Photo by: Reuters
KALGOORLIE (miningweekly.com) – US coal major Peabody Energy on Tuesday announced that it would reduce its metallurgical coal production at its Burton mine, in Queensland, by about 1.5-million tonnes a year.
The Burton mine is Peabody's highest unit-cost operation, and production levels were not sustainable in the current market environment, the company stated.
Following negotiations with the contractor operator, production levels were expected to be reduced to around one-million tonnes a year, as the operation targeted lower-cost reserves using reduced fleets of equipment.
Peabody also lowered its Australian metallurgical coal sales targets for 2014 by one-million tonnes, to between 15-million and 16-million tonnes, with total Australian sales targets now placed at between 34-million and 36-million tonnes.
Peabody on Tuesday announced that it would also reduce its yearly average Australian cost estimate to the low $70/t range while raising third-quarter financial targets.
The company now targets third quarter adjusted earnings before interest, tax, depreciation and amortisation of $150-million to $200-million, an increase of $10-million from the target provided in July, along with an adjusted diluted loss of between $0.49 a share and $0.36 a share.
The miner said that the initiatives formed part of Peabody’s positive actions in Australia as it continued to target lower costs, which include increased productivity at the Metropolitan mine following installation of a new longwall, improved performance at New South Wales thermal coal mines, ongoing owner-operator conversions, and sustained cost and productivity improvement programmes across the platform.