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For the quarter ended March 2000 BHP Coal lifted coal production 4% to 6.304 million tonnes, with higher production from its Blackwater and Peak Down mines offsetting production lost from the 1999 sale of the Moura Mine.

At the Goonyella mine in Queensland (BHP 52.1%), exploratory mining of a three-heading adit in the Goonyella Middle Seam down-dip from the highwall continued. To the end of March a total of 6,135 metres had been developed by contractor Allied Mining. BHP said the project was on budget and on schedule.

"During January the first bulk coal sample was mined, washed at the Riverside Coal Preparation Plant and the Barney Point Pilot Plant, and tested in the BHP Research coke ovens with encouraging results," the company said.

Additional coal quality and geotechnical drilling north of the adit in the Feasibility Study area continued. Geotechnical and other engineering feasibility studies for a longwall mine are ongoing.

At the nearby Saraji mine (BHP 52.1%) exploration work continued to evaluate potential for a longwall mine in the Dysart seam down-dip of the existing opencuts. A program consisting of 2-D seismic, coal quality bulk sampling and geotechnical drilling continued during the period. BHP said planning of additional exploration work to identify further resources of similar quality coal in the Saraji lease has begun.

In BHP's Illawarra region in New South Wales various options are being examined to secure future supply of high quality coking coal to Illawarra Coal customers at Port Kembla and Whyalla.

"One option is the development of Dendrobium, a new underground mine in the Illawarra No.3 seam," BHP said. "As part of the assessment, exploration and pre-feasibility studies have been carried out. This involved an evaluation of potential mine layout and design and estimation of the capital investment that may be required."

At BHP's San Juan mining project in New Mexico development of an underground longwall mine is proposed to replace the entire 6.3 million tons of annual production from the San Juan and La Plata surface mines. During the quarter, rehabilitation of the underground test mine was completed and necessary underground facilities were re-established to allow commencement of geotechnical studies. Surface core drilling and engineering studies necessary to complete a feasibility study continued.