PERTH (miningweekly.com) – Coal miner Bowen Coking Coal will adjust the mine plan at its Burton Complex in order to preserve capital amid tightened market and pricing conditions.

The miner said on Monday that while the initial focus at the Burton Complex had been on the Broadmeadow East pit, the Ellensfield South Pit would become an operational cornerstone in the near term and would deliver up to 2.75-million tonnes a year of run-of-mine (RoM) production, in order to take advantage of improvement in the coking coal pricing.

The company is also working with its contractor to identify opportunities to reduce the cost base further, with equipment selection and services provided under the contract.

Meanwhile, the existing mine plan at Broadmeadow East requires the relocation of a high voltage powerline that intersects the proposed mining area. The capital cost for this project has increased from A$14-million to A$20-million. As a result, Bowen is currently examining timing alternatives and entering discussions with joint venture (JV) partner Formosa.

Should the JV elect to defer the increased costs for the powerline relocation, mining operations will continue at the Broadmeadow East mine within a safe offset of the powerline and then either step around the powerline for a period of time or pause mining from the fourth quarter of the 2024 financial year, meaning Ellensfield South will maintain coal feed to Module 1 of the coal handling and preparation plant (CHPP).

Module 1 of the Burton CHPP is performing at nameplate capacity of 2.75-million tonnes a year RoM feed, allowing a deferral of the capital associated with competing Module 2 refurbishment until required.

Furthermore, a strategic review of the Bluff mine is also continuing, and discussions are being held with key stakeholders about the future operational status of the mine, given the current pricing environment.

“The reduction in sale price for a high-cost mining operation (owing to the nature of the geology) is a key consideration for Bowen in the strategic review process. It is expected that a final decision on the near-term future of Bluff operations will be made shortly,” the company said.

The coal industry has been historically characterised by price rises and falls and coal companies across the board are now taking action to weather softer pricing, tighter labour markets, and significantly increased input and operational costs,” said Bowen CEO Mark Ruston on Monday.

“Bowen will come out the other side in a stronger position. While it is disappointing that in the near term, we are curtailing our growth aspirations of five-million tonnes a year RoM, over the longer term, the company remains well placed to capitalise on the forecast growth in global steel production for which our high-quality, low ash, and low sulphur coking coal is a critical input.

“We remain focused on making the most of the company’s very promising future and delivering a return on our investments. At Burton we have considerable reserves and mine life, relatively low-cost operations, valuable infrastructure and an experienced team,” he said.