Anglo American's thermal coal division produced 67.6 million mt in the 2013 financial year, slipping 2% on the year due to lower-than-expected production at Colombia's Cerrejon and South Africa's New Vaal mines.
The miner said in its results report Friday that New Vaal production was interrupted by rainy weather and hit by reduced demand from state utility Eskom, while Cerrejon's output was affected by a 32-day strike in the first quarter.
It added that that the dip in production at the two mines was added to by lower production at Goedehoop and Landau in South Africa, but offset by improved machine rates and waste treatment at Greenside.
Anglo's South African export thermal coal production fell 0.6% year on year to 17 million mt, with 17.5 million mt of the coal sold during the year, a 2% increase from 2012. The export coal was sold at a weighted average achieved sales price of $77/mt FOB, compared with $92/mt FOB the previous year.
The miner said that 75% of South African thermal coal exports went to Asia, 3% less than in 2012.
South African domestic thermal coal production totaled 39.6 million mt, a 1.1% drop on 2012's volumes, of this, 33.6 million mt was for Eskom.
Domestic coal sales in South Africa fell 2.7% year on year to 39 million mt, with the coal sold at an average price of $19/mt, marginally down from $21/mt in 2012. The miner's Colombian export thermal coal output was 4.7% lower on the year at 11 million mt, although export sales rose 2.1% to 11.1 million mt in 2013. The average sales price was $73/mt FOB, down from $89/mt FOB in 2012.
FALLING THERMAL COAL PRICES
Anglo said in the results that falling thermal coal prices had "forced producers to seek productivity gains and ramp up volumes in order to reduce unit costs." It said this had resulted in strong supply from exporting countries with the 18% depreciation of the South African rand and 6% depreciation of the Australian dollar providing some relief for producers.
"Demand for seaborne thermal coal is forecast to remain strong, driven mainly by strong growth in Asia with China and India remaining the key markets. Atlantic demand is likely to be steady in the short term as new coal-fired capacity is being offset by the closure, in certain cases at the insistence of regulators, of older power stations," Anglo said.
However, it added that high domestic production in India and China would continue to restrain imported coal prices.
Meanwhile, the miner's metallurgical coal division -- which also includes Australian thermal coal production -- produced 31.2 million mt of coal in the 12-month period, up 2% on-year.
Australian export thermal coal production rose 3.6% from 2012 to 6.3 million mt, with 6.8 million mt of the coal sold during the year, a 5.4% increase on the year. The export coal was sold at a weighted average achieved sales price of $84/mt FOB, compared with $96/mt FOB in 2012.
Australian domestic thermal coal production equalled 6.2 million mt, a 9.9% drop from the previous year. Domestic coal sales fell 11.5% year on year to 6.1 million mt, with the coal sold at an average price of $39/mt, up from $37/mt in 2012. Production of metallurgical coal climbed 5.6% on the year to a record 18.7 million mt due to longwall improvement programs at Moranbah North and Capcoal's underground operations and operational improvements at Peace River Coal. Yearly met coal sales jumped 9.4% from 2012 to 19 million mt, with Anglo saying that an improved product mix was more than offset by a 24% price fall to $140/mt from $178/mt the previous year.
