PERTH (miningweekly.com) – Diversified miner Glencore has agreed to a 50:50 joint venture (JV) with US energy major Peabody Energy to develop a brownfield opencut coal mine between the existing United and Wambo mines, in New South Wales.
The companies announced on Tuesday that the JV project was expected to start in mid-2017 and would combine leases held by Glencore’s 95%-held United Collieries, and Peabody’s Wambo operations, near Singleton.
Glencore would manage the combined mining operations using the Wambo mine's existing infrastructure, and Peabody would continue to operate coal washing and loading facilities.
The project was expected to deliver some six-million tonnes a year of saleable coal.
Glencore said in a statement that the JV would realise major synergies between the two neighbouring operations and would deliver optimal resource recovery and infrastructure use, while significantly reducing operating and capital costs.
In 2013, Wambo opencut operation produced 2.6-million tonnes of saleable coal, while Peabody’s North Wambo underground mine produced 3.5-million tonnes of saleable coal. The project is one of Peabody’s largest operations and employs over 500 people.
Glencore’s United project has a development consent to produce up to 2.95-million tonnes a year of saleable coal. It was planned that the run-of-mine coal would be washed on site and the coal transported to the Wambo coal loader using haul trucks.
The JV project was not expected to increase Glencore’s overall output from the Hunter Valley region, as output from the company’s existing operations were expected to decline by 2017, meaning that the JV would allow the mining firm to grow value for shareholders without growing volume.
The project was subject to the relevant federal and state government approvals.