WE WOULD love to build more mines in the Bowen Basin - just not anytime soon.
That is the bittersweet message from Rio Tinto Energy chief Harry Kenyon-Slaney, who yesterday stood shoulder to shoulder with Queensland Treasurer Tim Nicholls to formally open the $2 billion Kestrel South underground mine near Emerald.
The mine required 1500 construction workers, but the 400 operation roles will be filled by staff from Kestrel North in the lead-up to its exhaustion early next year.
Kestrel South will produce almost two million tonnes more coal than its predecessor, with Rio estimating its reserves at 115 million tonnes - enough to supply the site for two decades.
Mr Nicholls said the expansion showed those trying to write a eulogy for the mining industry were doing so prematurely.
The world's desire for steel-making or coking coal, he said, was "unabated" with forecasts suggesting coal volumes would increase by 8% next year. He conceded the market had come off the "sugar highs" that energised the industry before the 2011 slowdown.
Mr Kenyon-Slaney was not quite so upbeat, describing the current low end of the coal cycle as "one of the toughest".
"I think it comes on the back of unprecedented boom times and the reality is beginning to sink home that we have to get our costs down," he said.
In its latest operations review, Rio Tinto has reported a $4.2 billion drop in underlying earnings, including a $74 million loss for its coal arm. But Mr Kenyon-Slaney said there were more coal reserves near Kestrel and Rio Tinto would consider development if economical.
"When one mine comes to the end of its life, you have to prepare over a long period of time to replace those reserves and resources with a new mine," he said.
"That's what we've done here at Kestrel."