Having found its operations impacted by unseasonal wet weather and global economic circumstances that have spurred on higher inflation across the globe, US-Australian company Coronado Global Resources, a global producer of high-quality metallurgical coal, has revised down its coal production guidance for 2022 and has also increased its 2022 cost guidance.
Specifically, the company expects to produce 16.9-17.1 million mt of coal in 2022 instead of the initially targeted 18-19 million mt, comprising around 5.3-5.5 million mt of coal that is planned to be produced in the fourth quarter. The revised production guidance has been determined mostly based on the impact of wet weather. In the April-September period of the current year, rainfall in the town of Blackwater (the nearest town to the Curragh mine) exceeded 3.3 times the 10-year average for the town.
Besides, the company has increased its cost guidance to $81-83/mt for 2022 from the $79-81/mt levels released in July, mostly due to high pressure from inflation, which had reached 7.3 percent by September 30 in Australia. and due to geological issues impacting production.
Meanwhile, in the third quarter of the current year, the company's run-of-mine (ROM) coal production amounted to 6.4 million mt, increasing by 16.5 percent quarter on quarter, while the company's coal sales in the given period increased by 4.8 percent quarter on quarter to 4.1 million mt. The significant improvement in metallurgical coal markets over the last 18 months enabled the company to generate $2.854 million revenues during the first nine months of the current year, up 107.8 percent year on year, though in the third quarter of the current year the company's revenues declined by 15.3 percent quarter on quarter, totaling $875 million. “Met coal prices have recently improved supported by supply concerns from Australia and Canada and high thermal coal prices continuing to support met coal crossover tonnes into the thermal market. Coronado has continued to take advantage of this price arbitrage with planned sales of approx. 410,000 mt into the thermal market in the fourth quarter of 2022,” Gerry Spindler, chief executive officer at Coronado stated.