Moving Into the Resource Business

The BHP Billiton Mitsubishi Alliance (BMA) mines in Queensland, Eastern Australia, cover an area twice as large as the Republic of Singapore and produce high quality coal. Over 90% of BMA's total coal output is coking coal for steelmaking. (During steelmaking, coking coal and iron ore are loaded into the blast furnace, where the coking coal turns into coke that acts as a reducing agent). The coal is supplied to consumers in approximately 30 countries around the world, including Japan, South Korea, Brazil, India, and countries in Europe. BMA is the world's largest supplier, shipping 50 million tonnes per annum (Mtpa).

MC established the wholly owned subsidiary Mitsubishi Development Pty Ltd (MDP) in Australia in 1968 as a resources investment company. Through MDP, we manage the mining of coking coal and thermal coal, which is used as fuel. In 2001, MDP established BMA in collaboration with BHP Billiton Ltd., the world's largest resources firm, and embarked on large-scale coal mining operations in Queensland. This required an investment of some ¥100 billion. We took on the operational risk of such an enormous investment and the significant challenge of becoming a full-scale coal resources company as part of MC's plans to become a key player in the coking coal industry.

Rehabilitating Large-scale Open-cut Mines

BMA's coal operations mine coal seams relatively close to the surface, so open-cut mining is possible without digging tunnels. However, earth and sand still need to be removed to depths of over 100 meters until the coal bed is reached.

Preparation for the mining process starts with the removal of the topsoil. Regions with little rainfall, such as where BMA is situated, are not forested and the topsoil is covered with grasslands mixed with scrub. About 30-40cm of topsoil is removed for each type of vegetation and kept at a separate location. Mining can then take place and this process can leave a large crater. After all the coal has been mined, the crater is backfilled with earth and soil removed from mining operations at an adjacent site and heavy machinery is used to smooth over the area. This is then covered by the stockpiled topsoil with the preserved vegetation or seeds from the surrounding area. This rehabilitation process returns the site to a state similar to that before mining started, although the ground surface elevation is lower by an amount equivalent to the coal removed from the site.

"After rehabilitation, it can be difficult to realize that the area had been a coal mine. We take an enormous amount of care in our work to restore the environment." (Norikazu Tanaka, MDP Unit, Ferrous Raw Materials Division)

We supply water and fertilizer to topsoil being stockpiled so the vegetation does not die off. After rehabilitation, we monitor vegetation recovery to check whether it is taking root and whether animals are returning to the area. BMA employs ecology specialists in the planning, rehabilitation, and surveying stages to facilitate the entire process.

Four Priorities: Health, Safety, Environment and Community

Coal mining uses large volumes of water. Water used to clean the coal is channeled into a tailing pond, the impurities sink to the bottom over a number of years, and the water is monitored according to strict environmental regulations until clear water rises to the surface. Water quality is then checked before the water is used for rehabilitation programs or recycled to wash coal. Rainwater or underground water can also accumulate in the coal mine at numerous sites and this is used to water vegetation or to prevent dust blow-off. Employee safety is also an important factor in operations. Between 2006 and 2007, BMA won a number of health and safety awards, including a National Minerals Industry Excellence Award for Safety and Health.

"The mining industry uses the term HSEC to describe health, safety, environment, and community. Our management meetings prioritize our activities in these four key areas. Our company has long been engaged in environmental, social, and health and safety issues." (Tanaka)

"We don't do anything without taking into account environmental and local community factors." (Yasushi Okayama, MDP Unit, Ferrous Raw Materials Division)

Co-existing With Local Communities

When MDP was first established, we worked to improve the local infrastructure, such as roads, electricity, and water supplies to support local communities. BMA donates grants through local authorities to improve infrastructure in the towns where our employees live. MDP and BMA also make contributions each year to the local community, universities and other groups. For example, MDP supports a lecture series at the University of New South Wales (UNSW), while BMA contributes to universities, sports groups, and NGOs. When MDP started developing new iron ore resources in Western Australia, it built links with local aboriginal communities, provided employment opportunities, and conducted surveys on cultural heritage and provided programs to support the continuation of aboriginal culture. Being able to co-exist with the local community is key in the resource business.