The mining house reported that its share of export thermal coal production across its typically joint venture-based mines was 12.5Mt for the recent quarter – up 6% from the 11.8Mt in the corresponding period for 2014.
Glencore’s semi-soft coking coal output reached 1Mt, up 100,000 tonnes from the March quarter of 2014 while its coking coal production remained the same at 1.5Mt.
The company’s small domestic thermal coal output plunged by 43% to 800,000t in the recent quarter.
The solid production results came despite double-digit falls in Q1 prices.
This included a 17% YoY fall to an average realised export coking coal price of $US112 per tonne, a 19% decline to an average semi-soft coal price of $84/t and a 15% slide to Glencore’s average export thermal coal price of $66/t.
In late February Glencore announced a plan to cut its Australian coal exports by 15Mt for 2015. Its Australian export coal production totalled 15Mt for the March quarter – indicating that considerable cutbacks are on the horizon if Glencore was still keen to implement them.
So far Glencore’s cutbacks have only impacted its New South Wales sites. These have included the late March announcement to bring forward the shutdown of the West Wallsend longwall mine to mid-2016, and its production, job and roster cutting changes at Ulan West which are estimated to have reduced 2Mt of annual production capacity.
There is also news of planned cuts that loom for the Mt Owen coal mine (operated by Thiess).
Analysts have expressed scepticism that Glencore’s 15Mtpa production cutting target was made to help land annual thermal coal export contracts to Japanese utilities at a price of at least $70/t.
However, Rio Tinto ended up uncharacteristically setting this Japanese benchmark instead of Glencore with a settlement of $67.8/t, which was still well above Newcastle spot prices at the time.
Glencore’s global coal production for the March quarter totalled 35.6Mt which included 8.4Mt of output in Colombia and 11.4Mt in South Africa (50:50 export and domestic).
Glencore’s 100% owned coal mines in Australia include the Ravensworth open cut operation (not Ravensworth Underground), plus the Mangoola and Mt Owen open cuts and the Tahmoor longwall mine. All of these wholly owned mines are in New South Wales.
