Coronado Resources has endured what it has called “one of the most challenging periods in the last 50 years” for the steel and metallurgical coal sectors.
The company is working to position itself to weather the current coal market conditions while ensuring it can take advantage of the recovery of the metallurgical coal market when this comes.
The global metallurgical coal market has remained subdued due to low customer demand from the economic slowdown caused by the COVID-19 pandemic.
Coronado’s saleable production of metallurgical coal dropped by 23.1 per cent to eight million tonnes for the first half of the 2020 financial year compared with the prior year.
The company’s sales volumes also decreased by 20.2 per cent to 8.3 million tonnes and revenue fell by 42.2 per cent to $713.7 million due to lower sales volume and average realised pricing.
Coronado managing director and chief executive Gerry Spindler said the effects of the COVID-19 pandemic had come at a great economic cost for the company but was confident the steel market will recovery “rapidly”.
“We have been proactive in minimising the impact of the pandemic on the health and safety of our people at our mine sites,” Spindler said.
“Looking ahead, Coronado’s overall objective is to position the company to weather the current market conditions while ensuring the business is positioned to take advantage of a recovery in the metallurgical coal market.
“We have implemented a number of strategic initiatives to preserve capital, maintain balance sheet flexibility, reduce expenditure and improve liquidity.
“We anticipate a rapid recovery in steel demand and a return of production over time, however the timing of the recovery is certain at present.”
Steel demand is improving in China due to government investment in infrastructure, with demand forecasted to remain strong, and although Indian demand is also improving, this is from a “very weak position”.
For the remainder of 2020, Coronado is aiming to meet the demands of its current customers and focus on preservation of capital, including recovery of lost production at its Curragh operations in Queensland.