US-based coal producer Peabody Energy expects no meaningful output from its North Goonyella coking coal mine in Australia’s Queensland for at least three years, following a review of the mine’s condition following a fire more than a year ago.
The review showed that it is too expensive and complicated to ventilate and restart mining in the area where it was operating when elevated gas levels led to a fire that closed the mine on 1 September 2018. Peabody will instead look at options to ventilate and then re-enter a different area, known as Zone B, to access around 20mn short tons (st) of high-grade hard coking coal. While some development coal maybe produced in the second half of 2020, the mine will not produce significant amounts of coal for at least three years.
Beyond this initial plan to access 20mn st of coking coal in Zone B, the firm is looking at options to access 65mn st of hard coking coal in the lower seam of Zone A. But this is a longer term project that is only just entering a feasibility study.
Peabody is also working on upgrading the coking coal that it can offer from its other Australian mines, as customers increasingly move towards wanting higher grade product. It has approved the Moorvale South extension project, which will cut the mine’s pulverised coal injection grade metallurgical coal production and increase its output of higher grade coking coal. The extension will also allow for more blending of Moorvale coal with coal from Peabody’s nearby Coppabella mine, which the firm said will further improve coal quality.
Peabody sold 1.8mn st of seaborne metallurgical coal during July-September and 6.2mn st in January-July, down from 2.8mn st and 8.7mn st respectively in the same period last year, with the fall largely because of the closure of North Goonyella.
North Goonyella produced 2.9mn st of premium medium-volatile, high-strength coking coal in 2017, which was its last full year of operations. It contributed to Peabody’s 11.7mn st of metallurgical coal exports from Australia in 2017. North Goonyella output is shipped through the 85mn t/yr Dalrymple Bay Coal Terminal, as is coal from Moorvale and Coppabella.
