Cloud Peak Energy's Cordero Rojo mine, which produces 8423Btu/lb coal, produced 36.08 million tons in the 12 months ended in the second quarter, down 4.5% compared to the year-ago period.
Cloud Peak is reducing production at Cordero Rojo by about 10Mtpa starting in 2015.
According to SNL Energy over-the-counter market survey data, 2015 Powder River Basin 8800Btu/lb coal was priced at $12.62/ton as of August 5. The 2015 8400Btu/lb coal product was priced at $10.14/ton.
“There is quite a spread at the moment,” Cloud Peak CEO Colin Marshall reportedly said during the company’s second-quarter earnings call July 29.
“I'd look at it and say, ‘well, I'm glad we're not trying to sell those tons into next year because I think at the moment the prices aren't that attractive’. So, it reinforces why we made the decision (to cut production at Cordero Rojo), and we think that being able to deploy those assets to the dragline and some other assets around the business will give us the best return.”
Ten of the 16 Powder River Basin mines reported higher production in the second quarter than the previous corresponding period, according to research by SNL Energy.
Production from the mines in the 12 months ended in the second quarter totalled 412.66Mt, down 0.4% from the 414.44Mt produced in the previous corresponding period.
