High rainfall has hammered Curragh coal operations near Blackwater, causing owner Coronado Global Resources to reduce production forecasts as it prepares to park up a mining fleet.

Announcing the move today, the company highlighted that ‘extreme royalties in Queensland’ had affected the industry’s ability to cope with volatility.

Rainfall levels in August reached more than three times the 10-year monthly average for the Curragh area.

This delayed pre-strip activities, and the need for mechanical repairs to the site’s overland conveyor also impacted production.

And with the Australian Bureau of Meteorology anticipating a La Nina weather pattern, Coronado is assuming above-mean rainfall levels for the remainder of the year.

In response, the company plans to temporarily idle an additional fleet at the Curragh complex in October to reduce costs.

The fleet expected to be idled consists of a company-owned shovel, a fleet of T282 trucks and ancillary equipment totaling 14 pieces of equipment that it said would be less productive and cost-effective when operating in elevated rainfall periods.

Coronado has revised its market guidance for group production in FY24 to 15.4 – 16.0 million tonnes (previously 16.4 – 17.2 million tonnes).

“As our Curragh Complex enters a period of expected adverse weather impacts in Queensland, we have decided to temporarily idle an additional fleet to make the business unit more resilient to higher costs associated with poorer mining conditions in wet periods, short-term expected lower market pricing due to an oversupply of steel in the market, persistent industry inflation; and elevated cost structures imposed on our industry by the ongoing extreme Queensland royalties,” Coronado managing director and chief executive officer Douglas Thompson said.

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“The extreme royalties in Queensland have in large part removed the industry’s resilience to the volatility of the natural market commodity cycles.

“As a result, Coronado will plan its mines in Queensland to be more market agile and the steps to temporarily idle an additional fleet are aligned with this plan.

“Coronado is fortunate to have our U.S. business unit as a balancing influence on the exposure to the Queensland royalties; and we continue to progress with our expansion plans at Buchanan.”

Mr Thompson said Coronado remained committed to its Curragh complex and the new Mammoth underground project, as these significant metallurgical coal assets presented substantial long-term value to shareholders.

“However, the significant cost imposition placed on all Queensland coal miners from the higher royalties is making these types of investments less competitive.”

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