Anglo American sees lower 2020 S African thermal coal output on coronavirus

Singapore — South African miner Anglo American said Friday it expects 2020 thermal coal production to drop by 1 million-2 million mt from 2019's 29 million mt as it reduces its workforce by as much as 70% in response to the coronavirus lockdown, stoking fears of tight supply in the near term.

However, the necessary rail and port logistics infrastructure are expected to remain in operation during this period, the company said in a statement.

Anglo American owns Goedehoop, Greenside, Khwezela, Zibulo, Mafube collieries and Isibonelo coal mine.

Anglo American exported 19 million mt of thermal coal in 2019.

The Isibonelo coal mine, which supplies Sasol's fuel production facility, will operate with a 20% reduced workforce, the statement said.

The announcement comes close on the heels of a halt to South Africa's Richards Bay Coal Terminal operations starting midnight local time Thursday in accordance with the nation's 21-day lockdown.

Anglo's thermal coal volume account for as much as 25% of South African thermal coal exports and this move from Anglo may cause supply shortages in the near term, an international trader said.

India, South Africa's main coal export destination, has also struggled with its own 21-day lockdown measures and the widespread expectation in the market is that buyers may now seek high-CV alternatives from Russia and Australia or low CV Indonesian coal should supply from Richards Bay, sources said.