Rio Tinto Energy – which includes the company’s coal assets – made an underlying loss of US$210 million in 2014 compared with underlying earnings of US$33 million in 2013 as annual site production records at a number of mines could not offset the impact of lower prices, which reduced earnings by US434 million.
“In 2014 thermal and coking coal prices continued the declining trend that began in 2011 […] reaching five and seven year lows, respectively,” the company said in a media release. “The low price environment resulted in a large share of industry production being cash negative and the closure of some higher-cost Australian mines.”
In response, the company slashed CAPEX by 69% in 2014 to US$224 million from US$732 million in 2013 and focused on “positioning its assets further down the cost curve through a range of cost, productivity and revenue enhancements.”
The company’s thermal coal production grew 15% in 2014 following site records at Hail Creek and Bengalla, as well as at its Hunter Valley operations.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/12022015/rio-tinto-energy-posts-210-million-dollar-loss-in-2014-coal1881/