More mine closures likely, says Anglo CEO

ANGLO American CEO Mark Cutifani expects one metallurgical coal mine to be mothballed every two or three weeks until there is enough uplift in the commodity’s price.
More mine closures likely, says Anglo CEO More mine closures likely, says Anglo CEO More mine closures likely, says Anglo CEO More mine closures likely, says Anglo CEO More mine closures likely, says Anglo CEO

Mark Cutifani

Blair Price

The diversified mining house recently put its Peace River coal mine in Canada on care and maintenance due to poor demand.

While hard coking coal prices have been languishing around $US120 a tonne free-on-board over recent months – even more slippage has been flagged.

“The latest Platts Premium HCC assessment has dropped below $US110/t FOB Australia for the first time since April 1,” Macquarie Private Wealth said last week.

Cutifani is expecting more mines to close as the commodity remains in oversupply.

“If the price is not north of $US150, you’ve got stress right across the industry,” he told the Illawarra Mercury.

“We’ve been seeing some production come out of the market, 20 to 30 million tonnes.

“We’ve dropped another 2.5 million tonnes out of the met coal market with the closure of Peace River. I think you are going to continue to see some of those announcements, maybe once every two or three weeks.

“It won’t make much of a difference this side of the year end, but as we go into next year I am hoping it will start to make a difference.”

Cutifani said he believed a further 30 million tonnes per annum of met coal supply needed to be culled to have any significant meaning.

“I think everybody is doing it tough in met coal, even the markets and our customers are saying there needs to be a higher met coal price, but people keep throwing volume into the market,” he said.

“So, at the end of the day, production that is not making money starts to be turned off, prices will remain tight.”

HCC prices eclipsed $300/t FOB during the boom year of 2011.

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