Stanmore Resources has maintained its 2025 coal production guidance despite unprecedented wet weather disruptions, while lowering its cost and capital expenditure forecasts amid challenging market conditions.
- Saleable coal production steady at 3.3Mt in Q1 2025 despite record rainfall
- FOB cash cost guidance reduced to US$85–90/t reflecting cost-saving initiatives
- Capital expenditure guidance cut by 24% to US$80–90 million for 2025
- Maiden JORC compliant reserves released for Isaac Downs Extension Project
- Strong safety record with no serious accidents and liquidity of US$389 million
Weathering the Storm
Stanmore Resources has demonstrated resilience in the face of extraordinary weather challenges during the first quarter of 2025. The company reported saleable coal production of 3.3 million tonnes, matching the previous quarter and year-to-date figures, despite enduring over 470mm of rainfall; the highest quarterly total recorded at Moranbah Airport since records began. This deluge, more than double the five-year average for the period, severely disrupted mining operations and logistics, including rail outages and port closures.
Yet, thanks to robust opening inventories and operational discipline, Stanmore managed to maintain steady production levels. The company anticipates a production recovery in the second half of the year, particularly as conditions improve and mining sequences adjust to the wet weather impacts.
Cost and Capital Discipline Amid Market Pressures
In response to a challenging metallurgical coal market marked by falling prices; with prime hard coking coal dipping to its lowest since mid-2021; Stanmore has prudently lowered its full-year FOB cash cost guidance to between US$85 and US$90 per tonne, down from US$89 to US$94. This reflects ongoing cost management initiatives and lower input costs.
Capital expenditure guidance has also been trimmed significantly, from US$100–115 million down to US$80–90 million, a 24% reduction. This move underscores the company’s focus on cash preservation and operational resilience amid heightened macroeconomic uncertainty and volatile coal prices.
Project Progress and Safety Highlights
Stanmore released its first JORC-compliant reserves statement for the Isaac Downs Extension Project, confirming robust fundamentals with 52 million tonnes of run-of-mine coal reserves and 34 million tonnes of marketable reserves. This milestone reinforces the long-term strategic value of the project within Stanmore’s portfolio.
Safety remains a standout aspect of the company’s operations, with no serious accidents reported for three consecutive quarters and a rolling twelve-month Serious Accident Frequency Rate approximately 75% below the industry average. A proactive safety culture is evident, with high reporting rates of hazards and near misses enabling early interventions.
Liquidity and Financial Position
Stanmore concluded the quarter with a strong liquidity position of US$389 million, including US$220 million in undrawn working capital facilities. The company’s net debt stands at US$146 million following a US$60 million dividend payment and completion of key growth capital projects. This financial flexibility provides a buffer against ongoing market volatility and supports the company’s strategic initiatives.
Looking Ahead
While the first half of 2025 is expected to see production below the annual average run-rate due to weather-related disruptions, Stanmore’s guidance anticipates a rebound in the second half, particularly at Poitrel, offsetting challenges at Isaac Plains Complex. The company’s cost and capital discipline, combined with strong liquidity and project development progress, position it well to navigate the uncertain coal market landscape.
Bottom Line?
Stanmore’s ability to maintain production and cut costs amid severe weather and market headwinds sets the stage for a critical second-half recovery.
Questions in the middle?
- How will ongoing wet weather impact production and logistics in the coming quarters?
- What are the implications of the lowered capital expenditure on future growth projects like Eagle Downs?
- How might fluctuations in global metallurgical coal demand, especially from India and China, influence Stanmore’s pricing and sales volumes?