Diversified miner Glencore posted $9.8 billion in total coal revenues in 2017, up 43% from the prior year, the company said Wednesday.
The Switzerland-based company, which posted $32/mt coal margins, attributed the revenue surge to various factors, including Chinese supply-side reform, and soaring global coal prices.
Global seaborne thermal coal demand grew more than 30 million mt, or 3.7% in 2017, Glencore said, driven largely by demand from Asia Pacific markets, notably South Korea and China.
S&P Global Platts assessed CIF ARA 6,000 NAR thermal coal at an average price of $84.78/mt, up 41.4% in 2017, and assessed FOB Newcastle 5,500 NAR thermal coal at an average price of $71.84/mt, up 31% from 2016.
Thermal coal sales volumes totaled 106.3 million mt in 2017, up 1% from the prior year. Metallurgical coal sales volumes totaled 2.3 million mt, down 4% from the prior year.
Australian thermal coal revenues totaled $5.56 billion, up 36% from 2016. South African thermal coal revenues totaled $1.52 billion, up 12% from 2016.
Revenues at Glencore's Prodeco complex in Colombia totaled $1.21 billion, up 6% from 2016, and revenues at the Cerrejon mine in Colombia totaled $790 million, up 30% from the prior year.
The company noted an income of $225 million in coal derivative positions settled in 2017.
"These positions related to portfolio risk management/hedging activities initiated in Q2 2016 to manage forward sales price exposure, relating to future coal production," the company said.
The company also acknowledged a risk management decision in Q2 2016 to lock in H1 2016 pricing had resulted in an "opportunity cost" of $380 million in 2017.
All of the affected tons had rolled off by the end of the year, Glencore said.
Earlier this month, Glencore announced its production had totaled 120.6 million mt in 2017, down 3% on the year, as productivity improvements and the company's higher equity share in certain mines offset reductions due to industrial action and adverse weather.
Of the total, 110.5 million mt was thermal coal, 6.1 million mt was coking coal and 4 million mt was semi-soft material.
