MINES

Metropolitan outburst incident and longwall cost Peabody $US9.4M

The Australian met coal segment reported EBITDA of US$109.6 million.

Lou Caruana
Peabody Energy's Metropolitan colliery in NSW.

Peabody Energy's Metropolitan colliery in NSW.

The Australian met coal segment reported EBITDA of US$109.6 million, according to a company filing with the US Securities Exchange Commission.

Lower production at the Metropolitan mine due to both an unexpected gas outburst and the beginning of a planned, extended longwall cost the company $9.4 million.

The company also reported higher costs due to geological issues and wet weather at two of its surface operations which cost the company $10 million.

The gas outburst incident, which occurred on January 4 on the longwall face, resulted in the release of carbon dioxide and a significant amount of coal, which obstructed passage across the face.

No people were injured as a result of this incident.

A prohibition notice and scene preservation notice have been issued in relation to the incident to prevent further production from the longwall.

As well as its own review of risk control measures, the mine operator has been required to engage an independent consultant to review the adequacy of the mine outburst management plan and the mine’s operating procedures, and then report to the regulator.

The incident followed a low-energy gas outburst on the longwall at the mine on December 24 where there was little evidence of ejected material from the face.

Peabody is now keeping Metropolitan and its associated 16.67% interest in Port Kembla Coal Terminal in NSW after the competition watchdog failed to give clearance for South32 to proceed with its acquisition.

South32 terminated the US$200 million purchase contract to buy Metropolitan after it was unable to obtain approval from the Australian Competition and Consumer Commission within the timeframe required under the contract. 

On February 23, the ACCC issued a Statement of Issues, concerned the proposed acquisition might substantially reduce competition in the supply of metallurgical coal to Australian steelmakers.

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A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

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