Bowen Coking Coal warns that it may need to temporarily pause part or all of its operations until coal markets pull out of the doldrums.

That is despite shaving production costs at its Burton complex near Moranbah in the Bowen Basin over the past year and achieving full-year 2025 ROM coal production and coal sales guidance with one month of the year remaining.

The devil is in the detail revealed in the company’s latest ASX update. The metallurgical coal sector has experienced price reductions that have effectively removed about $68/t ($US45/t) of operating margin from its business since June last year.

“Given the status of depressed coal markets, combined with the unsustainable Queensland State coal royalty regime, earnings for producers in the industry, including Bowen, remain under extreme pressure,” the company said in today’s update to the market.

“In addition, some producers are also facing liquidity challenges, of which Bowen is one. As a result, Bowen has been engaged in discussions with multiple parties to secure funding to support ongoing operations during this period of depressed coal prices and ongoing royalty pressures.”

Related: Bowen Coking Coal moves to owner-operator model

The company recently announced plans to shift to an owner-operator model at its Burton coal complex at the end of the month, when its contract mining services agreement with BUMA Australia expires.

It said today that the move had received an extremely positive response from the workforce and suppliers.

The transition to owner-operator status was expected to deliver significant operational efficiencies and long-term cost benefits, the company said.

However, in the near term, there will be impacts on the company’s working capital.

Bowen Coking Coal said securing additional funding would provide liquidity and financial flexibility, safeguarding business continuity while it executed its strategic transition and navigated the current market conditions.

It warned: “There is no guarantee that additional funding will be secured in order to maintain the operating business, in which case Bowen may need to consider temporarily pausing part or all of its operations until markets return.”

In metallurgical coal markets, the Platts Australia PLV index has recently fallen to a spot price of $US175/t (down 25 per cent since June 2024).

In the same period, API5, 5500Kcal thermal coal has fallen to a spot price of $US66/t (also a drop of 25 per cent).

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