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There Is No Question In My Mind That The State Government Needs To Call A Very Public Inquiry Into Events At North Goonyella. Everyone In Australian Coal – But Most Importantly, All Of The Hardy Folk That Actually Mine The Stuff – Need To Have A Clear Understanding Of What Caused This Problem, To Have Confidence That The Risks Were Managed Effectively And To Have The Opportunity To Learn From Whatever Mistakes May Have Been Made.” Matthew Stevens AFR Newspaper 2nd Oct 2018

There is no question in my mind that the state government needs to call a very public inquiry into events at North Goonyella. Everyone in Australian coal – but most importantly, all of the hardy folk that actually mine the stuff – need to have a clear understanding of what caused this problem, to have confidence that the risks were managed effectively and to have the opportunity to learn from whatever mistakes may have been made.” Matthew Stevens AFR Newspaper 2nd Oct 2018

This is the follow up article by Matt Stevens on North Goonyella after his initial reporting on the 19th September. (Link Below)

Peabody admits smoke really did mean fire

Peabody Energy’s Australian born boss, Glenn Kellow, needs to get on a plane and head home to eyeball the now obviously simmering calamity that is the North Goonyella coal mine.

On Monday, Peabody’s St Louis-based management finally confirmed that its most profitable mine is on fire, that the inferno is “ongoing”, that its impacts are still uncertain and that the miner and its regulator had agreed on a “multi-tiered plan” to contain the tempest and then work out what caused it.

This confirmation arrived three days after photographs of smoke billowing from North Goonyella began circulating the tight community that is big coal. These pictures evinced a response from Peabody folk that would be hilarious in a Yes Minister kind of way but for the deadly seriousness of the situation. The company said on Friday that smoke had been observed and that it “indicated a likely fire in a portion of the mine”.

Needless to say, when you have an underground coal mine in a state of spontaneous combustion, then you have a real problem.

Production setback

Investors rightly assessed that smoke really did mean fire and Peabody’s New York Stock Exchange listed shares fell 13.5 per cent after a Friday statement that warned owners they shouldn’t expect any further production this calendar year from North Goonyella.

Using history as a guide, what looks a pretty gloomy outlook is in fact far more optimistic than it should be. The situation at North Goonyella is very serious indeed and precedent suggests that it could take up to 18 months to recover production from the mine.

Peabody’s immediate challenges stretch way beyond merely putting the fire out. The miner and the Queensland Mines Inspectorate will need to work out why and where the fire started, assess why it was preceded by gas levels high enough to suspend mining, and then agree on a mitigation strategy that might allow the mine to reopen.

Peabody is also going to need to find a new long wall to cut its coal because the existing bit of kit it leased from Yancoal is unlikely to be recoverable. Given that is so, it is also going to have to cut a deal with Yancoal to cover the cost of a machine that was due to be replaced next year.

Peabody had planned to have a spanking new long wall in place and producing coal at North Goonyella by the end of 2019. As things appear now to stand, it is hard to see why anyone should anticipate a return to production at North Goonyella before then.

Between now and then the miner and its regulator might also need to work out whether any or all of the mine’s operational management and Peabody’s local and US-executive were left wanting in their anticipation of, or their response to, a series of unfortunate events that experienced mine workers say risked a mine explosion.

Early warnings

Back on Tuesday September 18 The Australian Financial Review contacted Peabody seeking confirmation that mining at North Goonyella had been suspended because of high methane and carbon monoxide levels. We also sought comment on claims that miners had experienced problems with excessive heat as they worked to reposition their long wall mining equipment and that management had been slow and indecisive in its response to the problems.

We were told there had been issues but it was nothing like as serious as proposed and that a very active and capable management team was well into the process of successful mitigation of the heating and gas problems.

The strategy, signed off by the Mines Inspectorate, involved, among other things, the introduction of seven pumping units that were injecting nitrogen into the coal mine in an attempt to force gas from the mine and rob it of the oxygen that might promote a fire.

Peabody’s immediate response was to wonder about the motivation of the people that had delivered their concerns to the AFR.

We then informed Peabody that our information had come from working miners concerned about their immediate safety and their future jobs. We noted that in our long experience, the people that stride along the coal face rarely mislead or overstate issues of safety particularly.

Again, we were assured that matters were in hand, that the necessary internal and external expertise had been introduced to deal with issues that were nothing like as severe as our sources had indicated.

Over the two weeks since pretty much everything we had been warned would happen has happened. The nitrogen didn’t work because no one knew where to put it with the accuracy that would have made it effective, the mine is on fire, the leased long wall equipment is likely lost, the mine remains a dangerous place to be even though it is now inside an exclusion zone whose 3 kilometre extension has enveloped production infrastructure like the wash plant.

As a result Peabody and the regulator have been forced to agree on a new “multi-tiered plan” that includes the introduction of a “mobile GAG unit”. It is effectively a jet engine whose exhaust fumes are pumped down into the mine with the ambition of extinguishing the fire. The GAG injects inert gases at a rate 10 times greater than the nitrogen units.

At the same time the long wall panel that is on fire has been sealed by remotely operated bulldozers and other mine openings are being filled with temporary seals while an expandable, fire resistant material called Rocsil is pumped into the place.

Inquiry needed

While I am loath to force another public inquiry onto our royal commission crowded nation, there is no question in my mind that the state government needs to call a very public inquiry into events at North Goonyella.

In the weeks between first contact over North Goonyella’s gas and heating issues, we have heard criticism of Peabody’s operational management, of its external advisors and of the mining inspectorate, which has been described as “under-resourced”, “excessively bureaucratic” and “unable to attract proper numbers of quality inspectors”.

Queensland is a heartland of Australian coal mining and the official forecaster reckons coal will replace iron ore as our biggest export earner next year. Everyone in Australian coal – but most importantly, all of the hardy folk that actually mine the stuff – need to have a clear understanding of what caused this problem, to have confidence that the risks were managed effectively and to have the opportunity to learn from whatever mistakes may have been made.

To be clear, the only good news here is that established protocols were followed so that fatalities were avoided. This is an opportunity to publicly refresh the standards.

Peabody for one says it is going to seize that opportunity. It will review every aspect of what happened and it intends to share the lessons with its coal mining peers.

This Post Has One Comment
  1. Hi Stuart,
    Your recent articles show the industry in a state of operation never seen before as an industry.
    I started in the industry in the early 1980’s and have seen the industry progress and move forward.
    However there needs to be periodic reviews and resets to keep the industry moving in a positive direction. It is time to undertake that reset, it is not time to review, The grosvenor process is proof of that, There must be a Yes Minister episode for that.
    Is the industry in a better position than when it was 10 years ago, I would say evidence of black lung, explosions, fires maybe it is not.
    I first commented on your site regarding a heating event at North Goonyella in the late 1990’s. Part of the problem that was found in that incident was the delay in getting gas bags analysed because the poor V.O was a jack of all trades, taking bag samples, running the GC, interpreting the results. Management was not aware of the situation until the heating occurred. no one is perfect are they. It is why we need a reset, update legislation, modify the inspectorate, change their role and responsibilities, change the training regime for statutory roles.
    With my time in the industry, I have experienced heating events, and I learnt most of what I now know through practice rather than what was taught by people who had no practical experience. This knowledge only came about by a diligent approach that was not part of a 9 to 5 job, maybe I’m a slow learner. Thick seams are unique, leaving coal in the roof is even more unique, and it is time to manage spon comb similar to how gas was managed in the old legislation, some mines are more prone than others and should be managed accordingly. Managing the industry is a complex situation, how do you do it to ensure safety of coal mine workers whether they a working in a single pit open cut operation 50m deep or a place change underground mine or a 10 Million tonne operation.
    The risk approach management of the industry does not fit every situation, just like the risk approach of management for Covid does not always work.

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