Australia-listed coal miner South32 is on the lookout for new metallurgical coal assets but will avoid new thermal coal projects, a spokesman for the company told S&P Global Platts Friday.
This follows the miner agreeing earlier this month to acquire Peabody Energy's Metropolitan Colliery and 16.67% interest in the Port Kembla Coal Terminal in the state of New South Wales.
"Metropolitan is adjacent to our Illawarra operation in New South Wales, so it is a natural fit for our portfolio, and will enable us to unlock unique blending and resource synergies, whilst adding up to 2 million mt per annum of metallurgical coal to our portfolio," CEO Graham Kerr said at the company's annual general meeting in Perth on Thursday.
"Consistent with our strategy, we will continue to identify and evaluate new and exciting opportunities outside our current portfolio, where we see value," he added.
But, because of uncertainty around carbon prices, climate change and demand, the miner will not be looking for new thermal coal assets, the South32 spokesman said.
"We like what we have today, and will continue to invest in [our thermal coal mines] in South Africa," he added.
Platts assessments of Premium Low Vol have more than quadrupled so far this year to $306.25/mt FOB Australia on November 24, from $74.65/mt FOB Australia on January 4.
Meanwhile, the thermal coal Newcastle 6300 kcal/kg GAR 7-45 day price has risen 96% since the start of the year to $96/mt FOB Australia on November 24.
Chinese supply shortages and logistical bottlenecks as well as Australian mining outages have fueled the rally in met coal prices.
Together with the Metropolitan coal operations in Australia, South32 also owns Illawarra Metallurgical Coal which operates two underground mines near Wollongong in New South Wales.
The coal is trucked to Port Kembla for distribution to domestic and international customers.
Platts reported on Tuesday that the company will restart a suspended longwall at its Illawarra metallurgical coal mine within a week.
Operations at its Appin mine had been disrupted since the start of September.
South32 is the fourth-largest premium hard coking coal seaborne producer -- accounting for 7% of total prime hard coal market share in 2015, according to Platts calculations.
Last month, South32 lowered its fiscal 2016-2017 (July-June) production guidance for Illawarra Metallurgical Coal to 9 million mt, from 9.5 million mt earlier, due to challenging ground conditions.
Production guidance for its South African assets for fiscal 2016-2017 stands at 30.9 million mt -- 17 million mt for the domestic market and 13.9 million mt for the seaborne market. South32 is the third-largest exporter and fifth-largest domestic supplier of energy coal in South Africa, according to its website.
