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Pike River is our second largest export coal mine, producing over 17 million export tonnes of premium hard coking coal over the next 18 years. Getting the West Coast mine into production has been an exercise in dogged persistence. By Alistair McKenzie and Alan Titchall.
The coal’s low ash content (one percent compared to eight percent in premium Australian coking coals) and high-fluidity are particularly valued by international coke and steel producers, who use it as a fuel and a catalyst. Unusually, the mine goes uphill and features two seams: the Brunner coal measures with just over 58.5 million tonnes of recoverable coal, and the deeper Paparoa measures with an additional eight million tonnes. To access the Brunner seam, Pike River Coal had to build a 2.3 kilometre tunnel through metamorphic rock, making it the largest and longest tunnel built in New Zealand since the second tunnel at the Manapouri hydro plant was completed in 2001. As a mining company, Pike River could have developed its own mine entrance (adit), but instead opted to let a fast-track design-build civil contract for the job to McConnell Dowell. The first, full face blast in mid September 2006 revealed poorer-than expected rock conditions and it was apparent that instead of being largely ‘self-supported’, the tunnel would require a lot of reinforcing. The 5.5 metre-wide, 4.5metre-high tunnel was excavated at various inclined grades to pass under located surface features and chemically anchored rock bolts were used to hold reinforcing mesh to the excavated D-profile. A robotic shotcreting machine, brought in from Australia, was used to apply shotcrete that had been fibre-reinforced using polyolefin structural fibres, as used on the Northern Gateway Project in Auckland.
The tunnellers struck coal at a predicted location on October 17, 2008 when their tunnel came up under the Brunner seam, adjacent to an existing borehole. A roadway was driven northwards and the excavation completed at the base of what would become a ventilation shaft – and the beginning of more geological challenges. Trouble down shaftWork had begun on this 108 metre-deep, 4.15 metre-diameter ventilation shaft in 2008. As planned, the shaft was to be created using an Alimak system – involving excavating a shaft base-up by installing a track system up the wall of the shaft from which workers drill and blast the roof of the growing shaft. Again, ground conditions proved unsuitable and a raise-boring system was deployed at the cost of an additional $5 million. A pilot hole of about 300mm diameter was drilled from the surface to intersect the main tunnel and then enlarged by drawing a 4.15m diameter reaming head up the shaft, with all the drill cuttings falling back down the shaft for removal from the mine. Difficult rock conditions were expected and seven months were allowed for the job that was actually completed several weeks ahead of schedule, but before reinforcement of the shaft could be completed, the walls of the lower shaft collapsed. In March/April 2009 Pike River went to the market and raised $45 million to cover the estimated $7 million cost to fix the shaft and bridge the funding gap caused by delayed production.
An Alimak team from Australia, working around the clock, completed the main shaft bypass the following month and the shaft-top fan was able to start exhausting air up the shaft. Since flow-through ventilation was restored, operations have focused on developing the pit bottom, allowing only limited coal production from the internal roadways. Hydro-mining delayedWhen the mine is in full coal production hydro monitors (high pressure water cannons) will be used in conjunction with two Aussie ‘guzzlers’ that pick up the cut coal and crush it to less than 200mm and feed it into steel flumes. Water and gravity carry the crushed coal downhill to the pit bottom coal handling facilities where it is further crushed to 35mm and pumped via a water-fed slurry pipeline some 10 kilometres to the coal preparation plant at the bottom of the Pike River valley. Hydro-mining was planned for around March/April this year but more geological challenges have delayed full production until sometime in the the July/September quarter this year.
NZOG to the rescueAfter production delays, Pike River Coal posted a $14 million loss in the six months to December 31, 2009, up on the $9.55 million loss for the same period in the previous year. By January of this year it needed another $50 million of working capital to finish off the development of the mine, which it achieved through selling off shares and convertible bonds and a coal contract option (handing over part of its one asset, the premium coking coal it plans to sell into Asia), to its biggest shareholder, New Zealand Oil & Gas. NZOG, which has a 29.5 percent stake in Pike, was given a two-year option to buy currently uncontracted coking coal at market prices negotiated annually for three years, and up to 30 percent of the mine’s annual coal production for the life of the mine. NZOG chief executive David Salisbury says the company will receive an attractive return on its secured convertible bond and the potential for it to hold a coal contract, but in due course, Pike will become less relevant to NZOG’s future as the company builds its oil and gas exploration and production business. First shipment milestone
On February 19, 2010 Pike River’s first export shipment left for Port Bedi in India to one of the ‘life-of-mine’ customers in India - Gujarat NRE Coke. (Pike River CEO Gordon Ward and energy minister Gerry Brownlee are pictured at Port Lyttelton with the first shipment.) The majority of production has already been contracted on a long-term basis and Gujarat and Pike River’s other Indian customer, Saurashtra Fuels, have agreed to take a combined 55 percent of the company’s coal over the mine’s lifetime. The futurePike River has a full complement of 150 staff (mining, engineering, processing and support staff) required for the current stage of operations. The final phase will add around 10 more staff mostly to support hydro-mining operations.
Based on the latest plans, the mine is forecast to hit its targeted steady state rate of 1 million tonnes per annum in the first half of 2011. Recoverable coal over the total life of mine is valued at around $4 billion. In-seam drilling innovationBecause of faulting and geological movements in this young geological country, coal seams do not run in straight lines and Pike River’s decision to introduce in-seam drilling has proved to be a very sound one a valuable mine planning tool. A contractor from Australia used a track-mounted in-seam drill to create a series of holes, each several hundred metres long (a few up to 500 metres) through both graben and coal to sample the coal in the immediate vicinity of the shaft. The information was used to estimate the seam sizes and fine-tune the geological model of the western pit-bottom area and plot the best road map to cut coal. This drilling technique allows its engineers to accurately determine ground conditions for several hundreds of metres ahead of each coal working face.
Pike River is the only New Zealand coal company currently employing in-seam directional drilling to drill long distance holes – a fundamental mine planning tool that the company will use over the mine life. Eco friendlyExcept for the Coal Preparation Plant (CPP) site, a lot of the mine and its infrastructure sits on, or under, Department of Conservation-administered land outside Paparoa National Park on the West Coast Not surprisingly, setting up the mine involved years of opposition and delay that started in 1996 when Pike River Coal’s parent company, New Zealand Oil and Gas (NZOG), decided to mine the Brunner seam. It took eight years to obtain resource consent. Part of the ‘price’ exacted for approval was a significant contribution to the local environment and conservation programmes. Since then, Pike River Coal has established a pest control programme in the heavily pest infested Pike Stream catchment area. The company estimates its spends $200,000 per year on such ecology projects that also include a further $70,000 per year to DOC to administer a native Blue Duck enhancement programme.
Pike River spent more than $100,000 on reports to find the best manageable solutions, which include sealing extracted mining panels. Besides restricting the ingress of oxygen, reducing the risk of spontaneous combustion, sealing mined areas reduces the potential for acid rock drainage by restricting the seepage of groundwater into them.
Energy NZ Vol.4 No.3 May-June 2010 |
Located 45 kilometres northeast of Greymouth, near the top of the Paparoa Range, Pike River holds the country’s largest deposit of high-quality, hard coking coal.
To get to the coal, the tunnel had to pass through the Hawera fault – a major fracture zone in the region. This proved slow going, taking crews more than five weeks to drill and blast their way through the 60 metre zone of crushed rock and the possibility of methane gas infiltration meant explosion-proof equipment had to be used.
The rockfall was plugged by pouring concrete down from the top of the shaft and a 600mm ‘slimline’ vent drilled out to get air to the pit bottom. This $800,000 slimline vent was completed in mid May 2009, providing enough air for coal cutting to resume.
The problem is cutting through a 150 metre wide graben (a depressed block of land bordered by parallel faults) to advance multiple underground roadways from the pit bottom out to the coal reserves that will provide the access for hydro-mining equipment. Roadways in this area are built for the life of the mine and need to register at a constant grade to ensure that coal will wash downhill without pumping from the uphill mining operations.
While start of the first hydro-mining is dependent upon advance rates achieved through the graben and the completion of access roadways through to the coal, enough mined coal (limited coal production using a conveyor had began as early as October 2008), had been stockpiled at Pike’s new Ikamatua rail loadout facility to send 20,000 tonnes of premium hard coking coal to Lyttelton for the first sale.
When fully commissioned later this year, the hydro monitors will cut coal at an average rate of more than 2000 tonnes a day.
Once clear of the rock graben, this technique will be an advantage in planning the sequence of hydro-mining panels and mitigate the impact of more unexpected geological conditions.
Conservation efforts specific to the mining operation include control of acid rock drainage. Pyrite, found in rocks containing coal seams, can form sulfuric acid and iron hydroxide when exposed to air and water. When rainwater washes over these rocks, the runoff can become acidified, affecting local soils, rivers and streams.