Anglo American (LON: AAL) has reported a roof collapse in parts of its Moranbah North coking coal mine in Queensland, Australia.
The diversified miner said no one was injured in the accident, which happened during a planned longwall move. It noted the incident was triggered by a geotechnical issue.
Coking coal markets have been particularly sensitive to supply disruptions over the past four years, and the Moranbah North outage comes as the Australian sector readies for cyclone season, when operations are often forced to close because of harsh weather conditions.
Analysts at Jefferies said while it was too early to say how long the mine would be offline, the impact could be significant.
“If we assume the mine is down for the year, this would be a ~$350 million consolidated EBITDA hit for Anglo’s 2020E results, equating to ~3.5% on our price deck and ~3% on spot prices,” they write.
The investment bank notes that hard coking coal prices would have to average US$20 per tonne higher than its current forecast of US$155 per tonne for Anglo to make up the volumes via pricing.
Moranbah North has produced more than 6 million tonnes of coking coal in each of the past two years, accounting for roughly 3% of Australia’s exports of the steelmaking material.
Anglo American, which has consistently been offloading coal operations since 2014, recently trimmed its 2021 thermal coal target to 26 million tonnes from a previous goal of as much as 30 million tonnes.
The diversified miner has also cut its 2020 metallurgical coal production outlook to 21-23 tonnes from 22-24 tonnes, though that commodity appears to be one of Anglo’s key pillars of growth moving forward.