Xstrata has said that it will take over direct running of its Collinsville coal mine joint venture from mining contractor, Thiess, after the mine suffered substantial financial losses in 2012/13. The change aims to “restore the mine’s viability”, the company said in a press release in the face of weak coal export markets, a strong Australian dollar and high costs.
Xstrata: “comprehensive reorganisation is now required”
Thiess has managed the day-to-day operation of the Bowen Basin mine since Xstrata acquired majority ownership in 2003. In recent months, the company has been working closely with the contractor to assess the mine’s future: “Despite efforts to restore the mine’s profitability, a more comprehensive reorganisation is now required if it is to be viable, provide employment and play a role in the community,” the company continued. “As owner-operators Xstrata Coal will be able to make the decisions and changes necessary to improve productivity and reduce costs.”
Xstrata has been majority owner of the Collinsville mine since acquiring Mount Isa Mines (MIM) in 2003. The mine currently produces about 3.9 million tpa of metallurgical and thermal coal. The mine is owned by a joint venture partnership between Xstrata Coal (55%), Itochu Coal Resources (35%) and Sumitomo (10%).
Adapted from press release by Jonathan Rowland.