Market slump shifts coal miner focus

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 08 Jul 2013   Posted by admin


QUEENSLAND thermal coal miner New Hope has scaled back production and initiated job cuts at its Jeebropilly open cut mine, in what economists have interpreted as a further indication of the deteriorating nature of Australia’s coal
industry.
The latest casualty of the market slump, the Jeebropilly thermal coal mine in Amberley, Queensland, is undergoing what New Hope terms “strategic downsizing” in response to the extenuating high costs of the current market conditions, compounded by the current weakness of commodity prices.
The move was announced by the company in a recent quarterly activities report, stating that since April, Jeebropilly in which it had operated five days per week instead of six as a direct strategy to reduce costs. New Hope justified the move by reasoning that the open cut mine, lying some 50km southwest of Brisbane, was significantly more expensive to run than its other Queensland-based mines.
“Management continues to pursue prudent cost reduction initiatives across all operating sites due to the current difficult market conditions,” New Hope stated in the report.
Erratic weather in Queensland across early 2013 was also cited as a reason for the downsizing, as heavy rains and rail outages caused a build up of coal stocks.
“During the quarter, further production shutdowns were implemented to manage high levels of coal stocks which developed following heavy rainfall and rail outages in January and February,” the report stated. New Hope closed another of its mines in January this year, Jeebropilly’s sister mine Oakleigh. The closure was originally planned for 2009 after some 60 years of production; however, it was delayed until 2013 as the temporary resurgence in coal prices convinced the company to extend the mine’s operating life.
The cumulative effect of the company’s moderating activities on these two mines, is expected to see output from its Moreton Basin region operations reduced to about 0.7 million tonnes a year, compared to 1.1mt previously.
Though mining efforts will remain unchanged at its thermal coal open cut mines at Acland on the Darling Downs, the company has reported plans to shift focus from coal to oil and gas, because of the ongoing depressed nature of the coal market.