QUEENSLAND COAL-UCG PORTFOLIO
In mid-2008, GCR began evaluating developments in the supply of both coal and gas to global energy markets and concluded that the market would require additional sources of supply for both commodities. Beginning in November 2008, GCR has been applying for permits in the Surat and Clarence – Moreton Basins in south east Queensland. The focus of exploration will be evaluating the potential of deeper “stranded coal seams” for UCG extraction where the opportunity for shallow, open cut resources is limited.
A total of nine permit applications have been made to date, four of which are granted one in the Boonah area south of Ipswich (EPC1643) and three in the area between Chinchilla and Dalby (EPCs 1655, 1658, 1659) north west of Toowoomba. These coal permits are located in the vicinity of the Underground Coal Gasification-Gas to Liquids (UCG-GTL) of Linc Energy’s (ASX:LNC) and Carbon Energy’s (ASX:CNX) UCG projects, and the Kogan Creek and Wilkie Creek open cut mines.
One other permit application has been lodged in the Boonah area (EPC 2082). The remaining four applications are classified as competing applications where the area GCR have applied for overlaps another company’s application. One is located in the Pentland area south-west of Townsville (EPC1642), the second in the Nebo area west of Makay (EPC1639) and the final two in the Warwick area near our existing applications and tenements (EPC1656 and 2068). Currently the Queensland Government’s Department of Employment, Economic Development and Innovation (DEEDI) has a backlog of assessing this type of application and a decision on their status is not expected for some months.
A full list of GCR’s current coal permits and their status are shown in Table 1 below.
Table 1: GCR Coal Tenement Project List
PROJECT EVALUATIONS
Over the course of the next three months GCR plans to undertake a 2,000 metre drilling program refining drill targets, and subject to drill rig availability, evaluate the coal and UCG potential of its granted coal permits and applications under offer when granted. GCR is currently evaluating other coal areas in Queensland’s major coal producing basins for tenement applications, joint venture opportunities, or outright acquisition.
Golden Cross is investigating opportunities to place its coal assets in a dedicated coal company.
QUEENSLAND GOVERNMENT POLICY STANCE ON UCG
Investors should note that the Queensland Government is currently evaluating operations at the three UCG pilot plants run by Linc Energy, Carbon Energy and Cougar Energy (at Kingaroy), and has announced that:
“During the pilot phase of the above three projects there will be no further UCG pilot projects allowed on public interest grounds. However, the Minister for Mines and Energy will have the discretion to approve additional UCG pilot projects which have a strong ability to further demonstrate the efficacy of UCG technology1”.
The Queensland Cabinet will review the success of the three UCG pilot plant reports in 2011/12 to determine the success of this method of extraction in conjunction with the EPA’s finding on environmental management of UCG.
Reference
1. Underground Coal Gasification Policy (Dept of Employment, Economic Development and Innovation, QLD Government), announced on the 18th February 2009. (http://www.dme.qld.gov.au/mines/underground_coal_gasification_policy.cfm).
July 2010