Bowen Coking Coal (ASX: BCB) reports its Hillalong North project in Queensland’s Northern Bowen Basin has a maiden coal resource of 43 million tonnes with much of that located at shallow depths.
The company adds that raw quality data is “extremely positive” in terms of coking (or metallurgical) coal properties.
Hillalong North is part of the overall Hillalong project, one of four controlled by Bowen Coking Coal in the Bowen Basin, and lies in close proximity to the Hall Creek mine owned by Glencore, Marubeni and Sumitomo.
Hillalong is subject to a farm-in agreement with the conglomerate Sumitomo Corporation, the latter earning an initial 10% for financing $2.5 million worth of exploration. The Japanese company has the right to spend an additional $5 million to lift its stake to 20%.
Coal seams located at shallow depths
Following the drilling program that was completed last month, Bowen had previously confirmed that target seams were intersected at 26 of the 27 drill sites and the main target seams (Elphinstone and/or Hynds Upper) were intersected in about 75% of the holes from depths as shallow as 5m and 12m.
Of the 43Mt maiden resource in the northern part of the Hillalong project, 19.5Mt lies at depths shallower than 150m — a typical depth cut-off for resources that can mined by open pits.
Also of that total, 21Mt is classified as indicated and 22Mt as inferred.
Drilling and modelling this year confirmed the resource area is still open to the northeast and southwest. Those areas will be targeted in future exploration programs to increase the resource at Hillalong North.
Bowen managing director Gerhard Redelinghuys said the company is “extremely excited” both in terms of the resource estimate and the coal quality observed.
“Initial indications from the raw coal analysis and available fast floats demonstrated the potential for a very high-quality coking coal from the shallow Elphinstone and Hynds coal seams,” he added.
Coking coal’s future tied to steel demand
While global steel consumption was softened initially by the impact of the coronavirus pandemic, with some knock-on effects for coking coal, Bowen has previously made the point that world steel consumption is forecast to grow by about 17% through to 2025, partly driven by increasing urbanisation in Asia and Africa.
One tonne of steel made in a blast furnace uses approximately 780kg of coking coal. Therefore, steel market dynamics have a large impact on coking coal demand.
China is the largest producer and consumer of coking coal.