Bowen’s Cost Cuts Offset Price Drops but Safety and Market Risks Loom

Operational Excellence Drives Record Sales

Bowen Coking Coal has delivered a robust December 2024 quarter, marked by record coal sales and significant cost reductions. The company mined 789,000 tonnes of run-of-mine (ROM) coal, slightly exceeding expectations, while achieving a notably low strip ratio of 5.6:1, better than the planned 6.4:1. This operational efficiency was driven by early coal recovery at the Plumtree North pit and additional auger mining at Broadmeadow East.

Sales hit a quarterly record of 544,000 tonnes, generating A$99 million in cash receipts, positioning Bowen strongly for the upcoming quarter. The Coal Handling and Preparation Plant (CHPP) maintained high availability and utilisation rates of 95% and 91% respectively, supporting the production of 482,000 tonnes of saleable coal, a 9% increase from the prior comparable period.

Cost Reductions and Financial Performance

Bowen achieved a 39% reduction in quarterly free on board (FOB) cash costs to $117 per tonne, excluding state royalties and inventory movements. Mining costs fell sharply from $88 to $41 per ROM tonne, reflecting improved productivity and capitalisation of box cut development costs at Plumtree North. Processing and haulage costs also declined by 36%, benefiting from a new haulage contractor and operational optimisations.

The Burton Complex posted an EBITDA of $29 million and generated $13.9 million in operating cash flow, underscoring the financial benefits of the company’s cost control initiatives and operational consistency. Despite a 5% decline in average realised coal prices to A$205 per tonne, Bowen’s improved cost structure helped sustain profitability.

Strategic Developments and Outlook

Bowen’s equity raising and debt restructuring in late 2024 have strengthened the balance sheet, enabling continued investment in key projects such as the Plumtree North mine, which is on track for steady-state production by mid-2025. The company also reported progress on exploration and development projects including the Isaac and Lenton deposits, which are expected to contribute to long-term production continuity.

Logistics challenges early in the quarter, including rail and port maintenance, were largely overcome, allowing the company to dispatch eleven cargoes and set a new sales tempo record. Bowen has secured near-term rail and port capacity and is actively seeking to expand these arrangements to support future growth.

Market Context and Risks

The metallurgical coal market softened during the quarter, with premium hard coking coal prices declining amid subdued global steel demand and increased Chinese steel exports. Thermal coal prices also weakened due to favorable production conditions and oversupply. Bowen’s average realised prices reflected these trends, with coking coal at A$255.5/t and thermal coal at A$136.4/t.

Safety metrics showed a slight increase in the total recordable injury frequency rate to 4.4, highlighting ongoing challenges in maintaining workplace safety standards.

Looking ahead, Bowen remains focused on operational efficiency, cost discipline, and strategic development to navigate market volatility and capitalise on growth opportunities in Queensland’s Bowen Basin.