North Goonyella not to reopen before 2H 2019

US-based coal producer Peabody Energy does not expect its North Goonyella coking coal mine in Australia's Queensland to return until next year's second half at the earliest.

Peabody is still working to fully assess the situation at North Goonyella, but has written off the value of machinery trapped in the area of the fire that closed the mine in early September. It will need to start mining a new area if the mine restarts. If this is the next panel that was planned to be mined in the north section of the mine, this could be in the second half of 2019. But if it needs to instead access southern panels, because the northern panels are inaccessible, then mining will not restart 2020 as these panels are in very early stage of development.

There is also the possibility that the mine will never be safe enough to be restarted economically and Peabody will instead close it completely.

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 workers out. Peabody declared force majeure on deliveries in early October,taking a $49.3mn charge for equipment loss from the mine in its latest quarterly report.

The current book value of North Goonyella following the charge is $284mn, including unmined panels in the north and south portions of the current seam, lower seam reserves and surface facilities, Peabody said. The mine also contains $61mn in leased equipment not within the sealed and mined out 9 north panel.

The underground fire that followed the gas leak 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.

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 8.7mn st of coking coal from Australia during January-September.

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.