Peabody Reopening Metropolitan Coal Mine, Australia
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U.S. energy firm Peabody Energy will reopen its 1.8mn t/yr Metropolitan coking coal mine in Australia’s Illawarra region of New South Wales (NSW) this month after it was closed in early January because export orders dried up.
The firm had planned to reopen the mine by the end of February. But China’s continuing import ban on Australian coal has made it difficult to find new markets for hard coking coal that had been sold to domestic steel producer BlueScope’s nearby Port Kembla steelworks. Workers are due to return to the mine this week, with longwall production resuming this quarter and rising to full production during July-September.
Peabody cut a third of the Metropolitan workforce in June to try to align its production levels with lower coal demand because of the impact of Covid-19 pandemic. This followed similar negotiations at the firm’s 2.5mn t/yr Wambo thermal coal and semi-soft coking coal underground mine in the Hunter valley region of NSW.
Peabody last month sold its Millennium and Mavis Downs coking coal mines to MetRes, a joint venture between Australian coal mining firm Stanmore Coal and Australian trading firm M Resources Trading.
The parity pricing between Australian hard coking coal and PCI grade coal is because of Chinese customers that are banned from buying Australian coal paying premiums for Russian coal at a time when supplies of PCI coal are tight.
Peabody expects its seaborne metallurgical coal exports to increase in 2021 compared with 2020, although this is dependent on a continued increase in customer demand.
Metropolitan produced 1.4mn t of coking coal in 2019, down from 1.7mn t in 2018 and 2mn t in 2016. Peabody prior to the Covid-19 pandemic had been looking for ways to boost its coking coal sales, after it was forced to close its Goonyella North mine in Queensland because of a fire in September 2018.
Source: Argus
About Peabody Energy
Peabody is the leading global pure-play coal company and a member of the Fortune 500, serving power and steel customers in more than 25 countries on six continents. The company offers significant scale, high-quality assets, and diversity in geography and products. Peabody is guided by seven core values: safety, customer focus, leadership, people, excellence, integrity and sustainability.
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