Peabody Fights Fire at North Goonyella
The elements of the plan include implementing use of a mobile GAG unit, a specialist piece of equipment that generates high-moisture inert gases to displace oxygen supply at a fire zone; and installing temporary seals into mine openings following completion of risk assessments and using remote-control equipment to pump a fire-resistant expandable material called Rocsil. The plan also includes additional drilling and sealing of the old longwall panel to ensure the area is further isolated. The company will work with air-quality monitoring experts on a voluntary program of environmental monitoring at North Goonyella, including regular site visits and boundary inspections to assess and analyze air-quality data from key points. The company will also make sure all safety protocols are in place and strict risk assessments are performed.
“Working in consultation with the inspectorate and third-party experts, we’re moving safely and as quickly as possible to address the situation,” said President of Peabody Australia George J. Schuller Jr. “Peabody appreciates the ongoing work of the team at North Goonyella, the inspectorate, independent technical experts, Queensland Mines Rescue Service, union representatives and all of the people who are engaged in the response to this issue.” The company noted that the fire is ongoing, and it is too early to assess the extent of impacts.
Peabody does not expect any production from North Goonyella in the fourth quarter of 2018 and has a small amount of coal in inventory to ship. The company said it is too early to assess the full financial impact to future periods as a result of the ongoing issue, however, with strong performance from other mines, the company is maintaining its full-year 2018 metallurgical coal sales volume targets of 11 million to 12 million tons. The mine shipped 1.6 million tons in 2016 and 2.9 million tons in 2017. North Goonyella ships a high-quality hard-coking coal that typically realizes at or near the premium hard-coking coal benchmark.
Prior to the Goonyella North fire, Peabody Energy signed a definitive agreement to purchase the Shoal Creek metallurgical coal mine from Drummond Co. Inc. for $400 million. Shoal Creek is in central Alabama and serves Asian and European steel mills with high-vol A coking coal.
The transaction involves the purchase of the mine, prep plant and supporting assets, and excludes legacy liabilities other than reclamation. The purchase price is subject to customary working capital adjustments. Closing is expected prior to the end of 2018. Opened in 1994, Shoal Creek employs 400 and uses longwall mining technology to mine both the Blue Creek and Mary Lee coal seams. The current mine plan accesses 17 million tons of reserves. In 2017, the mine sold 2.1 million tons.