BHP slashes Hunter value
BHP has slashed millions from the value of its NSW Hunter Valley thermal coal mine.
BHP has cut hundreds of millions of dollars from the value of the Mt Arthur thermal coal mine in the Hunter Valley, meaning it now considers the project a liability.
The mine is the largest operating coal mine in New South Wales. It was worth $2 billion just a few years ago, before its value was reduced by more than $1 billion in January, and another $200 million in recent days.
BHP chief financial officer David Lamont says the downgrade reflects “rehab and restoration” commitments.
BHP is halfway through a two-year process to find a buyer for Mt Arthur, but some believe the company left it too late to sell.
“I would just say we are where we are and so I don't really want to get into revisiting the past because there were obviously factors that we considered at that time,” BHP chief Mike Henry says.
“We're recognising some of the complexities in a divestment like this.
“We did give ourselves two years at the time that we announced this one year ago, so there was clear recognition that there was a process to be undertaken and all options remain open for consideration.”
Resource analyst Rory Simington has told ABC reporters that the asset write-down shows BHP seea an uncertain future for thermal coal.
“BHP have made a decision to exit thermal coal and I think they would be expecting to see lower coal prices going forward as a result of lower demand,” Mr Simington said.
“They see the thermal coal market as being in decline.
“Over the past few years, BHP's costs at Mt Arthur have increased quite substantially. That's been another driver.”
The write-down comes just months after BHP sold its stake in Colombia's Cerrejon coal mine to Glencore.