Collapsed roof halts Anglo coal mine

A collapsed roof has halted production at Anglo American’s Moranbah North mine in Queensland, which accounts for about 3% of Australia’s coking coal exports.
Collapsed roof halts Anglo coal mine Collapsed roof halts Anglo coal mine Collapsed roof halts Anglo coal mine Collapsed roof halts Anglo coal mine Collapsed roof halts Anglo coal mine

Anglo American's Moranbah Grosvenor wash plant in the Bowen basin, Queensland, Australia

Staff reporter

Anglo confirmed no one was injured in the accident, which happened during a planned longwall move. The company said the collapse was triggered by a geotechnical issue.

Analysts at Jefferies said while it was too early to say how long the mine, located in the Bowen Basin, would be offline, "if we assume the mine is down for the year, this would be a circa US$350 million consolidated EBITDA hit for Anglo's 2020E results, equating to circa 3.5% on our price deck and circa 3% on spot prices".

Jefferies said hard coking coal prices would have to average $20/t higher than its current forecast of $155/t for Anglo to make up the volumes via pricing.

However, the bank said "we would expect some consequential tightness in the met coal market to lead to higher prices after coronavirus fears subside and partially offset the negative impact on Anglo's cash flows from this mine collapse".

Moranbah North accounts for more than a quarter of Anglo's met coal production.

Jefferies said while the Moranbah news was "a clear negative, Anglo continues to be one of our top picks in mining over a 6-12 month horizon".

"This is due to its organic growth in copper, its exposure to PGMs, a potential recovery in the diamond business from a very weak 2019, its high quality iron ore production, and its inexpensive valuation on conventional metrics," said the bank.