'It Doesn't Matter Who Owns Us' - southburnett.com.au

20130512 Behind The Fence — Stanwell CEO Richard Van Breda, Executive General Manager (Business Services) Jenny Gregg, and Power Station Site Manager Dennis Franklin

May 14, 2013

Local businesspeople, council representatives and other community leaders were invited “behind the fence” at the Meandu coal mine this morning to hear an update on operations by Stanwell Corporation representatives.

Stanwell CEO Richard Van Breda immediately tackled the controversial “Commission of Audit” (COA) recommendation presented to the State Government last month that Stanwell, which is a government-owned corporation, should be privatised.

“It doesn’t matter who owns us,” he said. “It is really about making this business productive and efficient and continuing to do the good work we do in the community.”

However Mr Van Breda did not support another COA recommendation that Stanwell’s coal interests be sold.

“The only reason we are profitable is because we have another revenue stream so the last thing we want to to do is give it up,” he said.

Mr Van Breda said the challenge for Stanwell was to “look at the way we do things and to do them better”.

The challenges that Stanwell faced were the same as when the decision was made to mothball two power generating units at Tarong, ie:

Wholesale electricity prices are at a 10-year low

There is an oversupply of electricity in the market driven by higher retail prices

The impact renewable energy schemes are having (solar energy production in Queensland is equivalent to the two units in cold storage); and

Reduced electricity demand.

He said no new power generators would be required in Queensland before 2020-21.

The carbon tax was also having a huge impact that would have to be passed through in some degree to electricity prices.

Mr Van Breda said he had just signed his first carbon tax cheque to send off to Canberra, a massive $270 million.

A Powerpoint slide depicted the average electricity bill, which consisted of: wholesale cost (ie power generation) 16.7 per cent; carbon tax 7.5 per cent; environmental schemes 3.5 per cent; solar power 4.1 per cent; network costs 48.2 per cent, and retail margins 20.0 per cent.

Mr Van Breda said an upcoming 20 per cent increase in retail energy prices from July 1 would have no impact on wholesale prices.

Other points from this morning’s briefing:

Stanwell has just recorded their first “zero harm” week with no workplace injuries of any description at the mine and the power stations.

A change in the leadership structure will occur with the upcoming retirement of Stanwell General Manager Mining Operations Bob Rutten. Mr Van Breda paid tribute to Mr Rutten’s service at the mine and praised him for developing a succession plan: Andrew Walker will take over at Meandu Mine, and Phil David will be responsible for coal assets.

Stanwell is reviewing its current contracts. Expressions of interest were called about six weeks ago to look at all contractors across Stanwell’s 11 sites in Queensland. More than 100 responses have been received and are now being evaluated; agreements should be in place by the end of this year.

The mothballing of the two units at Tarong is complete. The two units are now “asleep” but power is still connected to them, and they are under care and maintenance. Oil pumps are started every few months and the turbines are turned over. They would be ready to start production again with about six months notice. Some parts have been identified which could be used to repair other units.

Efficiency savings have been achieved by shifting a D10 bulldozer from use at the power station stockpile to the mine, saving $850,000 a year; an old D9 bulldozer will be sold.

Bus services for employees have been reduced from three to two per day.

Tarong North – “the most efficient coal-fired power station in the country” – will be 10 years old in August.

Designs have been completed for the Black Creek Dam diversion channel project; it will be put out to tender soon and work could start after the rainy season next year.

Since Downer EDI commenced operations at the mine, and the successful transition to a “one team” approach between Downer and Stanwell, more than $2 million in annual savings have been made.

More and more coal is being found in drilling around the Meandu tenement; there are “adequate coal reserves to sustain generation until 2031 (plus)”

The Hitachi autonomous truck project will be worth $1.8 million in the first year, and $2.3 million in the second; eight Japanese engineers will be living locally. Hitachi selected the Meandu mine for the project out of all the mine locations around the world