Queensland’s Bowen Basin is renowned for its rich mineral reserves. Michael Callan, COO of Vitrinite PTY LTD, discusses operating in the region’s coal mining space, and the company’s preparation for the future.
INTRODUCTION
“We have seen some dramatic changes in recent years. Even since 2021, the price for our premium hard coke and coal per tonne has risen from US$110 to around US$645 recently, and when you compare the past to everything going on around the world at the moment – post-COVID-19, China’s ban on Australian imports and now Russia’s actions in Europe – it’s hard to read certainties in the foreseeable future.”
Michael Callan, COO of Vitrinite Pty Ltd (Vitrinite), has been with the company for three years, and has been able to witness this unique period of time in the Australian coal mining sector.
Vitrinite is a privately owned company holding an extensive strategic coking coal tenement portfolio within Queensland’s (Australia) world-class Bowen Basin. The company’s assets are situated in close proximity to operating mines, infrastructure and proven economic resources. Vitrinite is currently focused on executing an exploration drilling and definition programme of JORC (Joint Ore Reserves Committee) resources across multiple sites, representing the next generation of premium tier one assets in Australia.
As a business Vitrinite is young and progressive, insisting on excellence in every aspect of its work and taking immense pride in the coal industry and the Australian resources sector.
“We have worked hard as a small team to navigate the mining approval process. We hit production at an opportune time, taking some commercial risks to proceed to production quickly,” Callan says. “We are stewards of the lands and minerals we are developing, aiming to achieve out-sized returns for our shareholders and stakeholders. We embody and encourage an open and collaborative attitude, inward and outward, in our company values.
“Vitrinite’s vision is to create value and wealth through the provision of resources to power world economic growth, exceeding and setting global best practices in every endeavour.”
“We embody and encourage an open and collaborative attitude, inward and outward, in our company values”
Michael Callan, COO, Vitrinite Pty LtdBRIGHTER COAL
Vitrinite has recently celebrated its eighth birthday at one of its primary sites, the Vulcan Mine Complex (Vulcan), based in the Bowen Basin. Acquired by the company in 2018, this site contains multiple target coal seams with many premium hard coking coal properties and stands as Vitrinite’s most notable asset.
“Over the last three years we have really put a lot of attention into Vulcan,” Callan inform us. “Taking it from an exploration tenement through to currently having our first mining lease and associated approvals in place, and mining almost two million tonnes per annum (Mtpa) from the mine in that time, is a good achievement.
“We will be increasing this from just under two to five Mtpa over the next few years, but as for the rest of 2022, we will focus on our two pipeline projects that sit at the forefront of our company growth. These are our Karin Basin and Wilson Creek projects, and the aim is to get these into production similarly to Vulcan. We have a good blueprint for converting these tenements into producing mines, and we are going to roll this out across the two upcoming projects.”
Vitrinite has the advantage of remaining a small and dynamic team amid an industry that includes international players who, due to their size, remain more rigid when it comes to the structure of their mining approach, and whose operations involves multiple layers of complexity.
IN THE FACE OF TRANSITION
In light of this, Vitrinite’s size plays a key part in its ability to swiftly and easily navigate aspects of mining operations, including decision-making processes.
“Coal will always be used in some capacity,” Callan tells us. “With the growth of the renewable energy transition, many larger Australian coal mining companies are switching their focus on adapting to such a change, which places Vitrinite in a unique position for the future.
“While Vitrinite is a smaller-scale coal mining company, we are much more agile than those larger competitors, and during this transition we may be able to answer the necessary coal demand in the wake of these larger companies looking towards alternative energy.”
For Callan, Vitrinite will always operate in the Australian coal mining industry, and part of this dedication to the sector is the constant search for opportunities through which to expand. This includes purchasing infrastructure and additional mines, as well as heavily investing in its current sites.
“We have a real love for the coal industry and are proud to operate in it,” he continues.
“Everyone is aware of the energy transition, but we see ourselves as the private and nimble operator that can continue to operate coal mines, undertake progressive rehabilitation and extract value and rehabilitate existing mines that larger companies may want to exit.
“As part of our growth we are investing a substantial amount into our Vulcan project.
Where we are currently washing – that is the use of water to remove substances from mined ore – through existing plants in the area, we have plans to gain approval to build our own wash plant on site. This will increase our production from two Mtpa from open-cut mining to adding an additional three Mtpa from high wall mining. This expansion project is valued at AUD$160 million, so that is a particularly large focus for us right now, but it is one of many projects that we want to turn our attention to. Vulcan was our way into being a coal operator and we put a lot of blood, sweat and tears into getting this up and running. Now we have a really good team on site, and we have great opportunities to move forward.”
MAXIMISING VALUE
Part of this investment into Vulcan was Vitrinite’s purchase of its first GHWM300M highwall mining unit from Gainwell Engineering Global Pte Ltd (Gainwell), an Indian manufacturer of such equipment. Nick Williams, Founder and Managing Director of Vitrinite, signed the first contract to supply a highwall miner to support the Vulcan site.
“Vitrinite is honoured to be the first buyer of Gainwell’s GHWM300M outside India and believes that the introduction of highwall mining technology will play a significant role in the future of the Australian mining industry, as it has in many other coal markets around the world,” Callan elaborates. “These units are manufactured under license from Caterpillar, with technology developed and refined in the US mining industry over many decades.
“Highwall miners have proven to be safe, highly productive, have a low environmental impact, and provide access to coal that would otherwise be stranded due to economic constraints. This purchase is the result of a two-year research programme undertaken by Vitrinite to determine the best method to maximise the value of its extensive resources at Vulcan. It is the culmination of extensive reviews of operating highwall miners around the world. The Gainwell’s product is outstanding and has been determined to be the best suited for the mining conditions at Vulcan.”
Vitrinite anticipates the first coal to be mined with the highwall unit in 2023. If this first unit proves as successful as anticipated, Vitrinite will likely deploy multiple units in quick succession to increase production, and help towards creating a very bright future in underpinning the next generation of highly productive coal mines in Australia.
PREPARING FOR THE FUTURE
At the core of Vitrinite’s growth is a team of dedicated personnel, each of whom recognises the company’s mission as an Australian-born coal provider.
In 2021, Vitrinite’s team stood at around 20 employees, a number that has almost tripled since.
“We have around 60 members of staff right now, across the broader group, and they are key to the future of Vitrinite,” Callan tells us. “In preparation for the years ahead we are in the process of submitting our second mining license (ML) at Vulcan, for approved open-cut mining, extending our operations from five to 12 years at a rate of two Mtpa. In terms of Vulcan, there are really clear expansion plans, including the on-site ore wash capabilities, so that we continue to be operationally successful in Australia.”
Vitrinite will also be aiming to ramp up its operations at its Karin Basin site, with an aim to increase its capacity as it is currently doing with the Vulcan project.
“Exploring our Karin Basin site is also a large area of investment for us,” Callan continues. “We want to be producing in excess of 10 Mtpa across the whole company. This will start with organising the necessary mining approval processes and then moving forward with our various investments on our sites such as Vulcan and Karin Basin to really scale up our operations for the future.”
