Australian met coal producer Coronado Global Resources navigated a challenging final quarter of 2023 marked by heavy rainfall, production disruptions, and shipping delays, but ultimately succeeded in maintaining stable output.
Q4 Production Remains Steady Despite Challenges:
- Saleable production in October-December reached 3.9 mt, a 6.4% increase from the previous quarter’s 3.7 mt, defying the impact of prolonged wet weather.
- However, shipping delays at the RG Tanna Coal Terminal forced the deferral of 0.45 mt of Curragh met coal shipments to January.
Full-Year Output Slightly Lower, Costs Rise:
- Despite Q4’s resilience, full-year saleable production dipped slightly to 15.8 mt compared with 16.0 mt in 2022, mirroring an earlier production downgrade announced in October.
- Average mining costs per tonne climbed to $107.60 due to lower sales, production issues, and inflationary pressures.
Heavy Rain, Train Derailment, and Mechanical Failures Blamed:
- Coronado attributed the lower-than-expected production and higher costs to consistent rain, disruptions caused by a train derailment earlier in the year, and a mechanical dragline failure.
Met Coal Prices Lower, Expansion Projects on Track:
- Average realized prices for Australian met coal fell 24% year-on-year to $206.60/t FOB in the quarter, and $230.20/t FOB for the full year.
- Despite the price decline, the company remains optimistic about future growth. Its Curragh North project in Queensland is on track to deliver first coal in late-2024, with an initial run-rate of 1.5-2.0 mt/y. Furthermore, the Buchanan mine in the United States is slated for expansion to 7.0 mt/y by 2025.
Financial Picture and Looking Ahead:
- Revenue reached US$2.9 billion in 2023, the second highest in company history, while net income came in at $771.0 million.
- Coronado ended the year with $339.0 million in cash and a net cash position of $97.0 million.
- With Sev.en Global Investments now holding a controlling stake in the company, Coronado is poised for further growth in the dynamic met coal market.
Overall, Coronado displayed resilience in Q4 2023, enduring various challenges to maintain stable production. With significant expansion projects in the pipeline and a new ownership structure, the company appears well-positioned to capitalize on future opportunities in the global met coal landscape.
