New Hope’s expansion plans

Posted June 15, 2015


Leon Richardson overlooks the New Acland operation. Photo: Nadine Shaw

New Hope is a miner on the march, snapping up a raft of Surat Basin thermal coal tenements recently to create a project package with a resource of more than one billion tonnes.

While the group still has an eye on further coal acquisition opportunities, its immediate priority is on gaining approval for the Stage 3 development of the New Acland mine, north-west of Oakey on the Darling Downs.

“The new government in Queensland is currently reviewing the ’approval processes’ of the next stage of the Acland development as per their election promise. We have not been given a timeframe,” New Hope Group chief operating officer Bruce Denney said.

That development would provide a $530 million injection into the south-east Queensland economy annually and a boost of $12 billion to the local, state and national economies over the life of the mine, Mr Denney said.

New Hope late last year acquired Cockatoo Coal’s stake in the Taroom, Collingwood and Woori thermal coal deposits for $25 million and in February also agreed to acquire Mitsui’s 49 per cent interest in the projects on similar terms.

Mr Denney described the acquisition as a long-term strategic investment in large-tonnage, low-ash open-cut thermal coal.

In combination with New Hope’s Elimatta project, the North Surat package contains total resources of more than one billion tonnes in the Wandoan area.

Mr Denney said their development timeframe was likely to be more than five years away.

“We have always adopted a long-term view on acquisitions and will continue to do so,” he said.

“It would be fair to say that, at the moment, our focus is on either adding additional near-term coal production capacity, or complementing our existing portfolio of longer-term development projects.”

New Hope had been very well managed said resource analyst Gavin Wendt, the founder of MineLife,.

“Whereas other companies have had their ups and downs in the sector, New Hope has performed very strongly…and they have also been very astute in terms of their growth ambition,” Mr Wendt said.

“Not only have they identified high-quality growth opportunities, but they haven’t overpaid for them - they’ve taken advantage of market weakness, poor market sentiment to make those acquisitions.”

Mr Denney pointed to a range of factors that had left New Hope well placed to make such strategic acquisitions while other companies were shedding assets, including significant cash reserves and lack of debt.

And he said the company’s diversification of earnings, low cost of production and strong financial position meant it was well placed continue to weather current market conditions

New Hope had implemented further efficiencies at its New Acland and West Moreton operations, he said.

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