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Anglo American suspends operations at Moranbah North coal mine on safety concerns

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Anglo American suspends operations at Moranbah North coal mine on safety concerns

New York — Operations at Anglo American's Moranbah North coking coal mine in Queensland, Australia, is suspended on safety concerns following detection of a gas leakage, the company said in a statement Feb. 22.

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The suspension of operations was due to "a change in underground conditions" at Moranbah North Mine on Feb. 20, and the company had evacuated workers as a precaution.

"The trigger for the underground withdrawal was elevated levels of some gases in the goaf, which would indicate a coal heating issue and an overpressure event," a spokesman for Anglo American said in an emailed reply to S&P Global Platts queries.

The company said it had been "mining through some particularly challenging geology."

There was no evidence of any explosion, the spokesman said, "and methane levels on the longwall were well within the regulatory levels."

Moranbah North is 88% owned by Anglo American. The mine's hard coking coal is exported mainly to Japan, South Korea, Taiwan, India, Brazil and Europe.

"At this junction, market participants are still in the early stages of assessing the impact and awaiting more news from the company," a trader source said, anticipating that the disruption in coking coal production could impact spot prices.

Anglo American did not provide a timeline on the mine's reopening.

"The conclusions from the expert review of the incident will inform a comprehensive risk assessment prior to re-entry, which will require regulatory approval," the spokesperson said.

"It seemed to be less of an issue as compared to the Grosvenor mine incident," a trader source said, referring to the Grosvenor coal mine explosion on May 6, 2020, when five people were injured.

Miner Anglo American had revised its 2020 metallurgical coal production to about 17 million mt from the previous estimate of 16 million-18 million mt at an investors' update call on Dec. 11, 2020. The latest metallurgical coal output figure is down 26% from the 2019 production volume of 23 million mt, the same report stated.

For 2021, production volume is estimated within 18 million-20 million mt. The lower production levels in 2020 and 2021 is due to the Grosvenor incident, the company had said.