By Rhiannon Hoyle
SYDNEY--Peabody Energy Corp. on Thursday said it would pare
coking-coal output and impose layoffs at an Australian mine, the
latest in a series of production cuts by miners of the fuel as
prices languish at near-decade lows.
Peabody said it would cut coal production at its North Goonyella
mine in Queensland state by roughly 1.5 million tons a year to
lower costs, improve productivity and preserve the deposit's best
coal for the time when market demand improves.
It will consequently reduce its workforce at the mine, which had
been projected to produce 3 million tons of coal this year, and now
will produce closer to 2.3 million, by up to 40%.
A prolonged dive in prices has been compelling miners to move
beyond just cutting costs, their first line of defense in hard
times. Major coking coal suppliers, including Glencore PLC and
Canada's Teck Resources Ltd. are also reducing production, blaming
the chronic global oversupply of coal.
China's appetite for the type of coal, used in steelmaking, is
diminishing, deepening a market downturn miners say is the worst in
recent memory. The price of steelmaking coal shipped from
Australia, the world's biggest exporter, has fallen 23% this year
to roughly $86 a metric ton, its lowest level in nearly a decade.
The slide extends a decline begun in 2011, during which the fuel's
value has slumped by around three-quarters.
Write to Rhiannon Hoyle at Rhiannon.hoyle@wsj.com
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