Bowen Coking Coal enters administration

Bowen Coking Coal (ASX: BCB) has announced it is closing its Burton mine complex and entering voluntary administration following unsuccessful capital raise attempts.

The decision was made following the rejection of the company’s most recent submission to the Queensland Revenue Office (QRO) for the short-term deferral of royalties and the inability to secure fresh capital or negotiate alternative commercial arrangements with creditors.

Bowen’s move reflects the challenging environment the Queensland coal industry is facing with higher costs, lower global coal prices and increased royalty rates introduced in 2022.

The company’s flagship Burton mine complex, located near Moranbah, encompasses multiple coal mining operations, including the Ellensfield South and Plumtree North projects, that serve a central coal handling and preparation plant.

Queensland Resources Council (QRC) chief executive Janette Hewson says operating conditions in the coal industry have become extremely challenging.

“Energy and production costs have risen significantly for coal producers while coal prices are stubbornly low and Queensland producers are paying the world’s highest coal royalty tax rates,” she said.

“The resources sector, particularly coal, is crucial to Queensland’s economic prosperity and industry continues to work with the [Queensland] Government on policies that make our state competitive and more productive, to attract and retain investment across all commodities.”

Bowen Coking Coal was hit with a creditor’s statutory demand for more than $6.8m from its mining contractor BUMA Australia in early July and was subsequently suspended from trading on the ASX as of July 15.

The company also holds the Isaac River, Hillalong, Cooroorah, Carborough and Comet Ridge coking coal development projects and is a joint venture partner with Stanmore Resources (ASX: SMR) its Lilyvale and Mackenzie projects.