United Wambo JV to improve strip ratios: Kellow

THE United Wambo joint venture project in New South Wales – which is expected to begin mining in late 2020 – is intended to optimise mine planning and improve strip ratios, according to joint venture partner Peabody Energy CEO Glenn Kellow.
United Wambo JV to improve strip ratios: Kellow United Wambo JV to improve strip ratios: Kellow United Wambo JV to improve strip ratios: Kellow United Wambo JV to improve strip ratios: Kellow United Wambo JV to improve strip ratios: Kellow

The joint venture enhanced coal quality and offered the opportunity to extend the life of the Wambo surface mine in NSW.

He told an analysts' conference call that the JV also enhanced coal quality and offered the opportunity to extend the life of the surface mine multiple decades.

"As we work to transition the mine to the JV structure, we would expect some temporary elevation of costs and slightly lower production in 2020 as the [joint venture partner] Glencore operations ramp up and cut-over progresses," he said.

Kellow said the company's Wilpinjong extension project in NSW extended the life of one of the premier thermal coal mines in Australia and offered attractive returns.

"These projects are important components to our seaborne thermal strategy and are expected to total a combined to US$100 million in CapEx for 2020," he said.

"Our seaborne thermal business again finished with attractive margins with a record year of rail shipments at Wilpinjong and good performance at our Wambo open-cut mines. It's also very pleasing to note that both mines have signed regulatory approval to advance their extension activities."

Adjusted earnings before interest tax depreciation and amortisation margins for seaborne thermal coal totalled 33% in the December quarter, supported by strong cost performance from the Wambo underground.

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