Anglo American halted output in parts of its Moranbah North coking coal mine in Queensland, Australia on Friday, when a roof collapsed.
The miner confirmed that there were no injuries as a result of the accident, which was triggered by a geotechnical issue during a planned relocation process, referred to in the industry as a longwall operation. Production halts have been limited to the areas of the mine where the accident took place, the company stated.
Additionally, Anglo American indicated that it was too early to estimate the full impact of the incident on its production as well as the length of time the mine would be down. According to the company, the repairing costs may be substantial, and the loss of production could offer support for coking coal prices.
If the mine is paused for a year, the company projects its 2020 full year financials could suffer a $350mn loss, a drop of 3-3.5pc on prices.
The coking coal market has been exposed to supply interruptions during the past four years, and this stoppage occurs as the Australian region is entering cyclone season, when weather conditions often cause operations to close.
The Moranbah North mine produced over 6mn mt of coking coal for the past two years. At that level the mine accounts for around 3pc of Australia’s coking coal exports. Anglo American has been operating in Australia since 2000, producing coking coal at five locations central to Queensland’s Bowen Basin.
The miner has been reducing its coal operations since 2014 and has considered selling its assets in response to falling prices. Its 2021 thermal coal target of 26mn mt is down from prior targets of up to 30mn mt. The company also reduced its 2020 metallurgical target for coal production to 21-23mt from 22-24mt.