Peabody aims to balance out Australian operations

: Coal, Coking coal
14/08/05

Sydney, 5 August (Argus) — US producer Peabody Energy will slash production at its Burton coking coal mine in Queensland by more than half, as it attempts to cut costs and bring its struggling Australian business into line with its higher margin US operations.

Peabody will cut coking coal production at Burton by 1.5mn t/yr to 1mn t/yr, because the high cost operations are unsustainable at current prices. This will contribute to Peabody cutting its total coking coal sales target from Australia to 15mn t in 2014 from 16mn t. But the company has offset this with higher thermal coal sales, pushing its total sales target out of Australia to 36mn t from 34mn t in 2014.

The closure of Burton has also helped Peabody to cut its Australian cost estimate to $70/t across its coking and thermal coal production, raising its global earnings before tax, interest and depreciation target to $200mn from $150mn for 2014.

Thermal coal prices for high-grade 6,000 kcal/kg material have fallen from around $80/t fob Newcastle six months ago to below $70/t fob. Prices for 5,500 kcal/kg coal have fallen from around $66/t fob to $56/t fob during the same period. Premium hard coking coal prices have stayed at around $110/t fob Australia for the past four months, having been as high as $150/t fob last September.

Peabody has struggled to get an adequate return from its Australian operations and has had some mines up for sale for over a year but has not found a suitable buyer. The sale of its 1.5mn t/yr Wilkie Creek mine to mining entrepreneur Nathan Tinkler fell through and the firm appears increasingly desperate to resolve its problems in Australia and to extract itself from expensive take-or-pay contracts with infrastructure providers.

It is unclear how Peabody will manage to cut shipments from Burton without incurring high penalties on rail and port contracts, but it may have agreed to ship extra thermal coal in exchange for reduced shipments from Burton.

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25/12/17

Viewpoint: Dry weather to ease Australia's coal queues

Sydney, 17 December (Argus) — Dry weather and minimal maintenance over January-March 2026 could support coal deliveries to Australia's Newcastle port, as well as exports from the thermal coal hub, which would help it recover from severe disruptions that took place during May–September. Newcastle has a 57pc chance of receiving 339–450mm of rain over the first three months of 2026, slightly above its historical median of 338.5mm but still below levels likely to cause port-side or rail disruptions, data from the Australian Bureau of Meteorology (BoM) show. The coastal city received approximately 517mm of rain during May–July this year, data from BoM show, during which Newcastle port implemented multiple rounds of vessel movement restrictions. The weather challenges pushed up the average vessel queue at the Port Waratah Coal Services (PWCS) up to 60 ships in July, from 41 vessels a year earlier. PWCS has partly cleared its ship queue since, but it still hovered at 36 vessels in November, up from just 11 vessels a year earlier. Demand in January-March Weaker demand during the first quarter of 2026 could help ease vessel congestion at Newcastle port's coal terminals. Exports to key markets in northeast Asia including Japan, China and South Korea typically decrease in the first quarter, after the peak winter season. La Nina weather conditions in Japan are expected to weaken in the second half of winter, according to the Japan Weather Association (JWA). The country faced a severe cold season in February this year, but the JWA predicts an arrival of spring-like conditions in February 2026. This could ease demand for coal exports to Japan during that period. But weaker demand could put pressure on coal producers if prices fall steeply next year. Newcastle high-calorific value (CV) NAR 6,000 kcal/kg coal prices trended downwards from February-April after the winter season in Japan, reaching its lowest level of $91.71/t fob Newcastle at the end of April. High-CV NAR 6,000 kcal/kg coal is usually exported to Japan and Taiwan, while China mainly imports high-ash NAR 5,500 kcal/kg coal from Australia. If the premium between NAR 6,000 kcal/kg and high-ash coal tapers, producers are likely to maximise profits by selling more coal to China. Chinese utilities usually buy Australian coal to take advantage of the price arbitrage compared with domestic Chinese coal supplies delivered from north China ports. But the price of domestic coal in China was volatile from November 2024-January 2025, owing to safety inspections at major coal mines in the country. Thermal coal exports out of Australia averaged 15.4mn t/month in the first quarter of 2025, according to customs data, which is consistent with averages recorded in the first quarters of 2023-25. But this is lower than the yearly average of 16.8mn-17.3mn t/month during 2023-25. Movements to port Producers are also likely to face fewer rail disruptions over the first quarter of next year. Australian state-owned rail operator the Australian Rail Track (ARTC) has just a single maintenance shutdown planned over the period. It will close its Hunter Valley coal lines — which link New South Wales mines to the port — for 72 hours in February (see table) . ARTC conducted four rounds of major maintenance over July–November this year, pushing down deliveries to PWCS' terminals at Newcastle port. Producers sent 87mn t of coal to the terminals in January-November, down by 4.4pc on the year, data from PWCS show. By Avinash Govind and Nadhir Mokhtar ARTC track maintenance Date Lines Length of Time (hrs) 10-13 February Warabrook/Kooragang to Muswellbrook 72 10-13 February Muswellbrook to Ulan 72 10-13 February Muswellbrook to Turrawan 72 30 March-2 April Warabrook / Kooragang to Muswellbrook 48 30 March-2 April Muswellbrook to Ulan 72 30 March-2 April Muswellbrook to Turrawan 72 16–19 May Warabrook/Kooragang to Muswellbrook 72 16–19 May Muswellbrook to Ulan 72 16–19 May Muswellbrook to Turrawan 72 16–19 May Islington Junction to Port Waratah 48 16–19 May Islington Junction to Telarah 72 21-24 July Warabrook / Kooragang to Muswellbrook 72 21-24 July Muswellbrook to Ulan 72 21-24 July Muswellbrook to Turrawan 72 22-25 September Warabrook / Kooragang to Muswellbrook 72 22-25 September Muswellbrook to Ulan 72 22-25 September Muswellbrook to Turrawan 72 17-20 November Warabrook / Kooragang to Muswellbrook 72 17-20 November Muswellbrook to Ulan 72 17-20 November Muswellbrook to Turrawan 72 Source: Australian Rail Track Corportation (ARTC) Australia coal prices 2023-2025 $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia coal, Fe prices to fall; LNG up: Treasury

25/12/17

Australia coal, Fe prices to fall; LNG up: Treasury

Sydney, 17 December (Argus) — Australian iron ore, coking coal, and thermal coal prices are expected to decline by the end of December 2026, while LNG prices may rise from current levels, according to Treasury forecasts released on 17 December. Australian commodity prices are expected to return to long-run fundamental levels, Treasury said in its Mid-Year Fiscal and Economic Outlook for the 2025-26 financial year ending 30 June. Thermal Coal Australia's thermal coal prices have been supported by ex-China demand since Treasury released its July 2025-June 2026 budget on 25 March, Treasury said. But it does not expect this trend to continue. Treasury forecasts Australian thermal coal spot prices will fall to $70/t on a fob basis by the end of December 2026, down from current levels. Argus ' Australian NAR 6,000 kcal/kg fob Newcastle price was last assessed at $108.46/t on 16 December, up from $95.62/t on 25 March. Australian thermal coal exports to China fell 11pc on the year in January-October ( see table ), while shipments to Japan, South Korea, Vietnam, and Malaysia rose, data from the Australian Bureau of Statistics show. Steelmaking Inputs Chinese economic policy support has lifted iron ore and metallurgical coal prices since March, Treasury said. But it expects Australian iron ore and coking coal spot prices to fall to $60/t and $140/t fob, respectively, by the end of 2026. Argus ' metallurgical coal premium hard low-volatile fob Australia price was last assessed at $215.10/t on 16 December, while its iron ore fines 61pc Fe (ICX) fob Australia netback price was last assessed at $90.55/t. Treasury also expects mining investment to remain unchanged over the next two years, largely because of the iron ore and coking coal sectors. Iron ore producers may invest in projects to maintain production, but coking coal producers are expected to run down their capital stock, Treasury said. Producers are looking to sell or finance around six Queensland coking coal mines, a market participant told Argus on 2 December. Petroleum LNG prices have declined since March because of China's shift toward non-Australian gas, Treasury said. Australian LNG spot prices are expected to reach $10/mm Btu by the end of December 2026, according to Treasury forecasts. Argus ' Gladstone fob price — an LNG netback indicator — was last assessed at $9.01/mm Btu on 16 December, down from $12.90/mm Btu on 25 March. China plans to prioritise pipeline and domestic gas over LNG imports in the coming years, PetroChina International's global head of LNG Yaoyu Zhang said on 4 December. Treasury also expects global oil prices to hover around $66/bl over the next four years, down from its March estimate of $81/bl. Australia's government will raise less revenue from its petroleum resource rent tax than previously expected because of the downgrade, the agency added. The tax is forecast to generate A$1.5bn in 2025-26, down from the earlier estimate of A$1.95bn. By Avinash Govind Treasury Commodity Forecasts (Mid-Year Economic and Fiscal Outlook) $ Commodity Argus Price (most recent)* Forecasted Price* Change (%) Coking Coal 215.1/t 140/t -35.0 Thermal Coal 95.62/t 70/t -26.8 Iron Ore 90.55/t 60/t -33.7 LNG 9.01/mm Btu 10/mm Btu 11.0 * Argus' Australian NAR 6,000 kcal/kg fob Newcastle; metallurgical coal premium hard low-volatile fob Australia; Argus' Gladstone fob; Iron ore fines 61pc Fe (ICX) fob Australia netback * fob Australia basis, at end of December 2026 Argus, Commonwealth of Australia Australian thermal coal exports mn t Market Jan - Oct '25 Jan - Oct '24 YTD Change (%) China 53 60 -11 India 2.9 3.4 -16 Japan 59 59 0.5 South Korea 11 9.7 12 Vietnam 13 9.6 37 Malaysia 5.9 5.4 11 Australian Bureau of Statistics Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US House clears hurdle to pass permitting bill

25/12/16

US House clears hurdle to pass permitting bill

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Canadian authorities approve Anglo, Teck mining merger

25/12/16

Canadian authorities approve Anglo, Teck mining merger

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Japan’s energy demand falls on economic slowdown

25/12/12

Japan’s energy demand falls on economic slowdown

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