Peabody declares force majeure on North Goonyella coal

US-based coal producer Peabody Energy has declared force majeure on deliveries of coking coal from its North Goonyella mine in Australia's Queensland, as it continues to try to bring a fire at the mine under control.

The mine has been effectively closed since 1 September, when elevated gas levels forced Peabody to stop a longwall move at the underground mine and pull its workforce out. The firm had previously advised customers that October shipments would be affected by the gas leak. The underground fire that followed at the mine later in September has made it more difficult for the firm to assess the situation and draw any conclusions about when it will be able to restart normal operations, forcing it to declare force majeure on its delivery contracts from North Goonyella. Peabody had previously said it did not expect any production from the mine for the rest of this year but this may now be extended into next year. It is unclear how much the longwall has been damaged, which had been partially moved ahead of the gas leak at the start of September.

The firm has maintained its full-year 2018 metallurgical coal sales guidance of 11mn-12mn short tons (9.98mn-10.9mn metric tonnes), citing "strong performance from other mines."

Peabody was tracking toward the high end of its coking coal sales guidance before the gas leak at North Goonyella. It shipped 5.9mn st of coking coal from Australia in January-June, up from 4.2mn st in the same period last year.

The North Goonyella mine produced 2.9mn st of premium medium-volatile, high-strength coking coal last year, contributing to Peabody's 11.7mn st of metallurgical coal exports from Australia in 2017.

Coal from the mine is shipped through the 85mn t/yr Dalrymple Bay Coal Terminal, which has limited stockpile availability and is experiencing delays because of long vessel queues.