Roof collapses at Anglo American’s coal mine in Queensland

Anglo American (LON: AAL) confirmed on Friday the collapse of a roof at its Moranbah North coking coal mine in Queensland, Australia, adding that no one was injured.

The diversified miner said the accident, which happened during a planned longwall move, was triggered by a geotechnical issue.

Coking coal markets have been particularly sensitive to supply disruptions over the past four years, and the Moranbah North outage comes as the Australian sector readies for cyclone season, when operations are often forced to close because of harsh weather conditions.

Analysts at Jefferies said while it was too early to say how long the Bowen basin-based mine would be offline, the impact could be significant.

“If we assume the mine is down for the year, this would be a ~$350m Consolidated EBITDA hit for Anglo’s 2020E results, equating to ~3.5% on our price deck and ~3% on spot prices,” they wrote.

The investment bank noted that hard coking coal prices would have to average $20 per tonne higher than its current forecast of $155 per tonne for Anglo to make up the volumes via pricing.

Moranbah North has produced more than 6 million tonnes of coking coal in each of the past two years, accounting for roughly 3% of Australia’s exports of the steelmaking material.

Anglo American, which has consistently been offloading coal operations since 2014, recently lowered its 2021 thermal coal target to 26 million tonnes from a previous goal of as much as 30 million tonnes.

The diversified miner has also cut its 2020 metallurgical coal production outlook to 21-23 metric tonnes (Mt) from 22-24 Mt, though that commodity appears to be one of Anglo’s key pillars of growth moving forward.