The story of Stanmore’s success

Attendees at the Bowen Basin Mining Club’s May luncheon were given an in-depth presentation on how Stanmore Resources has gone from a relatively unknown player to one of the largest global metallurgical coal producers.

Company director and CEO Marcelo Matos said Stanmore was going through a notable transformation with the execution of “some massive changes”, including purchasing BMC’s assets in the Bowen Basin as it aims to build a leading metallurgical coal powerhouse. 

“From the acquisition of mothballed Isaac Plains in 2015 for just $1 to expansion of the Isaac Plains and Isaac Downs mines, the purchase of a 50 per cent interest in the Millennium/Mavis Downs lease, and the just-completed $1.2 billion acquisition of 80 per cent interest in BMC, the timing of Stanmore’s purchases has been immaculate,” he said.  

“We signed the Millennium deal in April 2021 when hard coking coal prices were just north of US$100/t, completed the deal in July with prices around US$150/t, and sold first cargo in December 2021 when prices were north of US$400/t. We experienced a similar situation with the BMC acquisition with prices now north of US$500/t. 

“We are now one of the largest global producers of metallurgical coal, and we will be watched closer going forward. We are now running four mines within a 50 kilometre radius, targeting 5.9-6.5 million tonnes per annum of coal in the second half of the year as per recent guidance, equivalent to an annualised rate close to 13 million tonnes.” 

Marcelo Matos and BBMC director Jodie Currie at the event.

In addition to its metallurgical coal operations, Stanmore is also now one of the world’s largest individual PCI producers, well-placed in a global market facing tight supply and Russia sanctions.   

“Steel demand and production in India and Southeast Asia are still growing,” Matos said.

“Despite the uncertainties imposed by the inflationary pressure we see worldwide and the potential impact on the global economy and growth, supply is extremely tight now and will not ease for a while as there is less investment in new coal projects.

“The transition to net zero carbon will demand a lot of steel for electric vehicles, wind turbine blades. High-quality metallurgical coal will continue to be highly demanded, with high thermal coal prices also acting as supporting floor for met coal.

“PCI coal also represent an interesting value proposition to steel makers economically, as well from an emissions standpoint. With Russian PCIs under strict sanctions, markets like North Asia and Europe which are the most affected are naturally being replaced with Australian PCI.

“This means PCI prices are at historical peaks and close to premium hard coking coal prices. It’s an interesting market to be in.

Matos also covered the significant size of Stanmore’s operations, which now comprise more than 600 employees and 700 active suppliers, plus a fleet that includes three coal processing plants, three draglines, 26 dozers, eight excavators and 29 haul trucks.  

“It’s a big step up for us as a company, from a 20-strong management team to a completely different kind of company, including managing over $600 million of procurement in-house this year,” Matos said. 

“We want to simplify doing business with our suppliers, and we’ve been meeting with them to find ways to work smarter, with a more site-centric approach.” 

About Ray Chan

Editor of industrial titles and mastheads with Prime Creative Media. Publications include Rail Express and Australian Mining (web content).

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