How Bowen Coking Coal Slashed Costs 33% While Under Administration

Operational Resilience Amid Financial Challenges

Bowen Coking Coal Limited (ASX, BCB) reported a resilient quarter ending 30 September 2025, delivering stable coal production and sales volumes despite the company being under voluntary administration and receivership. The Burton Mine Complex continued to operate on a business-as-usual basis, producing 749,000 tonnes of run-of-mine coal and achieving total coal sales of 433,000 tonnes, slightly up from the previous quarter.

Crucially, Bowen implemented a hybrid owner-operator mining model in July 2025, partnering with Emeco International and Mining Pro, which has significantly improved productivity and reduced costs. This new approach, combined with a low strip ratio mine plan, helped Bowen achieve a 33% reduction in FOB unit costs to A$128.6 per tonne compared to the same quarter last year, placing Burton within the first cost quartile of Australian metallurgical coal producers.

Financial Performance and Cash Position

Despite the challenging market environment and ongoing administration, Bowen generated $14.2 million in operating cash flow during the quarter and ended September with $56.4 million in cash and cash equivalents, including $19.6 million in restricted cash. Total revenue for the quarter was $75.8 million, with an average realised coal price of A$167.4 per tonne, reflecting a modest 2% decline from the prior quarter due to a lower proportion of higher-priced coking coal sales.

The company’s focus on cost control and operational efficiency is evident in the reduced production costs, which fell by $8 million compared to the previous quarter. Capital expenditure also dropped significantly to $1.2 million, reflecting the cessation of major development activities in line with the revised mine plan.

Safety and Operational Highlights

Safety remains a priority, with Bowen reporting a 17% improvement in its total recordable injury frequency rate (TRIFR), down to 3.8 on a rolling 12-month basis. The Coal Handling and Preparation Plant (CHPP) performed strongly, achieving 92% availability and 91% utilisation, processing 745,000 tonnes of ROM coal at a consistent feed rate.

Mining operations at Ellensfield South and Plumtree North continued under the low-cost, low strip ratio plan, with a blended strip ratio of 2.4, 1. The company also commenced backfilling waste at Ellensfield South to support long-term rehabilitation efforts.

Development Projects Progress

Bowen advanced its key development projects during the quarter. The Isaac Pit project is in the engineering phase, with first coal expected in late 2026. Additional drilling and geotechnical work are underway to refine resource estimates and mine planning.

The Lenton Project is progressing through a Pre-Feasibility Study and value engineering process, focusing on optimising scope, costs, and product mix. Regulatory approvals are being actively pursued, with public consultation on the Environmental Report completed and offset commitments advancing.

Meanwhile, the Hillalong Project, a joint venture with Sumitomo Corporation, has moved into the Concept Study phase, with geological modelling and washability testing supporting future development plans. The project aims to leverage existing infrastructure at Burton to reduce capital intensity and accelerate timelines.

Corporate and Governance Updates

During the quarter, Bowen underwent significant corporate changes with the appointment of voluntary administrators and receivers following financial distress. Key executives, including the Company Secretary and Chief Financial Officer, resigned but continue to support the business through the transition. The company’s securities remain suspended on the ASX pending resolution of its financial restructuring.

Despite these challenges, Bowen continues to fulfill existing customer contracts and maintain operational continuity, positioning itself to navigate the depressed coal price cycle while conserving cash reserves.