BHP to sell Qld coal mines amid slump in prices
MINING giant BHP says it plans to off-load two of its metallurgical coal mines in central Queensland amid a slide in prices for the steel-making commodity.
Announcing a 4 per cent decline in annual profit Tuesday, BHP said it would continue to look at divesting its interest in BHP Mitsui Coal (BMC), which operates the Poitrel and South Walker Creek mines in the Bowen Basin. BMC is owned by 80-per cent owned by BHP and 20 per cent by Japan's Mitsui and Co.
BHP said the BMC mines were lost cost but produced low-quality coal that was less in demand than the hard-coking coal increasingly used in steel mills across Asia.
"Given our focus on hard-coking coal, these assets could better compete for capital outside of BHP," the company said in its results announcement, Options for divestment could include a demerger or a sale of the mines.
BHP said metallurgical coal prices had weakened markedly amid the global economic shutdown caused by COVID-19 and faced a "difficult and uncertain period."
Even against the backdrop of the "decarbonisation of the global economy," metallurgical coal would remain an essential input in steel-making process for a long time but the focus would be on cleaner fuel.
"As steel makers seek to reduce the carbon intensity of production, a higher value will be placed on hard-coking coal," the company said.
Originally published as BHP to sell Qld coal mines amid slump in prices