Aussie sees production disruption abating

Yancoal

Though ocean temperatures have warmed in recent weeks, atmospheric indicators are largely unchanged and remain at La Niña levels. La Niña typically increases the chance of above average rainfall for northern and eastern Australia during summer.

Australian thermal and coking coal miners have reported disruptions in production mainly due to inclement weather conditions.

“In Queensland, coal production was again impacted by heavy rainfall. As foreshadowed, we are seeing the impact of inflation across our global supply chains and continue to focus on productivity and controllable costs,” BHP Chief Executive Officer, Mike Henry, said.

Coal Insights Bureau

The prospect for better weather conditions should allow Australian coal miners to deliver improved output in 2023 as the peak of the La Niña weather pattern appears to have passed, and operations can continue with a structured recovery process, believe the miners.

“Water storage levels remain at elevated levels across the mines in NSW, so the recovery plans are not without risk, but the production losses caused by heavy rain events in 4Q and earlier in 2022, ideally, will not recur. Labour shortages remain an issue for the sector, and Yancoal has implemented initiatives to mitigate this factor,” Australian coal miner Yancoal has said.

In the coming months, Yancoal will prioritise rebuilding inventory levels in advance of coal mining in order to facilitate increased saleable coal production in later periods. This inventory rebuild refers to overburden, drill and blast, exposed coal and ROM coal stockpiles.

“These activities were often curtailed during the La Niña cycles to maintain output during a period of record coal prices. Overburden removal needs to be prioritised to return the mines to optimal mining efficiency. It will likely take several consecutive quarters of uninterrupted mining to return the mines to previous production levels and optimum unit cost profiles,” the company said.

As per a recent update by Australian Meteorology department, La Niña continues in the tropical Pacific, but has weakened from its peak in spring 2022.

Energy coal from New South Wales grew 9 percent to 2.9 percent over September quarter.

Met coal production at 7 million tons during the December quarter was up 4 percent over September quarter.

Met coal production was higher due to improved strip ratios and the planned longwall move at Broadmeadow in the prior period, partially offset by continued significant wet weather.

Thermal coal production grew at a significangtly higher rate of 9 percent at 2.9 mt compared during the December quarter over September quarter due to improved operating conditions, including less significant wet weather impacts and reduced labour shortages in the December 2022 quarter, partially offset by planned wash plant maintenance completed in November 2022.