Australia’s major miners have released their Q1 FY23 (July-September) results and the overall production of coking coal for the quarter has recorded a considerable fall. Issues such as weather-related supply disruptions coupled with labour shortage have adversely impacted companies’ production during the period.
Major miner BMA (BHP Mitsubishi Alliance) saw coking coal production fall by 19% q-o-q to 13 mnt in July-September 2022.
Another key miner, Whitehaven Coal’s production went down by 37% q-o-q to 4 mnt in Q1FY23 and South 32 results show a drop of 8% q-o-q in its coking coal production at 1.27 mnt.
However, only one miner, Coronado, recorded an increase in its coking coal production, as its met coal production increased by 29% q-o-q to 3.4 mnt. This came as the company took over the management and operation of four mining fleets at its Curragh coal mine in Queensland, thereby improving its operational efficiency.
Amid this production drop, the quarterly average of Australian coking coal prices rose by 25% ($63/t) q-o-q and are currently assessed at $312/t, FOB Haypoint whereas exports of the material came down by 9% to 36.7 mnt in the July-September quarter.
Lowered production guidance for next quarter
Amid the ongoing supply disruptions, miners have cut down on their output for the October-December 2022 quarter also.
South 32 has reduced its coking coal production guidance by 5% at Illawarra Metallurgical Coal to 7 mnt, following an extended Longwall move and the impact of industrial action at Appin mine during the September 2022 quarter.
Coronado has revised production guidance to 16.9-17.1 mnt from 18-19 mnt due to the wet weather.
Glencore reduced coal production guidance by 9% due to severe flooding in New South Wales and the subsequent delay in restoring mine production and logistic infrastructure.
Whitehaven and Yancoal have not changed their production guidance, but Australia’s biggest miner, BMA’s production is likely to get adversely impacted in the ongoing quarter as the workers there have voted to strike over issues related to working conditions and job security.
Outlook
While the October-December quarter is likely to be no-so-buoyant for Australian coal production, the January-March quarter is expected to be a bit better on expectations of reduced rainfall in the mining regions.
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