While hunting for bargains is a favourite pastime during sale time at the local shopping centre for Mrs Hogsback and thousands of other shoppers, Hogsback quickly tires of the crowds and the frenzied buying.
It seems mine companies are driven by the same passions.
The recent spike in the coking coal price courtesy of Tropical Cyclone Debbie has created a window of opportunity for some major mining keep to do some offloading while also providing the opposite – a sound reason for holding on to solid assets.
We understand that Rio Tinto Coal has been getting some serious due diligence done on its prized Kestrel longwall coal project in Queensland.
Apparently the company has retained Credit Suisse and from reports in the mine there has been a steady stream of very interested buyers having a good look over the high performing longwall at the mine.
The mine’s southern extension had a troubled start back in the days when Tom Albanese was running Rio. It went over budget and the operation seemed hopelessly overcapitalised.
How things have changed. With a determined and professional crew, the longwall at Kestrel is now one of Australia’s leading units.
Rio Tinto’s hard coking coal production was 4% higher in 2016 at 8.1 million tonnes and fourth quarter volumes were 15% higher than the same quarter of 2015 due to longwall and plant outperformance at Kestrel.
It would be a shame if Kestrel and its stable mate, the Hail Creek mine in Queensland, were bought by a private equity concern that only used them as an asset stripping exercise.
The corporate memory at Kestrel, which is Rio Tinto’s only longwall operation, is valuable and could be harnessed by a switched-on management.
This seems to be the thinking over at Anglo American, where CEO Mark Cutifani has decided to hold on to the Grosvenor and Moranbah North longwall mines in Queensland’s Bowen Basin.
Moranbah North had a stellar 2016 under the stewardship of the mine’s general manager Craig Manz.
The mine delivered its highest yearly production total ever of 7.6Mt run-of-mine coal for 2016 in challenging mining conditions.
This surpassed its previous production record of 6.9Mt ROM set in 2015.
Coupled with this is Moranbah North’s best longwall production rate to date of 9582m and record saleable tonnes washed of 5.7Mt.
Manz said Moranbah North proved in LW111 that with high operational standards and attention to detail the operation could maintain positive safety and consistent production in the more challenging areas.
He said said 2017 was looking to be an "interesting year with unpredictable coal prices and challenges" with the start-up of LW112 in what had historically been known as “tiger country” due to its structured strata.
Maybe mining companies should place more faith in the ability of their operational management and the culture down the mine to produce good results, as has been demonstrated at Moranbah North.
Once these results start coming, they should back mine site teams and give them assurances that they will continue to operate in a secure ownership environment.
