Coal production from the top ten mining companies (Coal India, China Shenhua, Yanzhou Coal, Peabody, China National Coal, Glencore, Siberian Coal, PT Bumi, BHP and Arch Resources) fell from a collective 1,704Mt in 2019 to 1,633Mt in 2020, which is a 4.2% decline.
The most significant declines were observed from Arch Resources (28.6%), PT Bumi (24.9%), Glencore (23.9%), and Peabody (21.8%), according to GlobalData, a leading data and analytics company.
GlobalData expects production from the top ten companies to be between 1,683-1,740Mt in 2021, which is an increase of up to 6.6% compared with the collective output in 2020 (1,633Mt). Operating activities, backed by the rollout of vaccine and strict COVID-19 protocols on-site, returning to normal is expected to be a key production driver for companies in 2021.
Production from Arch Resources (formerly Arch Coal) declined primarily due to the sale of the Holden #22 Surface mine in December 2019, coupled with weak economic conditions during Q1 2020. In addition, the temporary suspension of the Viper mine in Q2 2020 further disrupted the companys coal production.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: Heavy rainfall amid the outbreak of COVID-19 impacted PT Bumis output in 2020, while Glencores coal output fell for the fourth consecutive quarter as the companys Colombian coal assets remained suspended as part of the COVID-19 preventive measures.
Scheduled production cuts across the Australian portfolio also impacted the companys overall output as did the placement of the Prodeco mine under care and maintenance and strikes at Cerrejon between August and December 2020.
Peabodys output dropped primarily due to the upgrade of the main line conveyor system at Shoal Creek, alongside pit sequencing work at Moorvale and a dragline outage at Coppabella. In addition, the company also suspended operations at the Wambo underground mine for around 59 days during the second half of 2020. The closure of mines including Kayenta and Cottage Grove (Q3 2019) and Wildcat Hills (Q2 2020) further impacted the companys output.
Bajaj continued: BHPs coking coal production was impacted by planned maintenance at the Saraji and Caval Ridge mines, environmental disruptions at La Nina, and lower yields at the South Walker Creek and Poitrel mines. Meanwhile, the thermal coal segment, from which the company is expected to exit in the near future, was affected by a 91-day strike at Cerrejon, which started on August 31, 2020.
In contrast, production from Coal India rose by 4% owing to a recovery in the offtake from Indias power sector, which was supported by a resumption in industrial and commercial activities as the countrys electricity demand started to recover from the COVID-19 setback, said Bajaj.
Output from China Shenhua, Yanzhou and China National Coal Group also increased, rising by 3.1%, 10.2% and 8.1%, respectively, in 2020, mainly owing to a quick recovery in China, particularly during the second half of 2020.
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