[Ferro-Alloys.com] UK-South African mining firm Anglo American managed to turn a profit at its Australian coking coal operations despite continuing issues with high gas levels, which have kept its 6.5mn t/yr Moranbah North mine closed for 10 days and its 5mn t/yr Grosvenor mine closed for nearly 10 months.
The firm is still investigating a high gas level incident that closed Moranbah North on 20 February, with chief executive Mark Cutifani telling investors that he hopes it will reopen within a month. He still hopes to reopen the Grosvenor coking coal mine in the second half of 2021 following a methane gas incident that closed the mine in May 2020. It has a new longwall to install at the mine once it is allowed to re-enter it in June.
It will probably take most of 2021 to get back up to full run rates at the Australian coking coal operations, Cutifani added.
Operational incidents at Anglo American's Queensland coking coal mines cost the firm $755mn in earnings before tax, interest, depreciation and amoritsation (ebitda) in 2020. Its metallurgical coal division reported ebitda of $50mn in 2020, down from $1.71bn in 2019. Costs rose by 37pc to $86/t fob Australia, excluding royalties, and its average received price fell by 34pc to $109/t.
Cutifani vowed to stick with the Australian coking coal operations despite the operational issues and fall in earnings, which he described as having great earnings potential. Anglo American still plans to exit thermal coal by 2025.
It expects depressed coking coal output to continue next year and has also cut its production guidance for 2022, after it delayed its plans to expand the Moranbah-Grosvenor processing plant in Queensland by 4mn t/yr.
The accident at Grosvenor and uncertainty about reopening dates, have prompted Anglo American to push back its plans to upgrade the processing plant at the Moranbah-Grosvenor complex to 20mn t/yr capacity from 16mn t/yr. This stage one project was designed to maximise throughput as Grosvenor increased to full capacity of 7.5mn t/yr and productivity measures continued to lift output at Moranbah North.
Anglo American has pushed back a final investment decision on this project until 2022, with first production now not expected until 2024 at the earliest. This has led the firm to cut its guidance for 2022 to 22mn-24mn t from 25mn-27mn t and to issue guidance of 23mn-25mn t for 2023 compared with a previous long-term target of 30mn t/yr.
Argus yesterday assessed the premium hard low-volatile coking coal price at $126.65/t fob Australia, down from a recent high of $157.25/t on 1 February. The price is well below the $200/t in June 2018 when Anglo American was pushing forward with the Moranbah-Grosvenor expansion.
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