Mining has started at the Bluff open-cut coal mine, in Queensland, Australia. Bowen Coking Coal reported that first coal sales from the mine were on track for this quarter, with the mine to reach steady-state production of 80,000 metric tons (mt) to 100,000 mt per month by July.

“This is a very proud moment for Bowen,” MD and CEO Gerhard Redelinghuys said. “The commencement of coal mining at Bluff is a monumental move for the company as we take the major step from explorer to becoming Australia’s next multi-mine coal producer. It is also the culmination of many months of hard work from all involved and I want to thank all our stakeholders for their support, especially the Bowen board, management and staff who made this possible.”

Redelinghuys added that Bluff is just the start to the company’s production aspirations with Broadmeadow East, Burton and Isaac River all poised for a start this year as Bowen ramps up toward its 5-million-metric-ton-per-year production target over the next two years.

Bowen said the recent increase in crude oil prices, coupled with increased labor cost, are expected to result in a 10% to 15% increase in the production costs as foreseen in the concept study, while still being within the 30% accuracy levels stated.

However, the increase in the planned production cost is not considered to materially impact the short- to medium-term margins in this higher sales price environment. The company said it was continuing to optimize the mine plan, including the investigation of additional extraction of low-cost coal via auger mining.