Peabody will temporarily close its 2.5-million-metric-ton-per-year (mtpy) Wambo underground thermal and semi-soft coking coal mine in New South Wales in Australia. The firm will stop coal production from the underground mine for 59 days from June 19, after high-grade thermal coal and semi-soft coking coal prices fell to four-year lows amid COVID-19 related falls in seaborne demand. The company said it will continue development work, so the mine could restart in mid-August.
The Wambo underground mine sold 2.2 million mt of semi-soft coking and thermal coal in 2019. The closure will not affect the 3-million-mtpy Wambo open-cut mine, which is combining with Glencore’s United mine to form the 1-million-mtpy United Wambo joint venture.
The United Wambo joint venture was created in October-December 2019 and joint production will start late this year. The joint venture will see operating costs temporarily rise in 2020 during the transition to the new structure, as well as incurring around $60 million in capital costs in 2020.