Some of the stalwarts of the coal mining industry seem to be doing the “here today and gone tomorrow” trick and it’s leaving Hogsback just a little giddy.
This week it was announced that Anglo American would be exiting the coal industry. Completely. Forever.
Just a little hard to fathom given the company’s Grosvenor and Moranbah North mines have just won praise around the world for the way they have been using innovative management and mining techniques to come up with new solutions to age old problems.
Grosvenor took the audacious step of using a tunnel boring machine to construct its drives. Pretty smart idea that.
Not rocket science but a system used very successfully by the construction boys to build road and railway tunnels.
The teams at Anglo must have been chuffed they pulled it off and created a brand spanking new longwall mine. It’s almost a tourist attraction for the town of Moranbah.
Forget about the Gold Coast. Come and see this great mine that we made!
Also in Queensland, the Anglo American team at Grasstree have been winning plaudits for their work on its longwall, which last year clocked up 10 million tonnes per annum of production. Longwall crews that reach that figure would normally expect to go down in the coal mining hall of fame.
But alas, not now. Grasstree is now just another Anglo American asset that needs to be made ready for sale.
And who or what would be in a position to buy these great assets, given that the whole industry is haemorrhaging at the moment?
Anglo has come up with the idea of packaging Grosvenor and Moranbah – a kind of two for one deal. Hogsback generally likes that arrangement at the local pub during “happy hour” when he thinks it is an economical way of shouting his over-thirsty mates.
But to flog two prized assets like that – at a substantial discount - almost makes Hogsback want to cry in his aforementioned beer.
One can only imagine the agonising that Anglo American CEO Mark Cutifani went through to make that decision.
He’s a coal man through and through. He studied for his mine engineering degree at the University of Wollongong so he’s got Illawarra coal in his veins, if not in his lungs.
But he’s made a strategic retreat from coal at probably the worst time – a fire sale in the middle of the bushfire season.
The black stuff has been sitting in the ground for millions of years, patiently waiting for a shearer or dragline to come and scoop it up.
Not only does it provide good base load power, its essential for steel making. That’s not going to go away.
China might be slowing down this year but they think of time in terms of millennia. Hogsback thinks it would be prudent for some of our mining leaders to adopt a more sagacious approach and learn from our Asian export partners.
Take the long term view and keep investing and developing the coal mining industry for decades to come.
