Plummeting coal price squeezes Qld mine buy

afr.com:

Falling prices for steel-making coal has forced Bowen Coking Coal to rethink the future of a mine it bought only two years ago.

The Brisbane-based miner on Monday confirmed its Bluff mine in central Queensland is undergoing a strategic review, and it is talking with customers and contractors “about the future operational status of the mine in the current pricing environment”.

Russian steel-making coal is finding a market in China and India despite sanctions and putting pressure on prices. Bloomberg

“The PCI [pulverised coal injection] price has fallen significantly this calendar year with the resumption of Russian PCI trade flows,” Bowen said on Monday.

“Commodity analysts’ forecasts are not predicting a recovery in PCI pricing in the near term.

“The reduction in sale price for a high-cost mining operation (due to the nature of the geology) is a key consideration for Bowen in the strategic review process. It is expected that a final decision on the near-term future of Bluff operations will be made shortly.”

Mines can be been offloaded or mothballed should they become uneconomic enterprises, and Bowen’s chairman Nick Jorss said all options were on the table.

Despite his company acquiring the mine only in December 2021 and mining coal since June last year, Mr Jorss maintained the strategic rationale behind the acquisition remained sound. That included demand for steel being projected to grow, he said. “These are valuable assets in the right market,” he told The Australian Financial Review.

Still, even in its latest quarterly updates, Bowen said it had not achieved target production rates.

PCI prices have, according to Queensland budget papers, dropped from $US310 a tonne in the 2022 financial year to $US265 a tonne in the