Queensland miner Bowen Coking Coal has moved to reduce operations at its Burton Mine Complex, shifting to an owner-operator model and cutting production in response to a downturn in global steel demand and metallurgical coal prices.

The miner, grappling with high state royalty rates and an elevated cost base, said on Monday it was actively seeking financing and that it was negotiating with creditors to weather the “depressed coal price environment”.

Mining at the Burton Complex was previously contracted to BUMA Australia, but officially transitioned to Bowen’s internal control at the start of July.

The company confirmed mining started with a smaller fleet, focusing exclusively on “low-cost, low strip-ratio production” at the Ellensfield South and Plumtree North pits. The company noted that only two excavator fleets were currently in operation – down from four – with no further waste removal planned at Plumtree North for the time being.

“This decision has not been taken lightly,” the company said in its announcement, stressing that conserving cash reserves was critical “to navigate the current depression in the coal price cycle”.

Despite capital investment of A$55-million to date in the Plumtree North development – now 90% complete – Bowen has narrowed its September quarter targets to about 500 000 t of run-of-mine coal. The reduced volume is being prioritised for export at the “lowest cost possible”, as the company expects a market recovery later in the year. However, Bowen warned that if pricing did not improve or financing could not be secured, operations at Burton might be paused altogether.

MARKET HEADWINDS
The company’s decision to scale back comes against a backdrop of turbulent global commodity dynamics. Though Platts Australia premium low volatile (PLV) free-on-board coking coal prices peaked at $195.80/t in late May – driven by wet weather and supply disruptions in the Bowen basin – they have since pulled back sharply.

As of mid-July, PLV prices had slipped to $177/t. Further, Bowen noted that “discounts for second tier HCC material to benchmark PLV HCC products remained unusually wide at about30% against a historical average of about 10%”, contributing to a contraction in operating margins across the industry.

The downturn has been exacerbated by “continued uncertainty in global trade flows”, tied to US tariff policies and geopolitical instability. A surge in Chinese steel exports, following domestic oversupply, has further pressured global steel and metallurgical coal prices. Meanwhile, seaborne metallurgical coal trade volumes were down about 14% year-on-year.

FINANCING ALTERNATIVES
With coal markets expected to remain volatile in the near term, Bowen said it was exploring a suite of refinancing and strategic options to reinforce its balance sheet. The company has appointed advisers and is actively pursuing “potential debt, equity, and hybrid solutions” to ensure ongoing liquidity.

The goal, it said, was to secure operational and growth capital, extend debt tenor, and strengthen the company’s financial position. Bowen’s unaudited cash balance as of July 11 stood at A$45-million, including A$19-million in restricted cash.

As part of these efforts, Bowen has entered into commercial negotiations with key stakeholders, including senior secured lenders, a major unsecured creditor, and the Queensland Revenue Office. These discussions were confidential and, the company acknowledged, carried no guarantee of success.

“Bowen continues to explore a range of strategic and commercial outcomes to provide the business with funding,” the company said.

Meanwhile, the company expects market fundamentals to improve when India’s monsoon season ends and steel mills begin seasonal restocking.