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