Coronado cuts spending as coal price falls
Coronado Global Resources has and slashed spending with COVID-19 causing uncertain demand for metallurgical coal.
Coronado Global Resources withdrew its annual earnings guidance and slashed spending by 40 per cent with COVID-19 causing uncertain demand and pricing for metallurgical coal.
The producer said a planned expansion of its Curragh coal mine in Queensland, one of the world’s largest met coal mines, had been deferred as part of the spending reduction. It had previously guided for $US190m-$US210m ($293m-$324m) of capex in the 2020 financial year.
Coronado said its revenue fell 8 per cent to $US409m in the March quarter on lower metallurgical coal prices. They have since dropped to $US122 a tonne with further declines likely.
Global steel producers outside China have cut production due to a decline in demand from the construction and automotive industries including Japan, South Korea, Brazil, Europe and North America.
“These regions have enforced steel production cuts between 30-60 per cent,” Coronado said.
“The timing of a global recovery is uncertain given the economic backdrop and the potential for further downside risks to the price of metallurgical coal is high.”