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Environment industries archive


Key departmental publications, e.g. annual reports, budget papers and program guidelines are available in our online archive.

Much of the material listed on these archived web pages has been superseded, or served a particular purpose at a particular time. It may contain references to activities or policies that have no current application. Many archived documents may link to web pages that have moved or no longer exist, or may refer to other documents that are no longer available.

BHP Coal Illawarra
Cleaner Production - Utilisation of Methane from Collieries


BHP Coal Illawarra operates four underground coal mines in and around the Illawarra region of NSW, which is situated north-west of Wollongong and some 75 kilometres from Sydney. Three of these mines, the Appin, Tower and West Cliff mines produce around 3.5 million tonnes of coal per year. The coal is primarily used for domestic steel making, although some coking and energy coal is also exported.

Pre-excisting Process

Gaseous methane is contained within subterranean coal seams and is a potential safety hazard because of its explosive nature. Methane is also a greenhouse gas with a greater greenhouse potential than carbon dioxide. (One kilogram of methane is equivalent to 21 kilograms of carbon dioxide in terms of greenhouse warming potential (Future directions for Australia's National Greenhouse Strategy - discussion paper, March 1997. Prepared by the Intergovernmental Committee on Ecological Sustainable Development.)

Prior to the cleaner production initiative, approximately 250 million cubic metres per year of methane was released to the atmosphere from these mines annually. This was seen as a wasted resource.

Cleaner Production Initiatives

In 1995, BHP, in conjunction with Energy Developments Limited and Lend Lease Infrastructure developed a power generation plant that uses waste methane to generate up to 94 megawatts of electricity - enough to power 60,000 homes.

Supply of the fuel for electricity generation is achieved by capturing methane from within and below the coal seam. It is piped to the generation plants on the surface where it is distributed to a series of modular gas engines that drive electrical generators. 

Natural gas supplied by pipeline is used as supplementary fuel in the event of a shortfall in methane supply from the mines.

Tower Power Plant

Tower Power Plant, New South Wales

The capture and utilisation of methane from coal seams provides a major environmental benefit through reduced release of greenhouse gases in the form of methane emissions. This was a significant consideration in determining the benefit of the project.

Advantages of the Process

BHP pays a fee to Energy Developments Limited to operate the generation plant, however the energy that is generated is sold by BHP to the electricity grid. Some of the substantial gas collection costs incurred by BHP, which must be met to allow mining to continue, are recovered in this way.

Methane drainage of the mines is required to allow mining to continue safely. 

Utilisation of the methane provides an important energy resource while reducing BHP Coal Illawarra's greenhouse gas emissions by approximately 50 per cent. This represents a reduction in greenhouse gas output by the equivalent of approximately three million tonnes of carbon dioxide per year.

In addition to providing an independent source of electricity for the community and the mines, the utilisation of an otherwise wasted resource reduces the amount of coal consumed by the state's power stations. This has an additional benefit in reducing total carbon dioxide emissions.


One of the main barriers experienced in this project arose from deregulation of the power industry. This made it difficult to estimate future electricity prices, which were a key consideration in determining the economic viability of the project.

The power generation plant also emits oxides of nitrogen as a by-product of the combustion process and these can contribute to the formation of photochemical smog. A management plan for reducing nitrogen oxide emissions when ambient ozone levels approach target levels is in place. This plan was developed in conjunction with the Environmental Protection Agency (EPA).

At the Appin site, the captured methane was initially supplemented by supplying mine ventilation exhaust as the air feed to the gas engines. This practice enabled a significant proportion of the low purity methane in the mine ventilation air to be utilised in the power generation plant, however the requirement to filter impurities from the mine ventilation air was not economically viable and this practice has been discontinued.

Further Developments

The initial power plant was developed on the capture of methane from only the Appin and Tower Collieries however, upon the acquisition of the West Cliff Colliery in 1997, BHP extended the methane recovery program to include the new mine.


Rob Holdsworth
Gas Utilisation Manager
Appin, Tower and West Cliff Collieries
BHP Illawarra Coal
PO Box 514
Unanderra NSW 2530
Ph: 02 4629 2364
Fax: 02 4629 2309

Implementation: 1995
Further initiatives: 1997
Casestudy initially prepared: June 1997 by the Australian Centre for Cleaner Production

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Last modified: May 2001