Ashton Coal Mine

Location

The Ashton Coal Mine consists of both underground and open cut mines and is located approximately 12 km northwest of Singleton in the Hunter Valley, New South Wales.  The Ashton Coal Mine is adjacent to several other open cut and underground mines including Glendell (Xstrata), Camberwell (Vale), Lemington (Rio Tinto), Ravensworth (Xstrata), and Narama (Xstrata).  The underground mines in the area include Glennies Creek (Vale) and Newpac (Xstrata).

Ownership

Yancoal Australia acquired an initial 60% interest in the Ashton Coal Mine effective from December 2009 through its purchase of Felix Resources Ltd.  Following a further transaction that was completed in early 2011 where Yancoal Australia purchased International Marine Corporation Group’s 30% interest in the mine, Yancoal Australia now owns 90% of the operation.  The Ashton Coal Mine is operated as an unincorporated Joint-Venture between Yancoal Australia (90%) and Itochu Corporation of Japan (10%). Yancoal is the operator of the mine and provides the manager to the Joint-Venture.

Operational Description

The Ashton open cut and underground mines have a current production capacity of approximately 3.9Mtpa of high quality semi-soft coking coal and port allocation through Port Waratah Coal Services (PWCS) at Newcastle of 3.0Mtpa.  The coal is exported to Asian steelmakers.

Ashton produced and exported approximately 2.5 Mt of semi-soft coking coal in 2010.  The coal was shipped through the Port of Newcastle, New South Wales.  It is anticipated that production and sales from the operation will increase over the next few years to match increasing port allocation.

Ashton Coal is an owner/operator site with relatively few contractors employed. Major recent projects have included the expansion of the Coal Handling and Preparation Plant (CHPP) which allowed Ashton to handle the increased in run of mine (ROM) coal that was produced following start up of the underground mine. The expansion increased the capacity of the preparation plant from 400 tonnes per hour to 1000 tonnes per hour.

The underground mine has an estimated mine life of 18 years finishing in 2024 whilst an intensive exploration program is underway in the open cut areas to expand the existing open cut resource which currently stands at approximately 50Mt divided between the SE Open Cut (SEOC) (20Mt) and the future Western Open Cut (WOC) (30Mt). The development of the SEOC is waiting for final approval by the NSW Government. The proposed WOC area requires more drilling to confirm its future viability and will be subject to a separate development application to be lodged with the New South Wales Government. The application will be lodged at an appropriate time before the new mine area is required to extend the life of the Ashton project.

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