Moss was on holidays when MiningNews.net contacted the company, but according to Centennial’s managing director, Bob Cameron, the company is delighted to welcome the experienced businessman to the board.
Moss’s credentials are certainly impressive. A graduate from the University of Newcastle, Moss’s first job was in the coal industry as a colliery cadet with BHP in Newcastle.
Moss made his name with Howard Smith, where he held senior positions both in Australia and overseas before becoming managing director in 1993. Most recently, he was appointed chairman of Boral and has become a director of National Australia Bank.
He joins Centennial at an important time in its development.
In the past six years it has grown from a small private company producing 150,000 tonnes per annum to a 3mtpa publicly listed outfit which owns six mines in New South Wales (Berrima, Charbon, Clarence, Ivanhoe, Airly and the Charbon open cut) plus a 45% interest in the Cook colliery in Central Queensland.
It hasn’t all been smooth sailing for Centennial. In May the company cut production at the Charbon colliery at Kandos in NSW by 40% and sacked 37 workers following an unsuccessful bid by the operation to win a tender put out by Delta Electricity.
Consequently, the company is looking to see much of its immediate growth come from the $114 million purchase of the Springvale underground mine, near Lithgow, also in NSW.
In July, Centennial purchased the remaining 50% of the mine from Glencore. This followed a deal in June where it bought its original stake from Samsung Development Australia as part of a consortium consisting of SK Corporation of Korea and Korean Resources Corporation.
The two-phase purchase of Springvale will ultimately leave Centennial with 77% of the operation and require it to fund $88 million worth of the purchase price.
“The acquisition of Springvale is a company-maker for Centennial,” Cameron said.
“It will nearly double Centennial’s current production to over 5Mtpa and increase expected cashflow to over $22 million in 2001.”
Springvale has extensive recoverable reserves in excess of 83Mt and produced about 2Mt in the year to December 31, 1999.
It is the principal supplier to Delta Electricity’s Mt Piper power station, which is linked by a dedicated conveyor. Springvale has a 14-year contract to deliver a minimum of 1.6Mtpa.
The high-capacity longwall mine has not been without its headaches. Hydrological and geological hurdles have been major stumbling blocks since the mine came online in 1994.
However, it would appear the issue of dewatering has been conquered. Adaptation of oil industry pumping technology for mine dewatering duties is said to have enabled the mine to increase its dewatering rates at reduced cost.
