Production Report - 31 May 99
BROKEN HILL PTY CO LTD
13 July 1999
BHP MINERALS
COAL OPERATIONS REPORT
FOR THE 12 MONTHS ENDED 31 MAY 1999
Production and Shipments
Coal production from the mines owned or operated by BHP Coal
during the twelve month period ended 31 May 1999 totalled
68.6 million tonnes - a decrease of 2.7 per cent over the
corresponding period in 1997/98.
Total shipments/sales from nine coal mines in Queensland's
Bowen Basin, five in the Illawarra region of NSW, three in
Kalimantan, Indonesia and three mines in New Mexico, USA,
amounted to 68.25 million tonnes.
The twenty coal mines are owned by BHP, or managed by BHP
Coal on behalf of the mine owners - the CQCA Joint Venture,
the Gregory Joint Venture, BHP Mitsui Coal Pty Ltd, PT
Arutmin and PT Kendilo Coal, Indonesia.
Shipments from the Queensland and NSW mines represented
around one quarter of Australia's total annual coal exports,
and more than 20 percent of the world's annual seaborne
trade in coking coal.
Coal Sales Revenue
Total revenue from coal sales from the Queensland, NSW,
Kalimantan and NewMexico operations during the twelve month
period amounted to A$3.9 billion.
Operations
BHP's coal operations continued to be adversely affected by
weaker demand from world steel producers, and an oversupply
of coal on international markets. This led to heightened
competition on price and tonnage from other coal producers
within and outside of Australia. Production in Queensland
was also interrupted by periods of unseasonable heavy
rainfall.
BHP responded to the downturn in global coal markets with
major cost reductions in all parts of its business.
Reductions have centred around a broad range of activities
including production, maintenance, supply and
administration. This has resulted in a reduction in employee
levels at Queensland and NSWoperations.
Productivity levels improved significantly during the year
with the introduction of more efficient work practices, the
elimination of non-value adding activities, and the reduced
workforce. Performance will be further enhanced with the
commissioning in 2000 of a new large dragline in Central
Queensland, following commencement of construction in June
1998.
Consistent with the company's policy to dispose of non-core
assets, BHP sold its 50 percent interest in the Chinchilla
East thermal coal deposit in Queensland's Surat Basin, and
appointed a preferred bidder for the proposed sale of its 80
percent interest in the Moura open cut mine in Central
Queensland.
Government Share of Income for the Year ended 31 May (Qld
Operations)
Government share ofincome for the twelve months period,
excluding corporate income tax, amounted to $427.4 million.
Total Queensland rail freight paid was $299.7 million, of
which the railway operating cost component is estimated to
be $180.1 million.
($ millions) 1999 1998
State Government
Royalties 113.3 125.6
Special Royalties (.) 153.2 192.8
Payroll Tax 17.5 23.1
Queensland Government profit included
in rail freight charges (estimated) 119.6 141.1
----- -----
Sub Total 403.6 482.6
Federal Government
Coal Research and Long Service Leave Levies 13.1 16.2
Fringe Benefits Tax 10.7 11.9
---- ----
Sub Total excluding income tax (:) 23.8 28.1
Total Government Share of Income
excluding income tax 427.4 510.7
-------------------------------------------------------------
(.) The State Government has announced it will introduce a
new standard royalty payment of 7 percent for all Qld
coal producers from 1 July, 2000, which will eliminate
special royalties. A transitional arrangement will
apply from 1 April, 1999 for companies paying above
this level, which comprises the standard 7 percent
royalty, plus a uniform special royalty of $3.00 per
tonne on production previously above the 7 percent
rate.
(:) Income tax paid by the Queensland joint venture
participants is estimated to be in the order
of several hundred million dollars, but is not
readily ascertainable because of the different ownership
structures.
Total Coal Shipments (thousands of tonnes)
Twelve Months Ended 31 May
1999 1998 % Inc
(Dec)
CQCA Joint Venture
Blackwater 5,802 4,297 35.0
Goonyella 7,342 7,460 (1.6)
Peak Downs 6,490 6,702 (3.2)
Saraji 4,903 4,714 4.0
Norwich Park 3,522 5,100 (30.9)
--------------------------
Sub Total CQCA 28,059 28,273 (0.8)
Gregory Joint Venture
Gregory/Crinum 4,038 4,400 (8.2)
BHP Mitsui Coal
Moura 3,526 3,951 (10.8)
Riverside 2,798 3,077 (9.0)
Sth Walker Creek 2,068 1,267 63.2
--------------------------
Sub Total BHP Mitsui Coal 8,392 8,294 1.2
--------------------------
Total Qld Operations 40,490 40,968 (1.2)
-------------------- --------------------------
Mt Owen, NSW * - 3,119 (100.0)
Illawarra Collieries 7,005 7,434 (5.8)
Indonesian Operations (.) 6,771 5,852 15.7
New Mexico Operations ** 13,988 13,043 7.2
TOTAL BHP COAL 68,254 70,416 (3.1)
* Mt Owen mine was sold to interests led by Glencore
International AG in May 1998.
(.) After 13.5% share to Indonesian Government
** BHP's Western US coal operations became part of the BHP
Coal Group in August 1998. They comprise three thermal
coal mines in New Mexico supplying mine mouth power
plants.
Shipments by Destination (thousands of tonnes)
Twelve Months Ended 31 May
--------------------------
1999 % 1998 %
---- -- ---- --
Japan 15,397 22 16,553 22
Europe 13,377 20 11,126 16
India/Other Asia 12,274 18 14,628 21
South America 3,177 5 3,255 5
Australia 8,582 13 9,113 13
USA 13,988 20 13,033 19
Other 1,459 2 2,708 4
----------------------------
TOTAL 68,254 100 70,416 100
----- ----------------------------
Mine and Port Ownership
Central Queensland Coal Associates (CQCA) Joint Venture
CQCA owns the Blackwater, Goonyella, Peak Downs, Saraji and
Norwich Park mines in the Bowen Basin, and the coal export
terminal of Hay Point.
Central Queensland Coal Associates is a joint venture
between the following participants:
%
BHP 52.10
QCT Resources 32.37
Mitsubishi Development 15.53
------
100.00
Gregory Joint Venture
The Gregory Joint Venture owns the Gregory and Crinum mines
and comprises the following participants:
%
BHP 64.14
QCT Resources 32.37
Mitsubishi Development 3.49
------
100.00
BHP Mitsui Coal
BHP Mitsui Coal Pty Ltd owns the Central Queensland mines of
Moura, Riverside and South Walker Creek.
Participating shareholders of BHP Mitsui Coal Pty Ltd are
BHP (80%) and Mitsui & Co (20%).
BHP
BHP owns five underground mines comprising BHP Illawarra
Collieries NSW, and three opencut mines in the Four Corners
area in New Mexico, USA.
PT Arutmin Indonesia
PT Arutmin (BHP 80%, PT Bakrie Bros 20%) operates Senakin
and Satui mines and the North Pulau Laut Coal Terminal in
Kalimantan.
PT Kendilo Indonesia
PT Kendilo (BHP 80%; Mitsui Mining Japan 20%) operates
Petangis mine in Kalimantan.
* * * * *
For information contact: Ian Dymock
Manager Public Affairs
BHP Coal Pty Ltd - Brisbane
Tel : +61 7 3226 0512 (bh)
Latest directors dealings
- 20 hours ago Savannah Energy
- 21 hours ago Buccaneer Energy PLC
- 21 hours ago Savannah Energy
- 21 hours ago Carclo
- 21 hours ago Schroder Japan Growth Fund