the capital cost is expected to be about $1 billion.

Once functioning at full-capacity, the Olive Downs complex is expected to employ a 1000-strong workforce

Mr Tudor said construction on the largest "standalone project", comprising of ODS and Willunga, is expected to begin in the second half of 2019 with mining operations to commence in early 2020 .

THE $1 billion Olive Downs mine proposal near Moranbah is one step closer, with the environmental assessment process underway. Picture: Mine Atlas

Mr Tudor explained the sites had never existed as a functioning mine, and the site required key infrastructure including a wash plant and rail spur to transport the coal to Mackay for export to the "traditional market".

"Japan, Korea, China, probably in that sort of order, potentially India, so the traditional customers of Bowen Basin metallurgical coal," Mr Tudor said.

The multi-million dollar investment, which includes an agreed royalty, may be Pembroke's first investment in the Bowen Basin, but certainly not their last.

With backing from private US private equity firm Denham Capital, Mr Tudor confirmed the company are on the lookout to expand their portfolio in the Bowen Basin.

Isaac region mayor Anne Baker is one of the driving forces behind a bill before parliament, aiming to end the 100% FIFO work practices. Picture: Isaac Regional Council

The Isaac Regional Council, which governs Moranbah, are currently travelling greater Central Queensland to spread the word on their Strong and Sustainable Resource Communities Bill 2016, which asks for an end to 100% FIFO work practices.

Moranbah is just one of many mining towns to have suffered the impact of a fly-in-fly-out workforce, and the Bill hopes to create genuine choice and opportunity for local workers.

Mr Tudor acknowledged the community's concerns regarding a FIFO workforce.

"It's a way off, but what we feel strongly about is we want to be a valued participant in a community for a long time," he said.

"So this is a large new project, new employment, and because it's brand new it's going to be world class, it will employ up to 1000 people when its in full swing, so it is a significant project for Queensland as well.

The Pembroke Resources project.

"If you want to be a valued project, in my experience and that of my team, is that you need to be valued in your own community and part and parcel of that is to employ people within your community so that they have a vested interest in the success of the mine.

"So we can understand the concerns about fly-in-fly out, but our approach is to be as much as possible a mine that is centred on the existing community that's there, the existing skill base within that community, and to leverage that skill base as a valued participant of the economic prosperity of the whole region"

With coking coal prices reaching a five-year high of $US266 a tonne in November last year , Mr Tudor said the fluctuating nature of the resources industry doesn't have him concerned.

He explained Pembroke's move was not "opportunistic" of the high prices, rather a long-term investment buffered by low operational costs.

Originally published as 1000-job revival with new $120M CQ mine