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New UserBHP cuts coal costs, says outlook gloomy
24 Nov 2014
BHP Billiton has signalled further cost reductions at its coal operations but with limited prospect of a quick turnaround in their fortunes.
In presentations to securities analysts Monday, BHP said it intends to reduce costs a further 10 per cent at its coking coal operations to less than $US90 a tonne.
At its steaming coal mines, it intends to reduce costs by a further 15 per cent to less than $US45 a tonne.
However it said there is little prospect of a turnaround in the underlying fortunes of the steaming coal sector until uneconomic production is shut down.
A number of steaming coal producers are locked into so-called 'take-or-pay' shipping contracts with rail operators so that it is cheaper for them to remain in production even though they are losing money, as they wait for an improvement in prices.
Along with reducing costs,BHP said it intends to lift coking coal output, which is primarily used by steelmakers, 4 per cent.
Output of steaming coal, however, will remain flat, it said.
Source: http://www.theage.com.au/