Latest Market News

Anglo awards $176mn of Australian coal mine contracts

  • Spanish Market: Coking coal
  • 24/11/20

UK-South African mining firm Anglo American has awarded A$240mn ($176mn) of contracts for its 3.5mn t/yr Aquila project in Australia that is on track for first longwall production of premium quality hard coking coal in early 2022.

Anglo American has awarded contracts worth almost A$200mn for two complete longwalls, which will be delivered to the mine ready to start operation. This should simplify the start up at Aquila, which will extend the life of the firm's Grasstree underground coking coal mine in Queensland by six years to 2028.

Anglo has been beset by safety problems at its other Australian operations this year, with a methane gas explosion closing its Grosvenor mine until at least the second half of 2021. This followed the firm cutting its coking coal production guidance for 2020 in February from 21mn-23mn t after a roof collapse at its 6.5mn t/yr Moranbah North in Queensland mine in January. The explosion at Grosvenor has raised questions over Anglo American's ability to safely manage underground coal mines in Queensland.

"Aquila will be a breakthrough project, designed to set a new standard of safety and performance by leveraging technology and focusing on operational improvements," Anglo American's metallurgical coal business chief executive Tyler Mitchelson said.

Anglo American approved the Aquila development in July 2019 when premium hard low-vol coking coal prices were at around $185/t fob Australia. Argus last assessed this price at $98.75/t on 23 November, the lowest since the middle of 2016. The price was driven lower from a recent high of $136/t at the beginning of October by Beijing's introduction of a ban on imports of Australia coal from the middle of October. Suppliers hope that the Chinese ban will be revoked when new quotas are implemented at the beginning of the new year.

Development at the Aquila site, which is part of Anglo's 6.5mn t/yr Capcoal mining complex in the Bowen Basin, began in September. There are some 500 people working on engineering, surface construction and underground development.

The Grasstree mine produces the German Creek premium low-vol hard coking coal brand.

Anglo owns 70pc of Aquila, with Japanese conglomerate Mitsui holding the other 30pc through the Capcoal joint venture.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

23/07/24

US House passes waterways bill

US House passes waterways bill

Houston, 23 July (Argus) — The US House of Representatives overwhelmingly approved a bill on Monday authorizing the US Army Corps of Engineers (Corps) to tackle a dozen port, inland waterway and other water infrastructure projects. The Republican-led House voted 359-13 to pass the Waterways Resources Development Act (WRDA), which authorizes the Corps to proceed with plans to upgrade the Seagirt Loop Channel near Baltimore Harbor in Maryland. The bill also will enable the Corps to move forward with 160 feasibility studies, including a $314mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. Water project authorization bills typically are passed every two years and generally garner strong bipartisan support because they affect numerous congressional districts. The Senate Environment and Public Works Committee unanimously passed its own version of the bill on 22 May. That bill does not include an adjustment to the cost-sharing structure for lock and dam construction and other rehabilitation projects. The Senate's version is expected to reach the floor before 2 August, before lawmakers break for their August recess. The Senate is not scheduled to reconvene until 9 September. If the Senate does not pass an identical version of the bill, lawmakers will have to meet in a conference committee to work out the differences. WRDA is "our legislative commitment to investing in and protecting our communities from flooding and droughts, restoring our environment and ecosystems and keeping our nation's competitiveness by supporting out ports and harbors", representative Grace Napolitano (D-California) said. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US House to vote on waterways bill


22/07/24
22/07/24

US House to vote on waterways bill

Houston, 22 July (Argus) — The US House of Representatives is expected to vote on 22 July on a waterways bill that would authorize new infrastructure projects across ports and rivers. The Water Resources Development Act (WRDA) is renewed typically every two years to authorize projects for the US Army Corps of Engineers (Corps). The bipartisan bill is sponsored by representative Rick Larsen (D-Washington) and committee chairman Sam Graves (R-Missouri). The full committee markup occurred 26 June, where amendments were added, and the bill was passed to the full House . A conference committee will need to be called to resolve the different versions of the bill. The major difference between the bills is that the House bill does not include an adjustment to the cost-sharing structure for the lock and dam construction and other rehabilitation projects. The Senate Committee on Environment Public Works passed its own version of the bill on 22 May, with all members in favor of the bill. The House version of the bill approves modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland, along with 11 other projects and 160 feasibility studies. One of these studies is a $314.25mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

South32 misses Australian coking coal output target


22/07/24
22/07/24

South32 misses Australian coking coal output target

Sydney, 22 July (Argus) — Australian-South African diversified resources company South32 was 2pc off its coking coal production target of 4.4mn t at its Australian Illawarra coal operations in the 2023-24 fiscal year to 30 June. The firm is on track to complete the sale of its Illawarra operations in New South Wales (NSW) state by the end of September, marking its exit from coal as it focuses on its non-ferrous metal portfolio. It completed three and started a fourth longwall move at the Appin and Dendrobium mines, leaving new owner Golden Energy and Resources and M Resources with a lower maintenance burden into 2025. South32's total coal production was down by 24pc in 2023-24 compared with the previous year, largely because of maintenance. The firm increased production in the fourth quarter and final half of 2023-24 after a weak first half but the quarter was still down by 15pc on April-June 2023. South32 expects its costs for 2023-24 to be around $150/t, which is in line with its guidance, which was raised from $140/t in February. It received an average price for its Illawarra coal of $275/t for its metallurgical coal and $113/t for its thermal coal for January-June compared with $276/t and $101/t respectively in July-December 2023. The firm's operating margins at its Illawarra metallurgical coal operations were $17/t on thermal coal and $152/t on metallurgical coal in 2022-23 when its operating costs were $127/t. It will release its 2023-24 results on 29 August. Argus last assessed the premium hard coking coal price at $229/t fob Australia on 19 July, down from $334.50/t on 19 January and close to the $235.50/t on 19 July 2023. It assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $134.87/t fob Newcastle on 19 July, up from $128.09/t on 19 January and down from $129.18/t on 19 January 2023. South32 last year dropped plans for a $700mn expansion at Dendrobium, following a dispute with NSW's water agency over its potential impact on water quality . Dendrobium, which supplies coking coal to the Whyalla steelworks in South Australia and exports from NSW's Port Kembla coal terminal, is expected to close in 2028. By Jo Clarke South32 Illawarra Coal output (mn t) Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 2023-24 2022-23 2023-24 guidance Met coal production 1.27 1.24 1.50 4.31 5.50 4.40 Met coal sales 1.36 1.05 1.53 4.17 5.40 Thermal coal production 0.21 0.16 0.25 0.63 1.02 0.60 Thermal coal sales 0.18 0.19 0.17 0.70 0.96 Total production 1.49 1.41 1.75 4.94 6.52 5.50 Source: South32 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Whitehaven hits 2023-24 coal guidance


19/07/24
19/07/24

Australia’s Whitehaven hits 2023-24 coal guidance

Sydney, 19 July (Argus) — Australian coal producer Whitehaven met its production guidance for its New South Wales (NSW) mines in the 2023-24 fiscal year to 30 June, with managed run-of-mine (ROM) output from its newly acquired Queensland mines also meeting their guidance. Saleable coal production at Whitehaven's NSW-based assets totalled 16.7mn t for 2023-24, up by 6pc on the 15.7mn t recorded last fiscal year and within its guidance for 2023-24 of 16mn-17.5mn t. Saleable output from NSW for April-June was 4.3mn t, 11pc higher than January-March's 3.87mn t and above the year earlier figure of 3.83mn t. Saleable production from Queensland totalled 4mn t, Whitehaven's first quarter since acquiring Australian-Japanese joint venture BHP Mitsubishi Alliance's 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mines on 2 April. Queensland coal sales of 3.2mn t for the quarter reflected slippage into July-September because of now resolved, transition-related rail constraints from Daunia, Whitehaven said. A selldown of around 20pc of Blackwater to global steel producers is progressing, the firm reported, without providing further details. The first production and sales have been achieved at the 10mn t/yr Vickery mine , while operations ceased during April at the 2.5mn t/yr ROM capacity Werris Creek mine. Whitehaven's overall unaudited unit cost guidance, excluding royalties, for NSW in 2023-24 was A$114/t ($76/t), above the guidance range of A$103-113/t because of lower production at Narrabri and underlying inflation. Capital expenditure was A$380mn, below the 2023-24 guidance of A$400-480mn. The Argus high-grade 6,000 kcal/kg NAR price averaged $133.46/t fob Newcastle and the 5,500 kcal/kg NAR coal price $88.47/t during April-June compared with $126.74/t and $93.85/t respectively for January-March. Whitehaven's full-year results will be published on 22 August. By Tom Major Whitehaven results Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Volumes (mn t) Managed coal production 8.3 3.9 3.8 Managed coal sales 7.3 3.8 3.9 Managed coal stocks 2.7 1.0 1.5 Coal sales revenue mix (%) Metallurgical coal 59 13 5 Thermal coal 41 87 95 Prices achieved ($/t) NSW average 137 136 177 Queensland average 180 Source: Whitehaven Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

BHP cuts 2024-25 met coal target with divestment


17/07/24
17/07/24

BHP cuts 2024-25 met coal target with divestment

Shanghai, 17 July (Argus) — Australian resources firm BHP has set a lower coking coal production target for the 2024-2025 financial year that started on 1 July, after its divestment of the Blackwater and Daunia mines. But the miner has also set its sights on increasing output from its remaining assets. The BHP Mitsubishi Alliance (BMA), which is 50pc owned by BHP and 50pc owned by Mitsubishi, has set lower production targets of 33mn-38mn t for 2024-25. The targets are reflective of the sale of its Blackwater and Daunia mines to Australian producer Whitehaven Coal that was completed on 2 April, and the impact of elevated strip ratios. The two mines together contributed 10mn t on a 100pc basis to the 2023-24 production before their divestment, the company said on 17 July. BMA met its production guidance of 43mn-45mn t by producing 44.6mn t of coal in the 2023-24 financial year to 30 June. Production fell by 22pc from a year earlier, because of an extended longwall move and geotechnical issues at Broadmeadow in the first half of the fiscal year, the disruption at its 10mn t/yr Saraji mine in Queensland , as well as increased waste removal and stockpile rebuilding after the disruption caused by wet weather and labour shortages in 2023. BHP received an average price of $271.26/t for hard coking coal and $206.84/t for weak coking coal in January-June, compared to an average of $276.22/t and $250.38/t in January-June 2023. It defines hard coking coal as those with a coke strength after reaction (CSR) of 35 and above and weak coking coal as those with a CSR of below 35. BHP expects to be in the lower half of its cost guidance for the 2024 fiscal year. Expectations of lower production volumes led BHP to increase its cost guidance for the 2024 fiscal year to $119-125/t in April from $110-116/t in January and from $95-105/t in June 2023. The firm is expecting production to increase to 43mn-45mn t/yr in the next five years, once stockpile rebuilding reaches a sustainable level and strip ratios normalise. Argus last assessed the premium hard low-volatile metallurgical coal price at $236/t fob Australia on 16 July, down from $326.70/t on 2 January. BHP metallurgical coal sales mn t Coal type Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 FY 2023-24 FY 2022-23 % Coking coal 4.86 5.41 7.45 19.52 24.31 -20 Weak coking coal 0.04 0.93 1.06 2.25 3.1 -27 Thermal coal - 0.02 0.36 0.52 1.16 -55 Total BMA 4.9 6.36 8.88 22.29 28.57 -22 Total BMA (100%) 9.81 12.72 17.75 44.59 57.14 -22 Source: BHP Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more