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Peabody still cash positive in Australia

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Report summary

With Peabody Energy's election to file for Chapter 11 bankruptcy protection in the US, comes speculation about the future of its Australian coal assets. We expect the most likely path forward for Peabody is to continue to operate its 10 Australian mines on a business-as-usual basis as our analysis suggests their average cash margin remains positive in 2016. While we forecast several of Peabody's Australian assets to run at negative cash margins in 2016, we expect Peabody will continue to operate these assets due to take-or-pay rail and port commitments and other fixed costs.

What's included

This report contains

  • Document

    Peabody still cash positive in Australia

    PDF 346.58 KB

Table of contents

  • Executive Summary
  • Cost reductions reduce the margin squeeze
  • Take or pay obligations incentivise continued operation
    • Benchmark break-even prices
    • Peabody Australia costs

Tables and charts

This report includes 6 images and tables including:

Tables

  • Peabody still cash positive in Australia: Table 1
  • Peabody still cash positive in Australia: Table 2

Images

  • 2015 Margin curve
  • 2016 Margin curve
  • 2016 Benefit of continuing to operate
  • 2016 Potential margin assuming no fixed transport cost

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