TAROOM COAL PTY LTD ACN ELIMATTA MINE PROJECT MINING LEASE APPLICATIONS MLA OVER EPC 650 MLA OVER EPC 1171 AND MLA 50271

Transcription

1 TAROOM COAL PTY LTD ABN: TAROOM COAL PTY LTD ACN ELIMATTA MINE PROJECT MINING LEASE APPLICATIONS MLA OVER EPC 650 MLA OVER EPC 1171 AND MLA AMENDED INITIAL DEVELOPMENT PLAN or IDP 1 PART 15.3 OF THE APPLICATION SECTIONS 318DT, 318DU, 318DV AND 318DW OF THE MINERAL RESOURCES ACT 1989 (QLD) JULY This document contains only the Initial Development Plan required under s 318DT of the Mineral Resources Act 1989 (Qld) and also addresses certain requirements of sections 318DU, 318DV and 318DW of the Mineral Resources Act 1989 (Qld). It does not provide for the CSG Statement or CSG Assessment Criteria, which are subject to a different set of rules and are located in part 15.3B of this application.

2 CHECKLIST OF LEGISLATIVE REQUIREMENTS Document Section (MR Act) Requirement Section ref Initial Development Plan 318DT(1)(a) an overview of the activities proposed to be carried out under the proposed mining lease during all of its proposed term DT(1)(b) for each year of the plan period: 1.2 the nature and extent of activities to be carried out under the proposed mining lease during the year; and where the activities are proposed to be carried out 318DT(1)(c) for each mineral the applicant proposed to mine under the proposed mining lease, each of the following: the location and estimate of the resources of the mineral in the area, or proposed area, of the mining lease 2 the standards and procedures used to make the estimate 3 the rate and amount of the proposed mining 4 approximately when the proposed mining is to start DT(1)(d) 318DT(1)(e) a schedule for the proposed mining during the plan period maps that show the matters mentioned in paragraphs (b) and (c)(i), (iii) and (iv) any other information relevant to the criteria mentioned in s 318EF for matters relevant to the CSG statement and CSG assessment criteria see part 15.3B of the Mining Lease Applications 318DT(1)(f) reasons why the plan is considered appropriate 6 318DT(1)(g) another matter prescribed under a regulation none identified 218DU state the period of the proposed plan DV 318DW statement of how the effects on, and the interests of, any relevant overlapping or adjacent petroleum tenure holder have, or have not, been considered having regard to: the main purposes of this part; and the CSG assessment criteria, other than the initial development plan requirements requirement that the activities provided for under the proposed plan must seek to optimise the use of incidental 7 8 Page 2 of 27

3 Document Section (MR Act) Requirement coal seam gas in a safe and efficient way, if it is commercially and technically feasible to do so Section ref Nb: In this part of this mining lease application, MR Act means Mineral Resources Act 1989 (Qld). Page 3 of 27

4 1. Overview of the Activities Proposed to be Carried Out 1.1 Overview This section addresses sections 318DT(1)(a) and (b) of the MR Act. Taroom Coal Pty Ltd ACN (Taroom Coal) has made three contiguous mining lease applications (MLAs) for the Elimatta Mine Project (Project) that this Amended Initial Development Plan (Amended IDP) describes. The MLAs were each made in This Amended IDP is being lodged in July This Amended IDP replaces the individual Initial Development Plans (IDPs) included in the 2009 MLAs. The term of this Amended IDP is proposed as three years from the date of grant of the Project MLAs on the assumption that the Project MLAs will be granted from a common date. Notionally, the term is from 1 January 2017 to 31 December 2019 to allow for site preparation, construction of infrastructure and commencement of production operations at the Project. MLA Elimatta Mining, is made over all of the area of EPC 650 and is intended for mining activities and related infrastructure. MLA Elimatta Infrastructure, was made in 2009 over the greater part of Exploration Permit for Coal (EPC) 1171 and Prospecting Permit (PP) However, EPC 1603 was subsequently granted over the area of PP to another party. Taroom Coal and the other party were unable to reach a commercial arrangement to maintain the area of PP within the MLA boundary. Consequently this part of the application area was abandoned in This MLA is intended for infrastructure associated with mining on MLA 50254, but not for mining purposes. MLA and MLA are each an application for a mining lease under section 234(1) of the MR Act. MLA Elimatta Transport is an application for a transport and services corridor to connect MLA and MLA areas. MLA is an application under section 316 of the MR Act. The MLAs cover a combined area of ~3,975 hectares (ha). In March 2015 Taroom Coal entered into a Co-Development Agreement (CDA) with BG International (AUS) Pty Ltd ABN , CNOOC Coal Seam Gas Company Pty Ltd ABN and Tokyo Gas QCLNG Pty Ltd ABN collectively the Gas Party, for purposes of the CDA. The CDA records the commercial (and confidential) arrangements between Taroom Coal and the Gas Party for the development of the resources in the Overlap Area effectively the area of the Taroom Coal MLAs. This Amended IDP aligns its activities with those of the CDA and the Co-Development Plan made as part of the CDA. The Project is located in the Western Downs Regional Council area in southern Queensland, approximately 45 km south-west of Taroom and 380 km north-west of Brisbane. Access to the Project site is from the Leichhardt Highway, the Yuleba Taroom Road and the local Perretts Road. The general location of the project is as shown in Figure 1. Page 4 of 27

5 Figure 1: Elimatta Project Location Page 5 of 27

6 The Elimatta Project is based on the development of a 259 million-tonne (Mt) thermal coal resource (JORC 2004 compliant) of the Juandah formation in the Surat Basin. The Project is planned to mine up to 8.2 Mtpa of ROM coal (average 7.5 Mtpa) to produce an average 5.0 Mtpa of product coal for export. The target commencement date for production is 2019 with this timing dependent on date of grant of the leases, the state of the international market for thermal coals, the availability of services and infrastructure required for power and water supply and product coal transportation and shipping. The mining leases term applied for is forty (40) years, to allow for construction time prior to commencing production activities, the period of production activities extending to more than 30 years and final rehabilitation of the site at the end of mining operations to the condition required in the Environmental Authority for the Project. The Project construction period on site prior to start of full scale coal production is anticipated to be months with first mine excavation activities site preparation and drainage management commencing after 13 months. The Project s operational phase will involve open-cut mining using truck and excavator methods within MLA Overburden and interburden will be disposed of both in-pit and in out-of-pit spoils dumps located on site and contiguous with the pit excavation. ROM coal will be hauled from the pit area to the Coal Handling and Processing Plant (CHPP) located on MLA for processing via a dedicated private haul road within MLA Processing will involve crushing, screening and washing to separate coal from waste materials. Fine waste rejects will be partially dewatered, with water recycled to the processing plant, and pumped to dedicated tailings storage facilities. Coarse rejects will be dewatered and disposed of within spoil dumps. Product coal is intended to be transported by rail to Gladstone Port for export through the Wiggins Island Coal Export Terminal (or the R G Tanna Coal Terminal). During construction the number of on-site personnel is estimated to peak at more than 500 (erection of CHPP structure) and during operations at about 300 people, rising over time to more than 350. Mine operations are planned to be all day, all year. The Elimatta Transport MLA overlaps MDL 449, MDL 411 and MLA lodged by Glencore Coal Queensland Pty Ltd. Because MLA is an application for a mining lease for transportation and services (and not for mining), Taroom Coal was not required to hold an underlying mining tenure upon which to base the application. Taroom Coal has an agreement with Glencore Coal Queensland Pty Ltd (formerly Xstrata Coal Queensland Pty Ltd) whereby the Wandoan Project proponents consent to, and undertake not to object to, the grant of Taroom Coal s MLA for transportation and services. In return, Taroom Coal will consent to, and undertake not to object to, the grant of a coal mining lease (ML) over MLA Regional petroleum tenements that underlie or are adjacent to the Elimatta Project are shown in Table 1 (as at 19 May 2015). Page 6 of 27

7 Table 1: Underlying & Adjacent Petroleum Tenements MLA Areas Tenement Holder Status Status Date Expiry ATP 852 PLA 299 BG International (AUS) Pty Ltd (73.5%), CNOOC Coal Seam Gas Company Pty Ltd (25%) Tokyo Gas QCLNG Pty Ltd (1.25%) BG International (AUS) Pty Ltd (73.5%), CNOOC Coal Seam Gas Company Pty Ltd (25%) Tokyo Gas QCLNG Pty Ltd (1.25%) Granted 20 th April th April 2019 Application 22 nd May BG International (AUS) Pty Ltd (73.5%), CNOOC Coal Seam Gas Company Pty Ltd (25%) Tokyo Gas QCLNG Pty Ltd (1.25%) PL 498 Granted 19 th December th December 2043 BG International (AUS) Pty Ltd (73.5%), CNOOC Coal Seam Gas Company Pty Ltd (25%) Tokyo Gas QCLNG Pty Ltd (1.25%) PL 464 Granted 15 th October th October 2043 PLA 397 BG International (AUS) Pty Ltd (73.5%), CNOOC Coal Seam Gas Company Pty Ltd (25%) Tokyo Gas QCLNG Pty Ltd (1.25%) Application 26 th July The Elimatta Mining MLA overlaps Petroleum Lease Application (PLA) 299 made by the Gas Party. PLA 299 was made over part of Authority to Prospect (ATP) 852. Where a MLA is made over a granted ATP, then the coal seam gas provisions of the MR Act apply. The MLA must include additional components, such as a CSG statement, that give consideration to the development of petroleum (including coal seam gas) from the same area. The ML applicant must use reasonable attempts to consult with the ATP holder and enter into a coordination arrangement that facilitates the coordinated future development of both coal and petroleum resources. The Elimatta Infrastructure MLA overlaps PLA 397 made by the Gas Party. PLA 397 was made over ATP 852. Despite the fact that no actual coal mining will be undertaken on this ML, the coal seam gas provisions of the MR Act still apply. The provisions apply to a coal mining lease which includes a Page 7 of 27

8 specific purpose mining lease for a purpose associated with, arising from or promoting the activity of coal mining, whether or not it is also granted for a purpose other than coal mining. The Elimatta Transport MLA also overlaps PLA 299 and ATP 852. The coal seam gas provisions discussed above will not apply to MLA as the MLA is for a transportation ML under s 316 of the MR Act. As noted above, Taroom Coal and the Gas Party have a Co-Development Agreement and as at the date of this Amended IDP, are working together to make a Coordination Arrangement for the overlap area the co-development area for the Minister s consideration. There are no Greenhouse Gas tenures or geothermal tenures within the immediate Project area. Figure 2: Elimatta Project Mining and Petroleum Tenures Project Proponent Taroom Coal is the proponent for the Elimatta Project and applicant for the project MLs and Environmental Authority. At the time of the MLAs were lodged in 2009, Taroom Coal was a wholly owned subsidiary of Northern Energy Corporation Limited (NEC). In 2011 NEC was taken over by New Hope Corporation Limited (New Hope) such that, now, Taroom Coal is a wholly owned subsidiary of New Hope. New Hope is an Australian publicly listed company with a long history dating to the early 1950s of coal mine development and operation in Queensland and overseas. At the time of making this Amended IDP New Hope s office is located at: 3/22 Magnolia Drive Via Tournament Drive Brookwater Qld 4300 Page 8 of 27

9 1.2 Description of proposed activities This section also addresses section 318DT(1)(b) of the MR Act. The construction of the mining operation and the CHPP, stockpiling and transportation facilities, maintenance workshops and servicing plant and administration buildings within the Project MLA areas are all part of the proposal to develop the Project. The main elements of the proposed development to be constructed and operated are: Open pit coal mining excavations; Haul road from mine area and ROM coal receiving area and stockpile; ROM dump hopper and primary sizing station; Secondary sizing station and linking conveyors; Coal processing plant comprising a single module of 350tph capacity; Product coal conveyors and stockpile; Train loading area (or alternatively, truck loading if road haulage is part of the transport solution); Rail balloon loop; Plant reject material storage areas; Heavy equipment workshop and vehicle servicing areas; Warehouse; Administration building and change rooms; Fuel, lubricants and tyre stores; Light and heavy vehicle parking hard stands; Access roads; Raw water storage and water management dams and pipelines; and Electrical power substation and distribution network. The following table outlines the nature and extent of the activities proposed to be carried out, including the proposed location of activities during the term of this IDP. Table 2: Nature and Extent of Activities Amended IDP Year Nature and Extent of Activities Location of Activities Year 1 Site preparation and construction See Figure 3 for General Project layout Year 2 Year 3 Construction and start excavation activities Production activities (finalise construction) See Figure 4 for Infrastructure Area Layout See Figure 5 for proposed mine excavation activities at the end of mine year 01 The general layout of the main infrastructure is shown in Figures 3 and 4 and the mine operation as it is planned to be at the end of Year 3 of this IDP (Mine Project Year 01) is show in Figure 5. Mining activities are currently planned within the Elimatta Mining MLA area with the coal processing and related tasks, including train loading, located within the Elimatta Infrastructure MLA area. Page 9 of 27

10 Figure 3: Project Major Infrastructure General Layout Page 10 of 27

11 Figure 4: Mine Infrastructure Area General Layout Page 11 of 27

12 Figure 5: Mining Operations - End of Mine Project Year 01 (Amended IDP Year 3) Page 12 of 27

13 2. Location and Estimate of the Resources in the MLA Area This section addresses section 318DT(1)(c)(i) of the MR Act. 2.1 Location and Estimate MLA The coal resource within the MLA area has been classified into measured, indicated and inferred categories in accordance with the 2004 JORC Code. The estimated total resource at 259 Mt of in-situ coal, is shown in Table 3. Table 3: Coal Resources within MLA Horizon Total Resource Area (ha) In-Situ Density (g/cc) Thickness Range (m) Measured Tonnage (x 106) Indicated Tonnage (x 106) Inferred Tonnage (x 106) UG 1, Y 2, A 2, B 2, BC C Sub Total Mt Mt 50 Mt Grand Total (rounded) 259 Mt An extensive exploration drilling program in the period 2007 to 2012 has been conducted by Taroom Coal in order to define the resource and provide for mine planning. The drill hole location plan for MLA is as shown in Figure 6. The deposit is situated over a broad north-south trending anticline which plunges to the south. The coal seams dip to the south over most of the deposit, generally at less than one and a half degrees as shown in Figure 7.Forty individual coal seams have been correlated and modelled. The individual seams have been assigned to eight separate groups, based largely on historic seam nomenclature. In decreasing stratigraphical order, the seam groups are T, UG, Y, A, B, BC, C and LG. The seams are often interbanded with siltstone and mudstones but there are also thick sections of clean, low ash coal with very few stone bands. Typical stratigraphic column is as shown in Figure 8. The seams split and coalesce, but are thicker and more consistent towards the centre of the deposit (underlying the Horse Creek flow area), while thinning and splitting towards the margins. East-west and north-south sections show the A and B seams coalesced in the central part of the deposit and splitting to the east, west and south. The A seams sub-crop in the north and reach depths of greater than 70 m in the south. The lowest strip ratios are in a large zone in the central area of MLA where the merged A and B seams are thick and shallow. Although the A and B seam groups contain the main seams of economic interest, further down dip (to the south), the Y and then the UG seam groups occur above the A seams, and these seams also make a significant contribution to the low strip ratio coal inventory. In the northern part of MLA 50254, mining efforts will target the coal resources through to the C seam group. Page 13 of 27

14 Figure 6: Drill Hole Location Plan and Current Resource Limits Page 14 of 27

15 Figure 7: Elimatta Mining - Cross Sections at Locations shown in Figure 6 Page 15 of 27

16 Figure 8: Typical Elimatta Project Stratigraphy Page 16 of 27

17 MLA Taroom Coal has undertaken exploration activities within EPC This work comprised firstly undertaking a review of regional geological information available on public record from exploration carried out by previous tenure holders. This reporting described the area as having low potential for usable resources within the Juandah Coal Measures. As Taroom Coal was proposing to utilise the area of EPC 1171 for Elimatta project infrastructure and not for coal mining purposes, it carried out additional exploration in order to confirm the previous asessments and to be satisified that the infrastructure was not likely to steralise a coal resource opportunity. Taroom Coal has added eight exploration drill holes to the knowledge base see Figure 9 for locations. The coal seams identified are generally less than 1m thick as indicated by geophysical logging and have been correlated with those of the lower Juandah Coal Measures within EPC 650/MLA The seams in EPC 1171 are generally dominated by dull coal with occasional bright bands. Lithic seam partings are prevalent and comprised of siltstone, mudstone and reworked tuffaceous sediments. Theoretical strip ratios, assuming open pit mining of overburden and interburden are typically greater than 20. No seam intersected at the depths covered in the exploration less than 100 metres were considered suitable for underground extraction being too shallow and too thin. A typical graphic log is shown in Figure 10. Therefore, no coal resource has been delineated within ML MLA MLA is an application for transport and services, not for mining purposes. Any coal resource within the area of MLA is for the benefit of the Glencore Project proponents. Page 17 of 27

18 Figure 9: EPC 1171 Drill Hole Location Plan Page 18 of 27

19 Figure 10: EPC 1171 Typical Drill Hole Graphic Log 3. Standards and Procedures Used to Make the Estimate This section addresses section 318DT(1)(c)(ii) of the MR Act. The estimates of coal resources have been prepared in accordance with the guidelines of the Australian Code for Reporting of Exploration Results, Mineral resources and Ore Resources the 2004 JORC Code. A stratigraphic column of the modelled seams is given at Figure 8. The seam structure has been defined in terms of seam groups, parent seams and seam splits, as recorded in the drill hole logs. Modelling has been performed on a compound unit basis that is, seam groups, parent seams and their splits have all been modelled. Key parameters used for creating the geological model are given below: Schema name: ELI_1109 Topography surface: Topo_all_10m Interpolator: finite element method (fem) Extrapolation distance: 2000m Grid cell size: 50m The grid limits are (GDA94): Easting to Northing to Page 19 of 27

20 The geological database used to construct the geological model was contained within Mincom s GDB system. The geological model was built using Mincom s Minescape software. The integration between the two modules is considered an appropriate system for coal exploration data storage and coal deposit modelling. A rigorous review of the geological database was carried out in This review was part of a study on the feasibility of the Elimatta Project. The review included interrogation of interval depths, sample depths and sample validity. Coal seam correlation and structural review were also carried out. Following the 2010 review, the database was loaded into the Vulcan system for geological modelling. Prior to construction of the geological model, the Minescape database was validated against the exported Vulcan database to ensure they were aligned. The validation included coal seam assignment and correlation as well as sample boundaries. The comparison was generally acceptable, although some minor changes were made to interval and sample depths to better align the sampled intervals with the coal seam roof and floors. The geological database contained 361 drill holes. All drill hole collar locations have been recorded in GDA94. Most drill holes have been logged using geophysical techniques. This includes density, natural gamma, calliper and sonic velocity. The proximate analysis table contains 1,391 records for raw coal analysis. Of these records, 1,372 were deemed valid. The samples excluded were done so on the basis of invalid sampling techniques. A count of coal quality records for each parameter is as shown in Table 4. Table 4: Coal Quality Records Count by Parameter PARAMETER RAW Ash % (ad) 1372 Moisture % (ad) 1173 Volatile Matter % (ad) 1087 Fixed Carbon % (ad) 1092 Specific Energy (Mj/kg) 1096 Relative Density (g/cc) 1348 Structural Modelling Of the 361 drill holes contained in the geological database, 277 were used for constructing the structural model. The drill holes excluded were either not within the project area, contained unreliable data or were abandoned and redrilled with a new hole number. Drill hole statistics are illustrated in Table 5. Page 20 of 27

21 Table 5: Drill Hole Statistics INTERVAL NUMBER OF INTERSECTIONS AVERAGE THICKNESS MINIMUM THICKNESS (m) MAXIMUM THICKNESS (m) UG UG UG UG Y Y Y Y Y A A A A A B B B B BC BC BC C C C C C C C C LG LG LG LG LG LG Coal Quality Modelling A total of 112 drill holes contained valid coal quality data obtained from core samples. These holes were used to construct the coal quality model. Where values did not exist for some of the raw coal quality parameters, they were substituted using a number of methods. A new column was developed for each of the parameters that were substituted. The methods are given in Table 6. Page 21 of 27

22 Table 6: Substitution Methods and Equations PARAMETER METHOD REVISED COLUMN NAME Default moisture value of 8% (ad) where moisture was missing Moisture % and ash was <75% (ad) Default moisture value of 4% (ad) where moisture was missing PRIMDEF and ash was >75% RD g/cc (ad) Regression using inverse ash % (ad) RD (ad) = 1/( *Ash % (ad) ) PRRDDEF Volatile Matter % (ad) Specific Energy Mj/kg (ad) Fixed Carbon % (ad) Regression using raw ash % (db) *Ash% (db) Then adjusted back to air-dried basis Regression using raw ash % (db) *Ash% (db) Then adjusted back to air-dried basis Regression using raw ash % (db) * Ash% (db) Then adjusted back to air-dried basis PRVMDEF PRSEDEF PRFCDEF Mincom s GDB compositing tools were used to combine the sampled increments and apply the analysed coal quality parameters to the designated plies. Due to the nature of the coal measures concerned, coal sequences intersected in drill holes have not always been sampled at the ply boundaries. In most cases, sample increment boundaries were determined by lithological changes e.g. stone bands. Such lithological changes often mark the ply boundaries and in most cases plies have been sampled with respect to these boundaries. There are many instances where plies have been sampled in multiple increments; the compositing tool has weighted the parameters for the incremental samples against their thickness to produce a single value per parameter per ply. Where sampled sections extended outside the interval range, they were excluded from the coal quality model unless the lithology of the sampled interval was at minimum 50% coal. This allowed capture of points of observation where bulk sampling of a parent interval had occurred. This sampling methodology was considered appropriate in some of the earlier exploration programs that occurred prior to the development of the ply model. Plies were also rejected from the quality composite table if the total thickness of the samples applied was less than 95% of the ply thickness. The following coal quality parameters were composited and subsequently modelled: Ash % (ad) Moisture % (ad) Volatile Matter %(ad) Fixed Carbon % (ad) Relative Density g/cc (ad) Specific Energy Mj/kg (ad) Total Sulphur % (ad) Ash % (db) Volatile Matter % (db) Fixed Carbon % (db) Specific Energy Mj/Kg (db) Volatile Matter % (daf) Coal quality statistics, at air-dried basis, from the composited coal quality table are given at Table 7. Page 22 of 27

23 Table 7: Coal Quality Data SEAM No. of Samples Ash % (ad) Moisture % (ad) Volatile Matter % (ad) Fixed Carbon % (ad) RD g/cc (ad) Specific Energy mj/kg (ad) Total Sulphur % (ad) UG UG UG UG Y Y Y Y Y A A A A A B B B B BC BC BC C C C C C Rate and Amount of the Proposed Mining This section addresses section 318DT(1)(c)(iii) of the MR Act. A detailed mine production schedule was revised and updated in The mine design, waste volume, coal tonnage and coal quality are based on the geological model used to estimate the resource. The mine schedule was based on a 24 hour day / 7 days per week operation with a targeted production capacity of 5.0 Mt of product coal per annum for a period of up to 32 years. Table 8 gives key production statistics for the period of this Amended IDP (full production statistics are found in the Elimatta Project - Environmental Impact Statement 2014, published in May 2014). Page 23 of 27

24 Table 8: Key Production Statistics Amended IDP Year 1 Year 2 Year 3 Schedule Quantities Units Waste Mining M bcm Waste Mining Ex5500A M bcm Waste Mining Ex5500B M bcm Waste Mining Ex2500A M bcm Waste Mining Loader 994A M bcm ROM Coal Quantities Total ROM Tonnes (ROM moisture) Mt (ROM) Infrastructures and construction Infrastructure and construction continues - start mine activities Rom Ash (rom moisture) % Rom Ash (AD) %(ad) Closing ROM inventory Washed Product Mt (ROM) Washplant Yield (wet/wet) %(w/w) Washed Product tonnes Mt (prod) Other items Topsoil Area '000 m Reject Tonnage Mt (prod) Mining Schedule This section addresses section 318DT(1)(c)(vi)-(v) of the MR Act. 5.1 When the Proposed Mining is to Start Site clearing, establishment of drainage and then overburden removal is scheduled to commence from month 13 of the project construction schedule notionally in February 2018 on the basis of the MLs having been granted by January 2017 with general site preparation and construction activities commencing shortly thereafter. 5.2 Schedule for Proposed Mining during the Plan Period Refer to Table 8 above. Page 24 of 27

25 6. Reasons why the Plan is Considered Appropriate This section addresses section 318DT(1)(f) of the MR Act. The Project scope and objectives are to: Extract an open cut coal Resource of ~250 Mt at shallower than 100m below surface. At a production rate of up to 8.2 Mtpa ROM coal average 7.5 Mtpa for + 30 years (current assessment actual production duration will be dependent on coal prices for the product prevailing at the time of production). Establish and operate a conventional open cut mining operation using trucks and excavators. Construct and operate mine related infrastructure including workshop, offices and CHPP. Have product transported to Gladstone for export. The Project is considered by Taroom Coal to be viable given the following: Total Resource measured, Indicated and Inferred of 259 Mt (reported to JORC standard). Mining resource is suitable for low cost open pit extraction. Thermal Coal product is suitable for use in the power generating industry. As there is no infrastructure suitable for mine processing activities, heavy equipment maintenance, coal stockpiling, waste storage and rail transportation located within the area of or near to the MLA areas, Taroom Coal will be responsible for the construction of the full suite of infrastructure at the Project site, including the CHPP, stockpiling, administration and maintenance facilities and train loading at an estimated capital cost of some $400 - $500 million. Coal is one of Queensland s highest value exports and the coal industry provides significant value to the State by way of direct and indirect employment, purchase of goods and services and payment of taxes and royalties. The Project provides an opportunity to add to the contribution the industry makes to the State with its development in a region not currently directly benefiting from the continued growth of the coal and other resource sectors. The Project will also provide a benefit to the country on a national scale. This is achieved through increased foreign revenue from the export of coal and general economic stimulus through increased employment and the purchase of goods and services. Taroom Coal has identified a resource of +250 Mt within the Project area, of which up to 170 Mt can be economically extracted using today s evaluation standards by efficient open cut mining methods to generate 5.0 Mtpa product coal suitable for the international market for thermal coals. The project is anticipated to have a production life in excess of 30 years. The value of infrastructure construction is estimated to be $400 - $500 million (2013 dollars). Although many of the mining inputs will be imported into the regional economy, the workforce is expected to be recruited locally where available and/or provided as FIFO or DIDO/BIBO. As the project is now following on from the CSG industry construction boom, rather than competing with CSG for resources and labour a local workforce is expected to be available. It is expected that about $250 million of construction expenditures will be sourced from domestic suppliers and $ million will be spent on imports. The wage costs during construction are estimated to be $40-45 million, most of which will be Queensland based. Annual employee payroll in the operating phase is expected to be more than $36 million per year. Page 25 of 27

26 A range of operational expenditures will be sourced from Queensland based firms including rail services, port services, power and water supplies and plant maintenance. Full year expenditures on rail and port services are expected to exceed $125 million per annum. The Project will pay significant on-going revenue to the State Government through royalty and payroll tax obligations. Without the mine these payments will not be received. The annual royalty payment to the State resulting from sales of the product from mining operations, based on 5.0 Mtpa sales and a price of A$100 is in the order of $35 million. The Project will directly generate approximately up to 500 full time equivalent jobs during construction and 300 for early production to generate spending potential in the regional area where the workforce is located of approximately $18 million each year. The Project will have a positive impact on the economy of the region and the State through ongoing expenditures for materials and services, payment of rates, purchase of infrastructure, plant and consumables, use of service industries and payment of taxes. 7. How the effect on, and the interests of, any relevant overlapping or adjacent petroleum tenure holders have, or have not, been considered, having regard to the main purposes of this part and the CSG assessment criteria This section addresses section 318DV of the MR Act. Overlapping Petroleum Tenements: Taroom Coal and the Gas Party entered into a Co-Development Agreement in March 2015 which provides for the arrangements for each party to utilise the resource the subject of its production tenures (when granted) and which provides for a mechanism to make a Coordination Arrangement for consideration for acceptance by the Minister. Taroom Coal confirms that it has, in preparing this Amended IDP, had regard to the main purposes of part 7AA of the MR Act including the CSG assessment criteria. Taroom Coal has in preparing the Elimatta Project MLAs considered: the principal objectives of the MR Act in s 2; and the main purposes of Part 7AA of the MR Act in s 318A. For the reasons set out in the MLAs, including in this Amended IDP, the Elimatta Project MLAs are consistent with and promote the objectives of the MR Act and the main purposes of Part 7AA of the MR Act, particularly in respect of: the minimisation of land use conflicts (s 2(c)) as described in this application; ensuring an appropriate financial return to the State from mining (s 2(e), see part 15.1 Supporting Information to the MLAs and the CSG statement for the Project); addressing issues arising for coal seam gas mining under the MR Act (s 318A(b), see the CSG statement and material relating to the CSG assessment criteria in this application and comments above in this section); providing certainty of tenure for future investments relating to coal, oil shale and petroleum (s 318A(d), see the CSG statement and material relating to the CSG assessment criteria in this application and comments above in this section); optimising the development and use of the State s coal, oil shale and petroleum resources to maximise the benefit for all Queenslanders (s 318A(e), see the CSG statement and material relating to the CSG assessment criteria in the application and comments above in this section). Page 26 of 27

27 8. How the activities will seek to optimise the use of incidental coal seam gas in a safe and efficient way This section addresses section 318DW of the MR Act. Taroom Coal has conducted a test program to determine the likelihood of the availability of incidental coal seam gas occurring at the shallow depths that will be part of the open pit mine operation. Twenty core samples from four sites across the mine area (MLA 50254) were tested. Initial desorption measurements in the field were carried out using gas canisters and desorption apparatus. On completion of the field test component the samples were sent to a commercial laboratory where the fast method of gas content testing was used. Due to the low gas content encountered, generally <0.3m3/t, the test program was modified to increase the precision of the measurements and to provide a more accurate assessment of the gas content and composition. Infrastructure construction on MLA and are anticipated to require excavations no deeper than 15 metres at most and to not intersect coal seams. No gas release is anticipated as a result of the mining (construction) activities on these tenures. Therefore, Taroom Coal anticipates that its open pit mining activities will not access commercial quantities of incidental coal seam gas. Page 27 of 27