A COAL mine in Central Queensland has just been mothballed despite the surge in global prices.
The Australian newspaper reported this week that the Burton coal mine, 290km north west of Rockhampton, was quietly put on care and maintenance last month
This comes in the wake of extra coal earnings for the mine's owner Peabody Energy which is expecting a $US562 million ($767m) Australian windfall from its previously loss-making mines
Peabody has confirmed the Burton mine, which was its highest-cost Australian mine producing thermal and coking coal, had closed.
"The transition of the Burton mine in Queensland's Bowen Basin into a care, maintenance and rehabilitation phase (was completed) in December 2016 following successful completion of the Thiess contractor mining contract," a Peabody spokesman said yesterday.
In August, Peabody Energy's creditors approved a plan that involved a major scaling back of production at its Australian assets and the closure of its Burton mine.
It was believed 247 jobs would be lost when the mine closed.
Thiess has reportedly refused to comment on the mine closure or job losses.
The Australian reported the St Louis-based Peabody, whose huge US domestic mines make it the world's biggest private-sector coal company, had released updated earnings forecasts for the next five years showing healthy earnings from its Australian mines, which were previously expected to lose money in 2016.
Peabody said the company's thermal and coking coalmines in Queensland and NSW were expected to deliver $US225m of earnings before interest, tax, depreciation, amortisation and restructuring costs in 2016, The Australian report said.
This is up from predictions of a $US20m loss made in August, when Peabody delivered plans to relist after debt and low prices forced it into Chapter 11 bankruptcy protection in April.
In a five-year plan endorsed by the creditors, Peabody said the metallurgical and thermal sectors were core business but it "anticipates a smaller but more profitable platform focused on high-quality products and/or top-tier assets to capitalise on higher growth in Asia''.
In Australia, Peabody forecasts that coal sales will decrease from 36 million tonnes in 2016 to 28 million in 2021 and it also intends to sell, suspend or divest non-strategic assets.
It also wants to restructure or mitigate take-or-pay agreements to improve cash flows.
"We are pleased to advance a realistic plan that recognises both the challenges and opportunities related to the company and industry," Peabody chief executive Glenn Kellow said in August.
"The business plan contemplates a reduction of metallurgical coal volumes over the five-year life of the business plan, assuming a strong Australian currency and no major uplift in product pricing.
"As described in the business plan, future plans are dependent on factors including industry conditions and the success of Project Excellence improvement initiatives.
"In addition, in the ordinary course of business, the company continues to review and optimise the asset portfolio. ''
The Australian report said while expecting to ride a coal bonanza for the next two years, Peabody has left earnings forecasts for 2018 to 2021 largely unchanged, reflecting industry views that recent surges in coal prices are due to short-term factors and will not be sustained.
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