South Australia and coal

South Australia has limited but low-grade deposits of economic coal. The state has two ageing coal-fired power stations, both located near Port Augusta and owned by Alinta Energy. The Playford Power Station is currently mothballed while the Northern Power Station has been relegated to a summertime supply role. Both power stations are supplied with brown coal from the Leigh Creek mine, the only operating coal mine in the state. The Australian Bureau of Agricultural and Resource Economics estimated that in 2010 approximately 3.84 million tonnes of coal was produced in the state.

The Australian Energy Market Operator (AEMO) reported in late 2012 that it had dramatically revised downwards expected electricity demand over the next ten years to 0.9% per annum compared it its 2011 estimate of 1.5% per annum. AEMO pointed to reduced electricity demand from major industrial customers, slower projected growth rates, increased energy efficiency, increased wind generation and the highest level of solar power installations in the National Electricity Market causing a major revision in future electricity requirements. Despite little domestic demand growth, new wind power stations are under construction or being planned as a result of the incentives created under the Renewable Energy Target. Wind power accounted for 26% of electricity generated in the state in 2011/12, with coal at 24%.

The possibility of the development of an export coal industry is considered remote. However, a number of companies are investigating the potential for coal seam gas. The a feasibility study is being undertaken on the Kingston Lignite Project, a coal-to-liquids project. While the Kingston Lignite Project is listed by the Department of Primary Industries and Resources SA as a "developing project" in another section of its website the department does not list it as being amongst future minerals projects in the state. The only coal project it lists, other than the Leigh Creek mine, is the Lock coal project.

Leigh Creek resources
Primary Industries and Resources South Australia, the government agency that regulates the mining industry, states in relation to deposit that the Leigh Creek mine is exploiting:


 * "The low-grade sub-bituminous coal occurs in five discrete basins over a distance of 20 km. Lobe B (Telford Basin) is the largest and hosts the current mining operation. The coal seams are interbedded with mudstone, siltstone and sandstone, and range in thickness from a few metres up to 18 m for the main seam in Lobe B. Basin sediments dip radially towards the centre to form regular saucer-shaped depressions."


 * "Coal was discovered in the Copley Basin near Leigh Creek while excavating a railway dam in 1888. In 1943, open-cut mining began in the Telford Basin but was transferred in 1956 to smaller deposits at North Field, where coal was easier to extract. The best coal in these deposits was worked out by 1976, after which operations returned to the larger but deeper deposit in the Telford Basin. The present mine is owned and operated by NRG Flinders, which currently extracts ~2.7 Mt/year of coal by open-cut methods. The mining operation involves drilling, blasting and removal of overburden and coal by shovels and trucks. After mining, the crushed coal is railed to the Port Augusta power stations where it is used as fuel to produce ~40 % of Adelaide’s electricity."


 * "Due to the steeply dipping seams, it is likely that economic recovery of coal will be limited to between 70 and 100 Mt, or depths of 150–200 m. To extend the economic life of the mine, ‘terrace’ or haulback mining was implemented in 1990, which offers considerable savings over the previous strip mining operation. In the new method, overburden removed to expose the coal will be used as fill, and placed in areas where mining has been completed."

Coal-fired power stations in South Australia
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Proposed coal export terminals

 * Sheep Hill Deep Water Port at Port Lincoln has been proposed by Centrex Metals as a multi-cargo port. While primarily proposed to cater for possible iron ore exports from South Australia, in a 2009 presentation the company lists a possible user for a new port as being the export of coal from Energy Exploration Ltd's Lock coal project. Centrex states, based on a "personal comment" from Energy Exploration, that the coal project had a notional start date of 2010 and a possible export range of 3-5 million tonnes per annum.

Coal Seam Methane exploration
While there is limited demand from the power generation sector and no immediate prospect of coal exports, the South Australian government has been promoting the potential of the state's coal deposits for coal seam methane and/or gasification.

In a 2004 overview of the state's coal deposits, Department of Minerals and Energy South Australia stated that applications were under consideration for the:
 * Lake Phillipson coal deposit, which has an estimated 5,000 million tonnes of coal though it notes it has "high sodium and chlorine levels (about 2%);
 * the Lock deposit which has "a coal resource of 320 million tonnes";
 * the Tertiary lignite deposits in the Northern St Vincent Basin Coalfield - the 1250 million tonne Bowmans deposit, the 625 million tonne Lochiel deposit, and the minor Beaufort, Whitwarta and Clinton deposits; and
 * the 985 million tonnes of lignite in the Kingston deposit, the 184 million tonne Sedan deposit, the small Anna deposit and the "poor quality lignite" of the Moorlands deposit.

In a 2009 presentation to a conference, Primary Industries and Resources South Australia stated that there were nine Petroleum Exploration Licences and six Petroleum Exploration Licence Applications under consideration for coal seam methane or underground gasification. "The determination of some PELs has been delayed pending the resolution of conflicting entitlements between coal leases under the Mining Act 1971 and/or native title access agreements."

"On the ground CSM exploration has not yet commenced in South Australia, however drilling and sampling in the next few years are important elements of the work programs for current PELs and PELAs," the PIRSA staff stated.

Companies involved in coal-seam gas exploration projects, in 2009, include:


 * Ackaringa Energy Pty Ltd, a subsidiary of Altona Resources, which has three exploration licences including for a coal-to-liquids project. PIRSA stated that with one of the exploration licenses, EL3351, Altona Resources were undertaking a final feasibility study for a "coal to liquids and power project based on the Wintinna coal deposit aiming for a finacial close by the end of 2010 and commencement of operations by 2014. The base case comprises: 10 million tonne per annum coalmine; 30,000 barrels per day (10 million barrels per annum) coal-to-liquids plant producing mainly zero sulphur diesel fuel; 560MW for export";


 * Strike Oil Limited has applied for a licence over the Weena Trough in the Cooper Basin for coal seam methane and conventional petroleum. Primary Industries and Resources South Australia note that the block was first applied for in March 1999 and has been delayed "pending resolution of native title";


 * a number of companies hold exploration licences for petroleum and coal seam methane in the Perdika Basin though Primary Industries and Resources South Australia note that "most of the coal in eastern Perdika Basin appears to be too deep for CSM extraction using current technologies." However PIRSA noted that in two sub-basins the coal formations were closer to the surface. PIRSA notes that the entire Peridka Basin is covered by exploration licences from Merlin Energy, Stuart Petroleum and Ti-Star Energy Petroleum.


 * Planet Gas Limited holds an exploration license for coal seam methane over the Springfield and Boolcunda basins;


 * in the Gambier Basin Hybrid Energy Australia hold licences for "coal mining and coal to liquids". The notional project involved 10,000 barrels poer day of petroleum liquids and 40 megawatts of power export. PIRSA noted that the project involved "pre-feasibility study, coal sampling using large diameter coring, samples to be used for gasification experimentation program";


 * in the Murray Basin Energy Exploration Ltd "have applied" for a licence to explore the Anna and Sedan deposits "to explore for coal seam methane and in situ gasification. The project involves reviewing gravity and aeromagnetic data, drilling and permeability testing of the coal";


 * in the Northern St Vincent basin, SAPEX hold an exploration licence over the region for coal seam methane. In addition, Flinders Power operate exploration licence over the Lochiel and Bowman basins. Syngas Energy, which PIRSA states is a "wholly owned subsidiary of GulfX", operates two exploration licences for coal liquids projectrs at Whitwarta and Clinton deposits.

Related SourceWatch articles

 * Australia and coal
 * Australian Coal Association
 * New South Wales and coal
 * Queensland and coal
 * Victoria and coal
 * Western Australia and coal
 * Coal terminals

External resources

 * Department of Minerals and Energy South Australia, Coal Deposits in South Australia, Earth Resources Information Sheet, June 2004. (pdf)
 * Alan Sansome1, Lisa Nitschke and Peter R Tingate, "Coal seam methane potential of South Australia", MESA Journal 47, December 2007, pages 11-13.
 * E.M. Alexander et al, South Australian coal potential - CSM, ISG, CTL and CTG Part 1, Primary Industries and Resources South Australia, 2009. (Pdf)
 * E.M. Alexander et al, "South Australian coal potential - CSM, ISG, CTL and CTG Part 2", Primary Industries and Resources South Australia, 2009. (Pdf)