15% increase for 2018
Miner predicts major rebound after TC Debbie derails the biggest year in basin’s history
Wednesday 19 July 2017
BHP says five out of its nine Bowen Basin coal mines would have achieved record production last financial year were it not for Tropical Cyclone Debbie.
As it is, the company has had to content itself with record production at Peak Downs and Saraji, and the knowledge that their dewatering systems worked.
“Mine operations recovered quickly after the cyclone, as dewatering infrastructure installed after the 2011 floods worked as designed, and force majeure was declared for all Queensland coal products on 5 April 2017 and was lifted on 1 July 2017,” they reported yesterday.
“[However] Queensland coal production for the 2017 financial year was lower as a result of damage caused by TC Debbie to the network infrastructure of rail track provider Aurizon.
“Despite the impacts of TC Debbie, Peak Downs and Saraji achieved record annual production underpinned by improved stripping and mining performance, and utilisation of latent wash-plant capacity, including approximately 2 Mt trucked to Caval Ridge.
“Three additional mines were on track for record production before Cyclone Debbie.”
Overall coal production was down by six percent to forty million tonnes which BHP believes will be reversed next year when they are expecting production increases of as much as 15% across their Central Queensland operations.
Broken down into their two coal businesses, BHP Mitsubishi Alliance performed slightly better with total coal production down just 2 million tonnes to around 31.5 million tonnes. BHP Mitsui Coal production fell 3.5 million tonnes.
Total coal sales were down by about 3.5 million tonnes to just under 39 million tonnes.
As has been well documented, there was a significant rally in coal prices in the last twelve months - in some cases to record Australian dollar levels.
As a consequence, BHP reported that the average price received for their coking coal this financial year was up 117% to $180US/tonne. Weak coking coal and thermal coal prices were up 75% and 56% respectively for the same period.
However, prices have steadied in the last six months at around $180US / tonne for hard coking coal, $122US / tonne for weak coking coal and $75US / tonne for thermal coal.
Enough to make all their operations in the Bowen Basin cash flow positive.