Australian longwall and safety protocols will constrain UK-South African mining firm Anglo American's metallurgical coal production, leading it to cut its guidance for 2022, 2023 and 2024.

 

The firm expects to produce 15mn t of metallurgical coal in 2022, at the bottom end of its previously revised guidance of 15mn-17mn t. This is the third time it has revised its guidance this year, having cut its 20mn-22mn t target to 17mn-19mn t in May. It produced 10.36mn t in January-September, leaving it with a target of 4.64mn t for October-December.

 

Anglo American has cut its production expectations through 2022 as it has ramped up the longwalls at its key mines following major safety issues over the past two years. It now has a much clearer understanding of how new safety protocols translate into operational performance, chief executive Duncan Wanblad said.

 

"Once we are confident in the stability of the performance, we can possibly look to reinstate the project to debottleneck the wash plant," he added.

 

The firm cut its 2023 coking coal production guidance to 16mn-19mn t from 22mn-24mn t and its 2024 target to 20mn-22mn t from 24mn-26mn t, as well as issuing an outlook of 20mn-22mn t for 2025.

 

The firm still expects to ramp back up to its previous target of 28mn-30mn t/yr but not in the next three years, Wanblad said. Once it reaches 24mn t/yr it will have to upgrade the wash plant at its Moranbah-Grosvenor complex.

 

Safety issues at the 6.5mn t/yr Moranbah and 5mn t/yr Grosvenor mines led to the review of safety processes at these types of gaseous mines in Queensland, which slowed the ramp-up of Anglo American's production.

 

Wanblad remains committed to the Australian coking coal operations, based on the International Energy Agency's view that blast furnace steelmaking will remain part of the mix through to 2050. "The seaborne market for steelmaking coal that we sell into is expected to be more resilient given it is higher quality [and] supports the more efficient, lower carbon blast furnace production," he added.

 

Anglo American expects its metallurgical coal production costs will rise to $110/t fob Australia, excluding royalties, in 2022 from $105/t in 2021, before returning to $105/t in 2023. Wanblad pointed to the lower production volumes for the increased cost per tonne and said that he hoped it would return towards the $80/t mark once metallurgical coal volumes returned to normal.