Strategic shake-up for Bowen Coking Coal

Bowen Coking Coal is weighing up the future of operations at its Bluff coal mine and looking to sell its Isaac River project after an internal review. The company today revealed the outcomes of a strategic review across its portfolio, at the same time as announcing that a major new product stream had come online in the form of Ellensfield South (pictured above). Softer prices and increased costs have seen the company take a step back from its stated goal of hitting 5Mtpa ROM coal production across its Queensland operations by 2024. The company said it would concentrate on its higher-margin deposits, optimising mine plans to use established infrastructure that would enable it to preserve capital. In addition to its strategic review of the Bluff mine, the company may defer a powerline relocation at the Broadmeadow East mine and refurbishment work on the second module of the Burton CHPP. The company has also commenced a sale process for its Isaac River coking coal development project which abuts BMA's Daunia mine. Related: Isaac River Headway Puts Miner On Track For 5Mtpa Goal And it is working with its lenders as well as entering discussions with a number of potential strategic investment partners. Chief executive Mark Ruston. Bowen chief executive Mark Ruston said the company had sharpened its focus on maximising profitability and shareholder returns. “The coal industry has been historically characterised by price rises and falls and coal companies across the board are now taking action to weather softer pricing, tighter labour markets, and significantly increased input and operational costs,” he said. “Bowen will come out the other side in a stronger position. "While it is disappointing that in the near term, we are curtailing our growth aspirations of 5Mtpa ROM, over the longer term, the company remains well placed to capitalise on the forecast growth in global steel production for which our high-quality, low-ash, and low-sulphur coking coal is a critical input.” New coking coal pit comes online The first ROM coal has been mined from the new Ellensfield South pit at Bowen Coking Coal's Burton complex near Moranbah. The company said it would now be processed through the Burton CHPP for coal quality analysis and the completion of trial cargoes for end customers. While the company’s initial focus at Burton has been the Broadmeadow East pit, Ellensfield South is set to become a cornerstone in the near term - delivering up to 2.75Mt of ROM production per year to take advantage of recent improvements in coking coal pricing. Related: Bowen Coking Coal Raises $50m To Back Burton Growth In an update to the market, Bowen said it has taken steps to adjust the mine plan to maximise cash flow from Ellensfield South. It was working with mining contractor BUMA to identify opportunities to reduce the cost base further with equipment selection and services provided under the contract, the company said. High-voltage headache at Broadmeadow East Meanwhile the miner is mulling over the best options for ongoing operations at Broadmeadow East, where the existing mine plan requires the relocation of a high-voltage powerline that intersects the proposed mining area. The estimated cost of the job has increased from $14 million to $20 million. Bowen said it was in discussions with joint venture partner Formosa over the next moves there. Should the JV elect to defer the increased costs for the powerline relocation, mining operations would continue at the Broadmeadow East mine within a safe offset of the powerline and then either step around the powerline for a period of time (subject to a technical review) or pause mining from the fourth quarter of FY24. This would see Ellensfield South maintain coal feed to Module 1 of the Burton CHPP, which is performing at nameplate capacity of 2.75Mtpa ROM feed. This would also allow a deferral of the capital associated with completing Module 2 refurbishment until required, Bowen Coking Coal said. Near-term future of Bluff in doubt Meanwhile, the Bluff mine near Blackwater is the subject of a strategic review due to falling prices for PCI - the type of coal it produces. Bowen said it was discussing the future operational status of the mine with customers, contractors and other key stakeholders. "The PCI price has fallen significantly this calendar year with the resumption of Russian PCI trade flows," the company stated in an update to the market. "Commodity analysts’ forecasts are not predicting a recovery in PCI pricing in the near term. "The reduction in sale price for a high-cost mining operation (due to the nature of the geology) is a key consideration for Bowen in the strategic review process. "It is expected that a final decision on the near-term future of Bluff operations will be made shortly."

Strategic shake-up for Bowen Coking Coal

Industry Queensland

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