Another North Goonyella bite for Peabody

US INVESTORS have launched a class action against Peabody Energy over the North Goonyella fire in late 2018, which caused production to stop at the mine.
Another North Goonyella bite for Peabody Another North Goonyella bite for Peabody Another North Goonyella bite for Peabody Another North Goonyella bite for Peabody Another North Goonyella bite for Peabody

Peabody Energy's North Goonyella mine in Queensland.

Peabody also announced the US District Court supported Federal Trade Commission efforts to block the formation of a proposed joint venture with Arch Coal.

The investors claim they were misled by the company about gas levels in the Queensland mine and that the severity of the underground fire that halted coal production for two years was overly downplayed.

''Peabody downplayed these concerns,'' the investors said in their statement of claim.

''Even after the fire and the announcement of both an internal and a governmental investigation, defendants continued to mislead investors about the company's plan to restart operations at North Goonyella, falsely assuring investors that the company would be able to mine significant coal at the North Goonyella mine in the near-term, while continuing to conceal major issues that would impede any progress at the mine and which would ultimately cause [the] QMI [Queensland Mines Inspectorate] to reject its plans.

''Defendants' statements conditioned investors to believe that its low-cost plan to restart operations at North Goonyella was reasonable and had a high likelihood of regulatory approval, while simultaneously omitting to disclose that the plan posed unreasonable safety and environmental risks such that QMI would likely mandate a safer, more cost-prohibitive approach that would cause major delays in restarting the mine.''

Once a flagship mine for Peabody in Australia, North Goonyella has not produced coal since the underground fire.

Peabody made provisions of US$149.6 million for equipment lost in the North Goonyella fire and also paid $86.7 million of "containment and idling costs" relating to the mine.

A Peabody spokeswoman said: "We are confident our disclosures have been proper".

Speaking about the US FTC decision, Peabody CEO Glenn Kellow said the company's focus was on continuing to be the low-cost US Powder River Basin coal provider to best compete against natural gas and subsidised renewables. 

"We remain committed to ensuring our customers continue to have access to a reliable and affordable fuel source," he said.