Grosvenor Mine Fire Will Tighten Met Coal Markets

Outage puts $300+/tonne levels back in play for 2024

Anglo’s Grosvenor Coal Mine in Queensland, Australia was evacuated Saturday morning (late Friday night to us US East Coasters) after a methane ignition caused a fire which engulfed the operation. Work is currently underway to pump nitrogen into the mine to choke out the fire and subsequently seal the area, but no estimates were available as to how long that would take.

The pictures I posted on Twitter from our friend RealHagetaka last night, and the smoke alert issued to the community, however, sure seem to imply it’s going to be quite a long time.

As a friend told me not all that long ago, “there are never any upside surprises when it comes to mine production.”

First, and most importantly, though, there were no injuries reported…and we can thank our lucky stars for that. However, we won’t know the initial secondary effects on the current market until tonight at the earliest.

As such, I thought it would be a good exercise to try and calculate what kind of effect an extended outage would have on the current met coal price cycle.