Peabody Flags Asia as Top Destination for Prime Met Coal From Australia
October 15, 2024 - Peabody has flagged Asia as the top target destination for its new premium hard coking coal for steelmaking, produced from its Centurion project in the Bowen Basin in Queensland, Australia, the company said in a conference call in the early hours of Oct. 15, Singapore time.
Coal shipments from Queensland have their own advantage relative to those from the US East Coast or Canada's West Coast thanks to their geographical proximity to India, which is the center of demand growth, Peabody Chief Marketing Officer Malcolm Roberts said.
Apart from India, other Asian destinations on the company's radar include Japan and South Korea, Roberts said.
Two continuous miner units have been commissioned in the first half of the year, and the mine has produced its first development coal. The commissioning of the third continuous miner unit is expected in the coming weeks, with the first coal shipment anticipated by the end of the quarter, the miner said, adding that it is "on time and on budget" for full-scale longwall production in March 2026.
Peabody has forecast an average saleable volume of 4.7 million short tons per year for the Centurion coal, with an expected cost of $105/st over the mine's life of more than 25 years.
Saleable output of Centurion is expected to reach 100,000 st in 2024, 500,000 st in 2025 and an average volume of 4.7 million st in 2028, the company said.
With volatile matters on an air-dry basis at 23%-24%, typically at 23.5%, the Centurion coal is classified by Peabody as premium low volatile hard coking coal. Other key specifications include 68% CSR, 8.5% ash on an air-dry basis and 0.5% sulfur on an air-dry basis.
The underground Centurion project consists of the Centurion South and Centurion North panels, with a total reserve of about 141 million st.
The company reached an agreement to acquire a large portion of the Wards Well coal deposit adjacent to the existing North Goonyella Mine in October 2023, and it was announced that it would be renamed to Centurion Mine on Dec. 19.
The mine is located in the Moranbah North Measures, north of BHP's Goonyella and Riverside mines, as well as Anglo American's Moranbah North and Grosvenor sites.
The project has a dedicated rail loop connected to the Goonyella rail system, allowing trains to travel 217 km to Dalrymple Bay Coal Terminal.
Portfolio Repositioned
With an annual saleable production volume expected to reach 4.7 million st, the Centurion project will position Peabody among the major suppliers of Australian premium hard coking coal, trailing BHP, Anglo American, Glencore and M Resources.
"We anticipate demand for premium hard coking coals to grow significantly," Roberts said in a separate press release Oct. 11. "While demand for this product continues to grow, new projects are increasingly rare, making Centurion's product highly sought after."
The US-based miner currently operates assets in the Bowen Basin and Helensburgh in New South Wales, producing pulverized coal injection with its flagship product known as Coppabella, as well as lower-ranked steelmaking coal products, including Metropolitan and Middle Mount hard coking coal. Meanwhile, the company produces high volatile coal from its Shoal Creek mine in Alabama, US.
PCI products accounted for 60% of its metallurgical coal sales in 2023, but that figure is projected to decline to 30%, while the contribution from premium hard coking coal is expected to increase to 34% by 2026.
Centurion will reposition its metallurgical coal portfolio toward higher-quality premium met coal, the company said.
As of Sept. 30, Peabody has completed approximately $250 million of the anticipated $489 million in initial development capital needed to achieve longwall production in March 2026, it said.
Peabody sold 3.4 million st of seaborne metallurgical coal in the first six months of 2024, up 3% on the year, the latest company data showed. The company's total seaborne metallurgical coal sales reached 6.9 million st in 2023, up 4.5% from 2022.