Peabody estimates the full-year effects of last month’s roof fall will total up to $US175 million as production is disturbed, shipments are reduced and higher costs are incurred resulting from lower production and recovery activities.
North Goonyella typically produces 200,000 to 250,000 tons per month of high quality hard coking coal.
“The roof fall blocked the main entry to the mine, at a time when production was largely halted for the completion of a longwall relocation,” Peabody said in a statement.
“There were no injuries, and the company immediately contacted relevant agencies to secure re-entry to the mine. The company subsequently worked through detailed engineering for the recovery plan, regulatory approvals, discussions with customers and related force majeure notices.
“Based on current estimates, production at the mine is now expected to resume in early October.”
North Goonyella shipped 2.5 million tons (2.3Mt) to steel-producing customers in 2010.
Peabody also revised its financial targets to reflect these impacts. It now targets third quarter 2011 adjusted diluted earnings per share in the range of $0.70 to $0.90 and EBITDA of $450 to $550 million, with full-year adjusted diluted earnings per share targets of $3.70 to $4.15 and full-year EBITDA of $2.125 billion to $2.325 billion.
Peabody is still expecting to mine an extra 3.9 million tons (3.54 million tonnes) of hard coking coal from North Goonyella after securing a longwall top coal caving technology licence from Chinese giant Yanzhou Coal earlier this year.
Peabody will work with Yanzhou to ensure the mine's workforce is fully trained and equipped to begin LTCC operations in the first quarter of 2013. The equipment is expected to be placed into service in late 2012.
LTCC technology improves the recoverability of coal over traditional longwall mining methods and will allow the operation to mine the full coal seam thickness of 6.5 metres versus the conventional longwall mining method of 4.2m.
Peabody Energy executive vice president and chief operating officer Eric Ford said: "Our agreement will lead to greater resource recovery, enhanced productivity and extended mine life. It also advances another avenue in our growing Chinese collaboration."
The North Goonyella mine will increase gas drainage techniques and implement improved dust abatement measures to underpin the success of the project.
Peabody has undertaken to train and up-skill its workforce over the next 12 months, with Yankuang Technology Development’s Australian subsidiary Yancoal Australia providing the LTCC technology and expertise.
Yancoal will also support Peabody Energy by providing experienced management and mining staff during extraction of North Goonyella’s longwalls 8, 9 and 10.
Peabody is the first company to sign a LTCC licensing agreement with Yanzhou, reflecting greater cooperation between the mining giants.
Yankuang Group is the parent company of Yanzhou, which is among the largest coal producers in China.
