Carborough Downs helps Vale report record quarterly met coal shipment

IMPROVEMENTS at Vale’s Carborough Downs mine in Queensland have helped the Brazilian giant increase its metallurgical coal shipments in the March quarter to a record 1.4 million tonnes.
Carborough Downs helps Vale report record quarterly met coal shipment Carborough Downs helps Vale report record quarterly met coal shipment Carborough Downs helps Vale report record quarterly met coal shipment Carborough Downs helps Vale report record quarterly met coal shipment Carborough Downs helps Vale report record quarterly met coal shipment

Carborough Downs, image courtesy of Vale.

Lou Caruana

Revenue from sales of coal products reached $US211 million in 1Q13, increasing 4.5% relative to the $202 million in 4Q12.

In 1Q13, revenue from metallurgical coal was $206 million, 13.8% higher than 4Q12. The increase was due to the higher average realised price of $142.09/t, versus $132.49 in 4Q12. Revenue from sales of thermal coal was $6 million in 1Q13.

In 1Q13, adjusted EBITDA for the coal business was $216 million against $172 million, excluding impairment charges in 4Q12.

Vale’s troubled Carborough Downs longwall mine set new production records in the first quarter and has turned a corner, says general manager Kevin Masterson.

The mine produced 1Mt of coal in the first quarter, bettering the previous record as it resolved heating issues.

Ironically, the company’s Moatize coal operations in Mozambique and its thermal coal operations dragged down its quarterly performance.

In February, Vale declared force majeure on a number of its coal sales contracts in the wake of high rainfall in Mozambique.

Total coal shipments including thermal coal were 1.507Mt in 1Q13, a decrease of 5.3% from 1.592Mt in the previous quarter.

Thermal coal volumes amounted to 60,000t, against 228,000t in 4Q12, mainly due to logistics constrains in Moatize.

In 1Q13, coal costs were $261 million, net of depreciation charges, increasing $40 million when compared to 4Q12.

Coal expenses were $155 million in 1Q13 against $142 million in the previous quarter.

In 1Q13, Vale recognised expenses of $120 million for thermal coal inventory adjustment, resulting from the high cost in Mozambique at the current production scale.

Pre-operating and idle capacity expenses were $ 11 million, due to idle capacity of Moatize ($6 million) and pre-operating expenses of Moatize II ($5 million).

The potential of Moatize will be constrained by rail and port capacity until the Nacala corridor starts operations, which is expected for 2H14.

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