Peabody reduces coal production at Australian mine

Peabody Energy announced that it is reducing metallurgical coal production by approximately 1.5 million tpa from the Burton Mine in Queensland, Australia.

Burton Mine

The Burton Mine is Peabody's highest unit-cost operation, and production levels are not sustainable in the current market environment. Following negotiations with the contractor operator, production levels are expected to be reduced to approximately 1 million tpa, as the operation targets lower-cost reserves using reduced fleets of equipment.

Australian cost estimate

Peabody also reduced its annual average Australian cost estimate to the low US$ 70/t range while raising Q3 financial targets. The company now targets Q3 adjusted EBITDA of US$ 150 million to US$ 200 million, an increase of US$ 10 million from the target provided in July.

The company is reducing 2014 targeted metallurgical coal sales from the Australian platform by 1 million t to 15 to 16 million t, with new Australian sales targets of 34 to 36 million t.

Target lower costs

The initiative is one of a number of positive actions in Australia as Peabody continues to target lower costs, which include increased productivity at the Metropolitan Mine following installation of a new longwall, improved performance at New South Wales thermal coal mines, ongoing owner-operator conversions, and sustained cost and productivity improvement programs across the platform.

Adapted from press release by Katie Woodward

Read the article online at: https://www.worldcoal.com/coal/05082014/peabody-lowers-production-at-australian-coal-mine-1166/