Miner back from the edge
Five Bowen Basin mines have a brighter future.
Wednesday 05 April 2017
The future for the Middlemount, Coppabella, Millennium, North Goonyella, and Moorvale mines has been secured following the emergence of parent company Peabody from Chapter 11 Bankruptcy (Administration) in the United States.
The company called in the receivers just over a year ago as it reported total losses of around $A2.6 billion in 2015 due to historically low coal prices - particularly in the US where they have not enjoyed the benefit of a falling Australian dollar.
Since that time it has managed to renegotiate a plan with its lenders, that will see the company return to normal operations, although it has been forced to sell around $5 billion in assets over that time.
In announcing their return to business, Peabody Chief Executive Officer Glenn Kellow said coal and particularly Australian coal had a strong future.
"Peabody is the only global pure-play coal investment, and we have the scale, quality of assets and people, and diversity of geography and products to be highly competitive,” he said.
“We also have taken significant steps to create a capital structure to succeed through all cycles.
“Our financial focus will now be on reducing debt, targeting high-return investments and returning cash to shareholders over time.
“Coal remains an essential part of the energy mix, and Peabody is the largest U.S. coal producer while our Australian platform has access to the higher-growth Asia-Pacific region."
In 2015 per unit costs at Australian coal mines fell to a new record low of just over $51 a tonne, which was enough to keep their operations profitable on a cash basis.However, problems with the US business meant shares in the company fell by 97 percent over the same period, before entering Chapter 11 Bankruptcy protection.