Australia's Bounty Mining has halted production at its 1mn t/yr capacity Cook Colliery coking coal mine after struggling to increase output following a roof collapse at the mine in October.
International accounting firm PriceWaterhouseCoopers (PwC) and receivers yesterday took control of Bounty Mining's assets, undertakings and day to day operations.
"We intend to transition the Cook Colliery's operations into care and maintenance whilst we undertake an urgent assessment of the business and explore all options to sell and/or restructure the business for the future," PwC said.
Bounty Mining went into administration following "a period of depressed coking coal prices, production shortfalls in the wake of previously announced roof falls and the inability of the board to source the additional funds required to support the company in its transition to place change mining".
Falling coking coal prices have exerted increased pressure on producers since the second half of this year. The Argus assessment for premium low-volatile hard coking coal prices has dropped by 34pc since June this year to $134.90/t fob Australia yesterday.
"Bounty has been in a pretty dire financial state for a while and they have had a lot of investment to keep them above ground for this year in particular," an Australia-based trader said.
The roof collapse at Cook Colliery temporarily halted mining operations in mid-October. Operations resumed just a week later with just one of the two operating continuous mining machines.
Bounty had been struggling to boost production at the mine even before the roof collapse, possibly falling short of its 1mn t/yr run-of-mine target by producing only 151,000t of coal during April-June, which was up from the 146,000t produced for January-March.
Privately-owned Australian coal mining firm Qcoal earlier in October won a battle to control Bounty's finances and future offtake from US-based coal supplier Xcoal.
By Rou Urn Lee
