INTERNATIONAL COAL NEWS

Broadmeadow convergence drags down BHP met coal production

BHP Billiton's metallurgical coal production for the December 2015 half year decreased by 3% to 2...

Lou Caruana

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BHP Billiton’s Queensland Coal production declined in the December 2015 half year as record production at the Blackwater, Daunia, Caval Ridge and South Walker Creek mines was offset by the convergence event at Broadmeadow.

BHP said the incident did not involve a cave-in.

A spokesperson for BHP told ICN: “The structural integrity of the longwall remains intact. The definition we are using is ‘convergence’ – which is the result of strata above the roof of the longwall shifting and causing the roof to exert pressure on some of the longwall shields and impact a part of the longwall face.

“There was no emergency evacuation, operational procedures worked effectively, the area at risk was secured safely.”

BHP Billiton Mitsubishi Alliance Asset President Rag Udd said BMA’s team onsite at Broadmeadow had done a “very safe and professional job in managing the recovery of the longwall”

Broadmeadow has since resumed normal operations.

After the completion of longwall mining at the Crinum mine, it will transition into care and maintenance in the March 2016 quarter.

BHP Billiton CEO Andrew Mackenzie said: “Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector.

“We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business.

“In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term.”

BHP’s Energy coal production for the December 2015 half year decreased by 3% to 19Mt.

Guidance for the 2016 financial year remains unchanged at 40Mt.

Lower production for the December 2015 half year reflected continued drought conditions at Cerrejón and the impact of heavy rainfall at New South Wales Energy Coal. A 16% increase in Navajo Coal volumes due to higher customer demand was offset by lower customer requirements for BHP’s San Juan product.

On 2 July 2015, BHP Billiton announced that the sale agreement for the San Juan Mine to Westmoreland Coal Company (WCC) had been executed. Regulatory approval has been received and the transaction is now expected to be completed in the March 2016 quarter, following agreement with both parties to ensure all closing conditions are met.

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