MandalongM a i l b o x

Centennial Manadalong Community NewsletterNo.16, December 2011

COMMUNITY ENQUIRIES 1800 730 919

A Note from Mandalong’s Mine Manager Another busy year…

The 2011 year has seen Centennial Coal’s Mandalong Mine expand our community focus, the mine’s operations and infrastructure, and further develop our environmental initiatives.

We have had a highly progressive year with a significant emphasis on improving our work practices, devising innovative environmental initiatives, creating a safe and happy workplace for all our employees, and further increasing our community involvement.

In November, we had an additional 60 employees who commenced work at Mandalong and with Awaba Colliery’s closure at the end of this year, we will gain further valued personnel in the New Year who are experienced and will significantly add to our local operations.

At Mandalong we have been upgrading our facilities to ensure that we are operating efficiently, to create a safe workplace for our local people and further enhance our operations. We have constructed a new bathhouse, improved car parking facilities, developed road ways and built a haul road which links our Cooranbong facilities to Newstan, Centennial’s regional export facility.

In November, we successfully relocated our longwall equipment from longwalls 11 to 12, in just 21 days – a noteworthy achievement for our mine. Considering the longwall has roughly the same amount of steel as the Eiffel Tower, and needs to be dismantled, relocated and reassembled in an underground environment, this represents a massive feat.

The coal produced at Mandalong is for the domestic and export markets, and as at November 2011, we had extracted over 4.4 million tonnes of quality coal.

I encourage you to read on to find out more about the new innovative methane gas conversion system that we are about to trial; obtain an update on the exploration drilling programme in the area; and gain further information on our subsidence monitoring and management plans. You can also check out some pictures of a few community events that we were involved in this year, so please enjoy our Mandalong Mailbox!

Kind Regards,John Turner Mine Manager

During 2011, mining was successfully completed in both Longwalls 10 and 11, each taking approximately seven months to complete. Both longwall panels mined through a roadway which had been driven across the longwall panels to remove a geological feature known as a dyke. Dykes are volcanic rock that have been forced into a vertical or near vertical plane and typically extend from below the coal seam to the surface. They are extremely hard and can be up to ten times harder than the typical concrete driveway.

Mining of Longwall panel 12 commenced in November 2011, with access roads completed in September to enable a smooth transition between longwalls.

The access roads for longwall panels 13 and 14 are currently being developed. This will enable the smooth progressive transition of equipment between longwalls. Main roadways are also being developed to allow for the continuation of mining within the mine lease.

Subsidence monitoring over longwalls 10 and 11 have indicated that subsidence is well within the predicted levels. During the year, we successfully mined beneath seven dwellings with no damage occurring. Similarly, mining was effectively completed beneath both Sauls and Mandalong Roads, as well as the Telstra network.

As part of the SMP application process, potential changes in flood path and remnant ponding were identified in flood modelling undertaken. Potential flood mitigation works have been identified, including the ponding at the Deaves and Mandalong Road intersection. Remediation work to alleviate this ponding was undertaken in July and involved the construction of open surface drainage lines to join the existing drainage system. Potential flood mitigation works on public roads have also been identified and have been communicated to Lake Macquarie City Council through the Public Roads Management Plan.

The Subsidence Management Plan (SMP) application for Longwalls 15 to 17 commenced in early April this year. All landowners within the application area were sent a notification that included information on the SMP process, the expected impacts of longwall mining in the region, and legal advice on landowner’s rights and the company’s obligations. Centennial is also providing upfront funds to all affected landowners for initial legal advice on the development of the landowner’s Property Subsidence Management Plan (PSMP). This assistance also acknowledges the landowner’s time in reviewing the documents and meeting with company representatives.

Currently, Mandalong is in the process of consulting with landowners on the proposed mining and subsidence predictions for their property. A number of studies encompassing flora, fauna and land use, may be included in the development of each PSMP. Where studies are required, they are facilitated by a standard Centennial Coal Access Agreement which formalises the conditions of entry to private property, the scope of work to be conducted and indemnifies the landowner.

Other studies and assessments undertaken as part of the SMP application include the impact of subsidence on groundwater and flooding. If you have any questions regarding the SMP or mining process, please contact the Mine’s Subsidence Management Coordinator, Phil Enright, on 4973 0948.

Picture: Mandalong Mine’s Joy Longwall Face (right).

Subsidence Management Plan Update

Subsidence UpdateUpdateMining

Picture: Subsidence Management Plan application area for longwalls 15 to 17 and mine workings (left).

Methane gas conversion system trial to improve environmental performance

This year Mandalong has successfully conducted exploration drilling on a number of private and Centennial owned properties in the Browns Road area. The main purpose of this exploration is to increase the density of the existing borehole network and to enable more detailed mapping of the coal seam in this area.

“To allow for the further refinement of Mandalong’s subsidence model, we also collected data during this drilling process which will enable a better understanding of pillar compression,” said Paul Williams, Centennial Coal’s Regional Environment Manager.

“On longwall panel 15, we drilled a single angled hole to establish the hardness of the igneous dyke. This data will be used to analyse the impact of the dyke on the strength of the existing massive conglomerate beam, which is a hard slab of rock that is above the coal seam, and is the reason subsidence is minimal in the area.”

“We have also commenced planning for a further 19 drill sites which are currently being assessed in a Review of Environmental Factors,” he said.

The Review of Environmental Factors (REF) will be submitted to the Department of Resources, Industry, Trade and Investment, detailing the potential impacts which may result from exploration drilling activities, as well as mitigation measures used to avoid or reduce

disturbance from drilling. As per standard practice, operating hours for our drilling related activities occur from 7am to 6pm, Monday to Friday. Any work outside these times would only occur with a landholder’s consent and notification to neighbouring property owners.

“Consultation with landowners has commenced providing information on drilling and access agreements, and prior to exploration commencing, landholders will again be contacted to discuss an ‘Access Agreement,’ ” said Mr Williams.

An ‘Access Agreement’ contains all the details of the conditions of access and compensation for any disruption or restriction to the normal use of the property by the landowner while exploration is in progress.

Landholders on adjacent properties will also be contacted and if drilling activity is located within 200 metres of a house on an adjacent property, a separate access agreement with that property owner will also be negotiated. Any house within 450m of the proposed drill site will also be informed in writing that drilling activities are being conducted in the area.

If you have any questions on the drilling programme, contact the Mandalong community enquiries line on 1300 730 919.

Mandalong Mine Exploration

www.centennialcoal.com.au

Further Information

1800 730 919

Mandalong Community Information Line

Local Community Support

Mandalong Mine, in partnership with Coal Innovation NSW and Corky’s Sustainable Energy, will trial a new methane gas conversion system, VAM RAB (Ventilation Air Methane Regenerative After Burner) which we hope will assist to improve our environmental performance.

Centennial Coal’s Mandalong Mine Manager, John Turner, said the VAM RAB system effectively converts methane, which is released by underground coal mines, to carbon dioxide.

“The VAM RAB system is an oxidation vessel which acts like a large industrial oven. It directs the underground mine’s ventilated air through the oven-like system which heats the air up to 1,000 Degrees Celsius,” said Mr Turner.

“Once the ventilated air is heated, it converts the air’s methane component into carbon dioxide and water. This conversion will significantly reduce the level of greenhouse gas emissions entering the atmosphere.”

“There are currently no successful solutions to capture fugitive emissions from coal mines and this is a huge issue in the mining industry. It is hoped that the VAM RAB project could provide a positive technological solution,” he said.

Methane, formed underground during the natural process where biomass (such as plant material) is converted into coal, is a more potent greenhouse gas than carbon dioxide and

has a higher environmental impact. If this project proves successful, over the next decade the technology can be up scaled and commercialised. VAM RAB could be used to abate fugitive emissions from gassy and moderately gassy coal mines worldwide.

The VAM RAB system aims to reduce Mandalong’s greenhouse gas emissions by capturing the methane which would normally be released through its underground ventilation system.

Single VAM RAB unit layout (above)Example VAM RAB unit at Bloomfield Colliery (left)

Mandalong continues to actively engage with and invest in the community in which it operates. The mine has supported numerous community organisations and events including the; Morisset Street Beat Festival, Hunter Life Education, Lake Macquarie School Environment Awards, Try-a-Trade, Morisset Community Festival, Morisset Fire Brigade, Westpac Rescue Helicopter Service, Meals on Wheels, Morisset Pro Am, Toronto Paddlefest, Morisset/Lake Macquarie Agricultural Show Association Showgirl competition, Dora Creek Bowling Club’s Primary School’s program, Southlake Christmas Spectacular, numerous school presentation days, Mandalong nesting boxes, and an area water monitoring program.