Peabody Energy dispute hits bottom line

Ongoing tensions between workers at Helensburgh’s Metropolitan Colliery and mine owner Peabody Energy cost the company millions of dollars and contributed to a drop in quarterly revenue.

The lengthy industrial action, along with the delayed commission of a longwall at one of the miner’s Queensland sites, cost the company $112.6 million and reduced the business’s overall Australian earnings.

Without the events, Australian costs per short ton would have been about $5 lower for the quarter.

Peabody’s Australian operation recorded a 20 per cent fall last quarter while total revenue for the US miner dropped to $1.95 billion in the fourth quarter, which ended on December 31 last year.

Last year, the company made structural cost improvements within its Australian operations, including improving productivity at its pulverised coal injection mines, resulting in a 20 per cent cost improvement.

Australian coal sales for the quarter totalled 34.9 million short tons, including 15.9Mt of metallurgical coal and 11.4Mt of seaborne thermal coal.

Peabody Energy chairman and chief executive Gregory Boyce said coal demand growth was expected to exceed supply increase in 2014, leading to improved results.

‘‘We look for continued record coal use in 2014 as developing nations increase coal imports and developed nations capitalise on coal’s cost and reliability advantage over natural gas and renewables,’’ he said.

Peabody is targeting Australian coal sales of 35 to 37 million tons this year.

The bitter dispute between Metropolitan workers and the company came to an end in November after nearly six months of hostilities over enterprise agreements.

The ongoing industrial action included union-sanctioned bans and limitations, several lock-outs instigated by the company and a month-long strike protest camp.


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