Australian Mining catches up with Centennial Coal to see what’s in store for 2019.
Centennial Coal, like many mining companies, has had its ups and downs over its four-decade history. One of New South Wales’ premier coal companies, Centennial provides around 40 per cent of the state’s coal-fired electricity capacity, with five operational underground mines across the state.
There is perhaps no better sign of the company’s resilience than the Myuna colliery in New South Wales, which was purchased by Centennial in 2002.
The mine was facing closure at the height of the industry downturn until the implementation of the sophisticated Herringbone mining method helped to turn the mine’s fortunes around.
This unique approach, which went through significant research and development, allowed the team to implement unsupported cuts in order to improve strata control, improved productivity and lower costs.
Centennial was recognised at the 2017 Australian Mining Prospect Awards in the Innovative Mining Solution category for Herringbone’s ability to provide a safe and sustainable solution to a mine that faces a number of mining constraints.
The Herringbone method allowed the mine to continue to supply and meet the coal quality needs of its customer, Eraring Power Station, and continue to provide long-term, secure employment for its workforce of nearly 300 people.
“Myuna implemented the dual-bolter miner super panel as the optimum mining method and designed a herringbone layout involving unsupported cuts for improved strata control, which lowered costs and increased productivity at the site by 80 per cent,” says Mick Cairney, Centennial Coal’s managing director and chief executive officer.
“This mining method resulted in a significant improvement in workforce culture with less manual handling and musculoskeletal injuries and improved safety conditions.”
In 2018 Myuna produced 2.17 million tonnes, its highest production year in the nearly 40-year history of the mine — while also recording improvement in injury rates, with a 12-month moving average lost time injury frequency rate of 10 in 2018, down from 28 in 2017.
As a large industrial energy user, Centennial is not immune to the significant increase in electricity supply costs and as a result has undertaken a feasibility assessment for solar generation.
Centennial owns significant land holdings many with potential electricity connections, the combination of which forms a solid basis for the establishment of solar systems.
Centennial is progressing a two-megawatt solar farm at the Airly mine in the Western Coalfields of New South Wales, representing a capital investment value up to $5 million and a solar installation project at the disused Awaba Colliery, which was closed in 2011.
Safety issues, such as tailings management, are another strong focus for the company. Centennial has three tailings management facilities – Northern Coal Services, Western Coal Services and Clarence Colliery.
Clarence experienced an environmental incident involving coal fines in 2015 and Centennial has endeavoured to do better since. The company uses a tailings process that is quite different to the materials involved in well-publicised and significant environmental incidents at an international level.
More commonly called ‘rejects’, Centennial has both coarse and fine variants that are emplaced in walls (for coarse rejects) or dams (for fines rejects) in facilities called reject emplacement areas (REA).
Centennial has been closely assessing reject emplacement risks and have driven changes in the approach to tailings facility management, Cairney says.
“Over the past few years, Centennial has implemented an REA Oversight Committee that has carriage of an REA Standard and the management of an audit process,” he says.
“All REAs are designed by external experts and are periodically inspected by experts, with reporting to the CEO through the REA Oversight Committee.”
With a 60/40 domestic vs. export split of coal sales, the company’s coal contracts with domestic generators tend to be for longer-term projects, with volumes and prices negotiated and settled in advance. This provides a high degree of business certainty for a substantial portion of output.
It remains Centennial’s priority to productively and efficiently grow the business to ensure continued commercial viability, whilst striving for continual improvement in environmental and social performance, states Cairney.
“Global demand for coal is strong — in providing high-quality coal to growth markets, Centennial has a role in ensuring access to secure, reliable and affordable energy,” he says.
“It is more evident than ever that, to remain viable, there must be balanced financial returns with environmental and social concerns. Strong and positive environmental, social and governance outcomes are critical, together with the deployment of new technologies and capabilities.”
The digital journey
The company has grown over the last four decades from what was originally Preston Coal Company — a $2 million mine with 30 employees and a capacity of 150,000 tonnes a year — into Centennial Coal, a five-mine operation with over 1600 employees that produced nearly 15 million tonnes per annum and approximately $1.3 billion in revenue in 2017–18.
An important part of the company’s growth and development came in 2010 when Centennial became a wholly owned subsidiary of Banpu, a major integrated energy solutions company in the Asia-Pacific that operates in 10 countries and employs over 6000 people.
The company is undertaking what it has referred to as a journey of digital transformation, which introduces concepts of agile thinking, rapid deployment of new ideas, real-time data analysis and advanced technology at its mines.
“It is empowering the workforce to help drive improved safety, environment and productivity performance,” explains Cairney.
A tool that has been developed to this end is Centennial’s Underground Mining Assistant (UMA). UMA is a mobile device to allow access to real-time operational data, and was developed using agile management techniques that included site visits, interviews, workshops, software development and site trials.
“Deployment of the UMA at mine sites has commenced and work is continuing to refine any remaining pain points,” Cairney says.
Increasing transparency into the contracting process is improving Centennial’s efficiency by flagging contract expirations and giving the company the ability to properly plan for upcoming projects.
In February 2019, Centennial’s Digital Capability centre was also officially opened, providing a central catalyst for business improvement at Centennial and creating business value using both conventional and digital levers.
Centennial’s supply chain has also been subject to review as part of its digital transformation program, resulting in a procurement project with a renewed focus on category management. This project has targeted two key areas in this respect, namely equipment overhauls and longwall move equipment, and labour hire.
Centennial has also streamlined its contracting process through technology, while driving efficiency and transparency across the group.
It is playing a role in accelerating buy-side contracting, improving compliance and optimising commercial mining contractors’ on-site performance.
This focus, Cairney says, will realise considerable savings through improved logistics and supply chain efficiencies.
“The integration of two new software components will further the digital transformation journey by better managing suppliers’ performance and introducing contract management to reduce labour intensive paper based processes currently used within procurement.
“It is the next step towards ensuring Centennial maintains the level of innovation that saw the company recognised at the Prospect Awards in 2017.”