ENVIRONMENT

Safety top of mind as Peabody ponders North Goonyella future

PEABODY Energy CEO Glenn Kellow said the company would be upholding the highest safety standards as it processed commercial future outcomes for its troubled North Goonyella mine in Queensland and as it dealt with the COVID-19 crisis.

 Peabody Energy's North Goonyella longwall mine in Queensland.

Peabody Energy's North Goonyella longwall mine in Queensland.

North Goonyella has been out of action since an underground fire occurred there in late 2018.

He told an analyst call that the company had succeeded in reducing North Goonyella's holding costs but it would not be compromising at any operations to cut costs.   

"The North Goonyella commercial process is also underway," Kellow said.

"As you would expect, we are closely monitoring the market situation as we proceed with this process as well as an incremental spending related to the re-entry and development of the mine.

"We have also been focused on reducing holding costs at North Goonyella. Most recently we successfully entered into commercial agreements to reduce rail and port commitments beginning mid-year 2020.

"While these reductions, in port and rail commitments span a multi-year period, we maintain sufficient rail and port capacity when the mine resumes operation."

Quarterly holding costs are projected to be about $5 million starting in the third quarter of 2020.

Kellow said that marked an approximately 85% reduction in costs over the past several quarters.

"Overall, it's a time of significant change for the global economy, our business, and our employees globally," he said.

"This team continues to step up to each and every challenge, while keeping safety and health top of mind.

"Coal mining has been designated as an essential business by many governments to support coal fueled electric power generation and critical steelmaking needs.

"Even so, the health and safety of our employees and broader communities remain at the forefront of all we do.

"We're following recommendations by the Australian Department of Health with rigorous protocols, controls, and prevention measures implies at all of our locations."

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