Peabody chief executive Gregory Boyce told a conference in New York the company would also be responding to the changed conditions by seeking to increase productivity from existing operations by decreasing its reliance on contractors.
“[The] near-term view is cautious given decline in global commodity demand and pricing caused by recession in Europe, sluggish US growth and eased expansion in China,” he said.
“We are responding to macro conditions by further reducing capital spending, deferring early-stage expansion projects, reducing growth volumes and continuing to aggressively manage costs.”
The company will be reducing 2012 capital expenditure to about $US1 billion and expects to keep 2013 capex levels at or below 2012 levels.
The 3Mtpa open-cut expansion of the Wambo mine in NSW is “now outside of planning horizon”, the 3Mtpa PCI coal expansion of the Queensland based Codrilla mine has been deferred, and there will be a 12-month delay in the expansion of the Metropolitan mine in NSW.
Boyce said Peabody would still be advancing late-stage projects to completion.
The Wilpinjong mine expansion has been completed on time and on budget and has expanded Peabody’s lowest-cost Australia thermal mine capacity by 30% to 13Mtpa.
The Millennium mine expansion is near completion and would double mine capacity to 3-4Mtpa.
The Burton mine widening and extension is nearing completion and will move to new hard coal coking mining area in the third quarter.
The North Goonyella longwall top coal caving technology will add high-quality hard coking coal volumes and the Eaglefield co-development will extend mine life and add to HQHCC production.
The Middlemount permit has been received for eventual increase to 4Mtpa.
Peabody still sees Australia as being central to its expansion plans in the future.
“It supplies 60% of world’s seaborne metallurgical coal,” Boyce said.
“It has a major competitive advantage with mines close to port and ports close to high-growth markets.
“It is the largest exporter of high-CV thermal coal and Peabody’s Australian margins greater than average US peer margins.
“Australian coal assets earn valuations significantly higher than US counterparts.”
