Thermal shift at Hail Creek
The true cost of Cyclone Debbie on Queensland coal operations
Wednesday 19 July 2017
Hail Creek coal mine has been at the centre of a significant shift in Rio Tinto’s coal business over the last three months.
While the mine has traditionally focussed on steel making coals, thermal coal production at the mine has significantly increased lately.
“Thermal coal production was 15 per cent higher than the same quarter of 2016, due to mine sequencing at Hunter Valley Operations as well as an increased focus on thermal coal production at Hail Creek as a result of Cyclone Debbie,” Rio Tinto said.
In contrast, changing demand and recent weather events have slashed steel making coal output.
“Hard coking coal production in the quarter was 14 per cent below the second quarter of 2016 due to the impact of Cyclone Debbie on Hail Creek, where pit access was restricted by water,” they said.
“Second quarter semi-soft coking coal production was 31 per cent lower than the same quarter of 2016.
“This reflects mine production sequencing changes at the Hunter Valley Operations and Mount Thorley Warkworth following lower market demand for semi-soft coking coal."
Rio Tinto said it now expected coking coal output for the year to be between 7.2 million and 7.8 million tonnes, against a 7.8 million-8.4 million range previously.
Meanwhile, the company expects the sale of its NSW thermal coal business Coal & Allied to Chinese miner Yancoal to be finalised by September.
“The assets are being treated as held for sale from 1 February 2017, from which time no depreciation or amortisation is being recorded,” they said.