Bowen Targets 0.5Mt Coal Output with Reduced Fleet as Prices Remain Weak

• Owner-operator mining commenced at Burton Mine Complex with reduced fleet
• Production rates cut due to depressed coal prices and high costs
• Focus on low-cost, low strip-ratio coal extraction targeting ~0.5Mt in September quarter
• Active refinancing and commercial negotiations underway with creditors and Queensland Revenue Office
• Potential operational pause if market conditions and financing do not improve

Operational Shift Amid Market Pressures

Bowen Coking Coal has officially transitioned to an owner-operator mining model at its flagship Burton Mine Complex in Queensland, marking a strategic pivot in response to persistently low coal prices and challenging global steel market conditions. The company has reduced its mining fleet from four to two excavators, concentrating on extracting coal from low strip-ratio areas to minimise costs and preserve cash reserves.

This operational recalibration reflects the broader pressures facing metallurgical coal producers, including a higher industry cost base and elevated state royalty rates. Bowen’s decision to scale back production is a pragmatic move aimed at maintaining financial stability while awaiting a potential market recovery later in the year.

Production Focus and Financial Strategy

During the September 2025 quarter, Bowen plans to produce approximately 0.5 million tonnes of run-of-mine coal, primarily from the Ellensfield South and Plumtree North sites within the Burton Complex. The company is targeting a strip ratio below 3 – 1, which is critical to keeping extraction costs low amid depressed prices.

However, Bowen has cautioned that if coal prices do not improve or if refinancing efforts fail, mining operations at Burton may be paused. To that end, the company is actively engaged in confidential negotiations with senior secured lenders, unsecured creditors, and the Queensland Revenue Office to secure relief and additional funding. Advisors have been appointed to explore refinancing options, including debt, equity, and hybrid instruments, aiming to strengthen the balance sheet and extend debt maturities.

Market Context and Outlook

Coal prices have experienced volatility in recent months. After a brief rally in May 2025, driven by supply disruptions in the Bowen Basin, prices have softened again amid global steel oversupply and geopolitical uncertainties, particularly related to U.S. tariff policies and Chinese export dynamics. Bowen’s benchmark hard coking coal price has stabilised around US$177 per tonne, down from a recent peak of nearly US$196.

Despite these headwinds, Bowen remains cautiously optimistic about a medium-term price recovery, anticipating seasonal restocking by steel mills following the Indian monsoon season. Meanwhile, thermal coal prices have also softened, reflecting subdued demand from China and broader economic slowdowns in Asia.

Strategic Implications

The transition to owner-operator mining underscores Bowen’s commitment to operational control and cost efficiency, even as it navigates a difficult market environment. The company’s substantial investment in the Plumtree North development, now 90% complete, positions it well to ramp up production when conditions improve.

However, the success of Bowen’s refinancing efforts and the trajectory of global coal markets will be critical determinants of its near-term operational viability. Investors and stakeholders will be watching closely for updates on creditor negotiations and any shifts in production strategy.

Bottom Line?

Bowen’s survival hinges on securing funding and a coal price rebound; failure could force a halt at Burton.

Questions in the middle?

• Will Bowen secure refinancing to avoid operational suspension?
• How soon might metallurgical coal prices recover to support steady production?
• What concessions or relief might Bowen obtain from creditors and the Queensland Revenue Office?