1. HAIL CREEK AJM OPEN CUT COAL CONFERENCE PAPER, MAY 2003
12:51 PM 2/07/2016 HCK AJM PAPER MAY 03 (DOUBLE SPACE).DOC
Mining perspectives on the
development and future operation of
Pacific Coal’s $465M Hail Creek Coal
Mine

2. Introduction
Pacific Coal Pty Limited, as Manager of the Hail Creek Mine on behalf of the Hail
Creek Joint Venture is developing a 5.5 Mtpa open cut mine producing prime quality
hard and semi-hard coking coal for the export market. Surface mining reserves
provide a mine life of around forty years at a production level of 5.5 Mtpa. The capital
cost of the project is A$465 million.
The Hail Creek Joint Venture is an unincorporated joint venture between the
following companies:
Queensland Coal Pty Limited 92.00%
Marubeni Coal Pty Limited 5.33%
Sumisho Coal Development Pty Limited 2.67%
Pacific Coal Pty Limited manages the project on behalf of the participants.
Project approval was granted in 2001, and first coal shipments are planned for
Quarter 3 2003.
This paper focuses on the mining perspectives of the project, covering geology, mine
planning and start up of mine operations.
Location
The Hail Creek Mine is located 50 km north-west of the township of Nebo and 130
km, by road, west of Mackay in Central Queensland (Figure 1). It lies within

3. undulating lowlands of the upper catchment of Bee Creek, which forms part of the
Fitzroy River System. The average annual rainfall is 760 mm, half of which generally
falls between January and March. The mine will have rail access via a 175 km rail
line to existing port infrastructure at Dalrymple Bay Coal Terminal.
FIGURE 1: Location Map
Geology
Hail Creek is a high quality, large scale coal resource with recoverable reserves by
open cut methods of around 300 Mt. These reserves are supported by a substantial
exploration database, comprising more than 170,000 m of drilling in over 2,900
boreholes. In addition, bulk samples were recovered from six holes of 1 m diameter
for quality testing and distribution to potential customers.
The open cut reserves are contained in two seams, Elphinstone and Hynds, each
6 m to 9 m thick. Average overburden to coal ratio for the surface mine reserves is 7
: 1 for the mine life, with average overburden ratio in the first 10 years of less than 4 :
1.
The Elphinstone and Hynds Seams are contained in the Rangal Coal Measures
which overly the Fort Cooper and Moranbah Coal Measures.
The dominant structural feature in the coalfield is the Hail Creek Syncline. The
syncline closes to the north-north-west and plunges at about 1.5 degrees to the

4. south-south-east. Seismic data show that the syncline is generally symmetrical and
drilling has confirmed the continuity of the coal seams across the axis. Depth along
the central synclinal axis of is 300 to 400m. See Figures 2 and 3.
Throughout most of the western open cut reserve area, dips range from 4 to 8. In
the northern closure of the syncline and along the eastern limb, dips range from 9 to
20.
Faulting is of relatively minor significance across the syncline. Five, widely spaced,
low magnitude, normal faults and one persistent thrust fault have been identified
from closely-spaced drilling. Fault displacements are generally small (5 m to 20 m).
The predominant rock type is hard, light grey, medium grained, quartz-lithic
sandstone, which will be amenable to highwall pre-splitting and throw blasting
techniques. The rock mass is massive with few bedding features and relatively little
carbonaceous matter. Highwall stability conditions are expected to be excellent, due
to the rock mass characteristics of the overburden/interburden material, with the
exception of some localised steep dipping joint zones. Siltstones and finer materials
are softer and more carbonaceous but are generally not common.
Elphinstone Seam floor conditions are generally good, with competent underlying
strata across the mining area. Hynds Seam floor conditions are generally good
where the Fort Cooper Seam has split away. The Fort Cooper Seam coalesces with
the Hynds Seam in the western area. Follow up detailed geotechnical investigations
have confirmed the floor in these areas to be moderately strong.

5. Both seams have been fully or partially intruded in some areas. See Figure 2.
Product Coals
Hail Creek coal is a high rank, low volatile coal with moderate ash levels (19 - 26%
raw) which requires washing to create products suitable for use as metallurgical coal.
A low ash Hail Creek Brand (8.5%) and a medium ash Brumby Brand (11.0%)
product will be produced. The Hail Creek brand product is a low volatile, hard coking
coal of comparable quality to recognised Australian prime coking coals. Hail Creek
brand has the advantage of very low sulphur (0.35%), high coke strength after
reaction (CSR of 68), desirable crucible swell number (CSN 7 to 7.5), high fixed
carbon (70.1%) and optimal rank (1.33 Rv max) compared to peer Australian coking
coals. When coked, Hail Creek is a high yield coking coal that exerts low pressure
on coke oven walls.
The Brumby Brand possesses similar coking performance to the prime product, but at 11.0%
ash will be a second tier coking coal
FIGURE 2: Hail Creek Syncline showing seam subcrops
FIGURE 3: Sections through Hail Creek Syncline

6. Quality of Product Brands
Quality
Indicator
Coal Property Units
& Basis
Brumby Brand Hail Creek Brand
Rank Rv max % 1.29 1.33
Volatile Matter %, adb 20.2 20.4
Coal Type Vitrinite % 43.0 53.0
Semi inertinite % 31.4 27.0
Grade Ash %, adb 11.0 8.5
Sulphur %, adb 0.30 0.35
Phosphorus %, adb 0.070 0.062
Caking Indices CSN - 5 7
Maximum Fluidity ddpm 160 230
Ash Chemistry Alkalis (Na2O + K2O) % 1.61 1.16
Basicity Index - 0.14 0.10
Coke Strength JIS DI 30/15 - 94.5 95.5
JIS DI 150/15 - 83.0 85.0
CRI - 30.0 22.5
CSR - 56.5 68.0
Wall Pressure Maximum kPa <2.5 <2.5
Mine Planning
The surface mine areas are bounded by fully intruded seams, lease boundaries, and
economic cut off margin at depth.
The western mine layout has two main dragline pits, orientated north-south,
advancing from west to east. A smaller third dragline pit to the south of the main
western mining area is limited by seam intrusions. As the dragline reaches its limits
in the western area, pre-stripping commences with large rope shovels and 218t class
trucks. Steeply dipping areas (>12) which are not amenable to dragline mining (due
to spoil instability), will be mined using truck and shovel methods. For single seam

7. mining, a single pass dragline an in-pit bench will used. The two seam dragline areas
will utilise full offset or stacked dragline methods, depending on interburden
thickness. Cast blasting and dozer assist will be employed with the dragline
operations.
Figure 4 shows a typical section for the western mining area.
FIGURE 4: Typical mining section in western mining area
An economic margin ranking of potential surface mineable reserves was recently
completed across the complete syncline. This margin ranking formed the basis for
updating the economic reserves obtainable by surface mining methods. Proved and
probable marketable reserves are estimated at around 195 Mt, with a mine life of
around 40 years. Total waste to be moved over the mine life is 2,000 Mbcm.
Mining schedules have been optimised to meet the split of coal products required
and maximize economic margin. The mining will focus on the Hynds Seam initially
which will be used to produce both products. As mine development progresses, the
Elphinstone Seam makes up an increasing proportion of the Brumby product feed.
By 2008, the Elphinstone Seam makes up 50% of the ROM feed. Figure 5 shows the
mine layout for the western mining area.
Figure 5: Mine Layout

8. Mine Startup Strategy
The original project feasibility study completed in 1997, on which project approval
was largely based, assumed startup of mine operations using a five year mining
contract. Once project approval was granted followed by start up of the project team
in 2001, a review of this development strategy was undertaken early in 2002. The
following options were considered in this review.
 Truck/Shovel Mining Contract for Years 1 to 5
 Equipment Hire with Full Maintenance by OEM
 Equipment Hire with Part Maintenance by OEM and field maintenance by
HCK
 Own/Operate by HCK
All the above options assumed the dragline and coal processing plant would be
owner/operated from startup, in line with the feasibility study. Submissions from
mining contractors and equipment suppliers were obtained, followed by discussions
with each. The final recommendation of owner/operate for project startup was based
on the following benefits.
 Opportunity to lay the foundation of a single project culture from project start
up in line with that developed at other Pacific Coal operations.
 Capital cost advantages from existing group procurement arrangements within
Rio Tinto.
 Lower operating cost.
Mine Fleet Procurement

9. Approval for additional capital to purchase the start up truck/shovel fleet was granted
mid 2002, followed by negotiations with the major equipment suppliers. The following
fleet of major equipment has been selected for the initial truck/shovel fleet along with
minor support equipment.
2 Terex RH170 20 cu m excavators
8 Terex MT440 236 t haul trucks
3 Caterpillar D11 dozers
1 Caterpillar 16H grader
1 Caterpillar 844 rubber tyred dozer
1 Caterpillar 777 Water Truck
1 Reed SKS overburden drill
1 Reed SKF coal drill
A contract for the supply of a P&H 9020 dragline with a planned bucket capacity of
90 cu m has been let and is currently under construction.
Recruitment Program
A rigorous recruitment program has been underway since late 2002, involving a
comprehensive selection process which included assessment of attitudes to safety,
team work as well as mining skills. There has been some transfer of operators from
other Rio Tinto operations, as well as recruitment form outside the company.

10. Recruitment objectives included the need to promote the employment of women and
indigenous personnel.
Commencement of Mining Operations
Initial pit development commenced April 2003 utilising a truck/shovel fleet made up
of a Terex RH170 excavator and Terex MT4400 trucks. The second excavator is due
to start in May with additional trucks. The P&H 9020 dragline will commence
operation September 2004.
Coal mining will commence in July 2003 using the RH170 excavators.
Figure 6 shows overburden loaded by Hail Creek mining equipment on the first day
of mine operations, 3 April 2003.
FIGURE 6: Overburden waste loaded by Hail Creek Equipment.