Low prices lead to Qld coal cutbacks

LOW thermal and metallurgical coal prices are expected to slow down the development of Queensland’s Galilee Basin and lead Anglo American to reduce the number of operating longwalls at its Moranbah North mine from two to one next year.
Low prices lead to Qld coal cutbacks Low prices lead to Qld coal cutbacks Low prices lead to Qld coal cutbacks Low prices lead to Qld coal cutbacks Low prices lead to Qld coal cutbacks

A fitter at the Moranbah North shearer.

Lou Caruana

Coal mining companies are not immune to the industry downturn as mining companies, including iron ore major Fortescue Metals Group, announce project cutbacks.

Moranbah North general manager Glen Britton is believed to be under pressure to reduce costs per tonne without having to resort to extra longwall production following a mine accident last year.

On November 7, a drift at Moranbah North suffered a roof collapse, which is believed to have cost Anglo at least 40,000 tonnes in lost production.

An Anglo spokesperson told ILN the operations at Moranbah were halted “due to a slump of ground in a conveyor drift”

Moranbah North produced 3.3 million tonnes of coal in 2011 and was forecast to produce 5.5 million tonnes per annum of raw coal in 2012, according to Coal Services statistics.

Anglo’s Capcoal, Dawson, Foxleigh and Moranbah North mines in Australia produce high-quality metallurgical coal.

Anglo is currently the world’s No.3 producer of metallurgical coal. Most of its Australian metallurgical coal is mined in Queensland.

Two new hard coking mines, Grosvenor and Moranbah South, were planned to come on stream by 2020. Teamed with other brownfield expansions, these projects will take annual production of metallurgical coal to more than 24Mt in 2020.

But if prices remain at their current depressed levels, this may be in doubt.

The future of the Galilee Basin, which has seen billions of dollars of investment from India’s GVK and Adani groups as well as Clive Palmer’s Waratah Coal and Bandanna Energy, is also looking less certain.

“Galilee Basin will have its time, thanks to rising China demand, but not in the next four to five years," managing director of Bandanna Energy Michael Gray told a coal conference in Brisbane.

Bandanna, which had plans to produce up to 20Mt of coal from its South Galilee Project, was initially scheduled for a 2015 start, but that now seems doubtful.

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