Peabody is planning to ramp up its Wambo underground operations, despite the US parent company’s collapse.
Peabody seeks to realign, extend and/or relocate the approved South Wambo Underground Mine longwall panels; mine in the Woodlands Hill Seam instead of the Bowfield Seam; extend the approved duration of underground mining by seven years until 2032 and open-cut mining by three years until 2020; and increase the coal production rate from 7.5 to 9.75 million tonnes per year.
The move will ensure ongoing employment for close to 300 people at the open cut operations, and around 230 people at the underground complex.
Earlier this month Peabody filed for Chapter 11 bankruptcy in the US, in an effort to “strengthen liquidity and reduce debt amid an unprecedented industry downturn”.
It intends to use the Chapter 11 process to “reduce its overall debt level, lower fixed charges, improve operating cash flow and position the company for long-term success, while continuing to operate under the protection of the court process”.
The miner blamed the weak coal market, stating “industry pressures in recent years including a dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges” were drivers for the filing.
Peabody stated that the Wambo, Wilpinjong, Metropolitan, Burton, Coppabella, Middlemount, Millennium, Moorvale, and North Goonyella coal mines in Australia are not included in the filing, and will continue to operate as normal.
It stated that the Australian assets earned more than the prior year despite lower prices for coal.