North Goonyella improved yields, increased automation and optimised production of its longwall top coal caving system in the three months to June 2014 as the company’s investment in upgrading production techniques paid dividends and helped lower the overall costs of production.

The challenge for the company is to continue pushing the limits of automation and productivity and extracting greater value from its fixed plant in the third and fourth quarters without extra capital investment.

Capital spending targets for Peabody’s 2014 financial year have been reduced to between $US200 and $220 million.

Australian costs that have been lowered to about $70 per ton as a result of successful cost reduction initiatives and operating performance, according to the company.

Peabody has seven mining operations in Queensland: the Burton, North Goonyella, Eaglefield, Millennium, Coppabella, Moorvale and Middlemount mines span the length of the Bowen Basin in northern Queensland.

Peabody Energy chief operating officer Glenn Kellow told an analysts’ presentation that the company’s Australian operations had improved both safety and productivity at its mines.

“Turning to our mining platform, we are improving the way we manage our four longwall mines to maximise productivity, and we are seeing strong performance from our North Goonyella and Metropolitan longwall mines in Australia. Production is up more than 55%, and productivity increased 40% over the second quarter at North Goonyella,” according to a report of his speech in Seeking Alpha.

“We are now focused on increasing uptime and enhancing yields, which we expect will provide further benefits. The scheduled third quarter longwall moves at the Metropolitan and Wambo mines went very smoothly, with Metropolitan reaching record production and size levels in August.

“We are not done with our cost reduction initiatives. We are further reviewing all opportunities to better shape our organisation and drive cost out of the business.

“Peabody benefits from a well capitalised platform and we continue to make improvements to our maiden programs. These include further enhancements to condition based monitoring, to increase our equipment availability, lower our funding costs and lower capital expenditures.”