Switzerland-based trading and mining firm Glencore will close three Australian coal mines when they reach the end of their formal mine lives by the end of 2023, with another awaiting approval to extend beyond 2023.
The firm will close the 5.5mn t/yr Newlands thermal and coking coal mine in the northern Bowen basin in Queensland next year and the 4.5mn t/yr Liddell semi-soft and thermal open pit coal mine and the 2mn t/yr Integra underground thermal coal mine in the Hunter Valley region of New South Wales (NSW) in 2023.
Its 3.7mn t/yr Glendell open pit thermal coal is also scheduled to close in 2023, but its mine life could be extended by 20 years if it is approved. Glencore submitted its plan to the NSW government in January 2020 to expand Glendell to 10mn t/yr and to extend its lifespan by 20 years to 2044.
The four Australian mines that could reach the end of life by 2023 produced 11.79mn t of coal between them in 2020, down from 13.1mn t in 2019 and below a nominal capacity of 15.7mn t, according to Glencore's factsheet. The decline is partly due to Glencore's decision to cut Australian coal production in 2020 due to low prices.
Glencore's Australian coal production remained depressed in the first half of 2021. Despite higher exports in July-September, Glencore's Australian coal production saw less thermal and semi soft coking coal in January-September 2021 than in the same period of 2020. It may end the year strongly on stronger pricing, although port data suggests that November was not a great month for Australian coal exports due to flooding and rail maintenance.
The decline in output from the closure of these mines will partially offset Glencore's increased production from its increased ownership in the 28mn t/yr Cerrejon joint venture in Colombia and its 16mn t/yr Rolleston thermal coal mine Queensland. It is not enough to fully offset these ownership increases, with the firm aiming for 122mn t of coal production in 2023-24, up from the 112mn t target it set a year ago.
Thermal coal prices have eased from record highs in mid-October but are still above long-term averages. Argus last assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $159.64/t fob Newcastle on 3 December, down from $251.43/t on 15 October but up from $65/t a year earlier.
Argus last assessed PCI and semi-soft coking coal prices at $252.40/t and $225/t fob Australia on 6 December, up from $110/t and $92.90/t respectively on 7 June. Argus last assessed the premium hard low-volatile coking coal price at $327.50/t fob Australia on 6 December, down from $398/t on 11 October but up from $110.95/t on 11 May.
| Glencore coal production | mn t | ||||
| Mine | Nominal capacity | 2020 saleable coal | 2019 saleable coal | Coal type | State |
| Glendell | 3.7 | 2.2 | 3.3 | thermal | NSW |
| Liddell | 4.5 | 4.0 | 3.6 | semi-soft coking, thermal | NSW |
| Integra | 2.0 | 2.0 | 1.7 | thermal | NSW |
| Newlands | 5.5 | 3.6 | 4.5 | coking, thermal | Queensland |
| Total | 15.7 | 11.8 | 13.1 | ||
| Source: Glencore | |||||
| Total is just for listed mines, not all Glencore mines | |||||
