Miner Glencore has stopped production at one of two coking coal mines at its Oaky Creek complex in Queensland for geological reasons, according to multiple sources.
The Oaky No. 1 mine at the Bowen Basin site, which is producing two brands of premium mid-vol hard coking coal, has been shut down, sources, including customers and traders said.
Two sources said the reason for the closure was Oaky No. 1's mineable resources were being exhausted.
Glencore would not comment on the matter when contacted Wednesday. Oaky Creek is owned by Glencore (55%), Sumisho Coal Australia (25%), Itochu Coal Resources Australia (10%) and ICRA OC (10%).
The reported mine closure comes as a slowdown in some mining areas of the Bowen Basin feeding the multi-user DBCT coal terminal may be contributing to long queues of ships waiting to load coal.
Premium HCC cargoes this week traded higher in the spot market, at either side of $200/mt FOB market for January loading clips. Platts Premium Low Vol HCC assessment rose to $201/mt FOB Australia on Wednesday, up 12% from $179/mt FOB at the start of the month.
The Switzerland-based mining group had previously reported suffering production losses at its Australia-based coking coal operations, due to geological problems at the Oaky Creek complex.
The impact of Oaky No. 1 mine will reduce output of the Oaky North HCC brand by around 1.5 million mt, said one source advised by the company.
The Oaky North product, which had been around 23% volatile matter with 69% CSR, was said to have reduced in volatile matter as a result of Oaky No. 1 being shut. No impact on the higher VM and higher fluidity Oaky Creek specification was mentioned by sources.
The two coals trade mainly into India and northeast Asia, largely on contract basis with negotiated pricing, according to market sources.
Glencore said 5.9 million mt of saleable coal was produced at the Oaky Creek complex in 2016, according to its website.
November's premium coking coal index values form the last leg of the three month period used to average spot price assessments, which then determine some benchmark quarterly contracts for fourth quarter 2017 loadings. Steel mills are keenly aware of mine and shipment disruption experienced in Queensland this month feeding into spot price indices looks to support eventual Q4 contract pricing.
Indices used for Q3, 2017 pricing came in at around $170/mt FOB. The average for September through to November 22 is over $190/mt FOB.
