More Australian Mines to Close as Coking Coal Woes Deepen

Author: Paul Ploumis29 Apr 2014 Last updated at 08:36:09 GMT

CANBERRA (Scrap Monster): Due to the dramatic fall in quarterly contract of coking coal price, Coal Giant Peabody Energy decided to shut down some of the Australian mines. According to Credit Suisse analysts, the June quarter price for coking coal had fallen to $US120 per tonne from $US143 per tonne, which was close to the typical cash costs for the coking coal industry of east coast. This indicated that when factors like sustaining capital, financing and corporate were added in, most of producers would lose money.

In order to stay profitable, Peabody Energy, the St Louis-based company has already cut down jobs and closed some mines recently. The Coking coal from Queensland, the nation’s second largest export earner was about $22.4 billion of export revenue last financial year. Thermal coals which were primarily used in power stations from NSW climbed $16.1 billion. Due to more exports from US and Australia Contract, coal prices has fallen steadily which was peaked at $US330/t in the late 2011.

Most of the Australian miners had been on a campaign for a year in order to cut cost. There might not be more that can save the mines from losing money.