S&P/ASX 200 Index (ASX: XJO) coal shares are smoking hot today.
How hot?
Well, at the time of writing, the ASX 200 is down 0.46%.
But don't blame the big Aussie coal shares for that retrace.
Here's how these three leading coal stocks are performing at this same time as we head into the Monday lunch hour:
- Whitehaven Coal Ltd (ASX: WHC) shares are up 6.8%
- New Hope Corp Ltd (ASX: NHC) shares are up 3.8%
- Coronado Global Resources Inc (ASX: CRN) up 10.1%
Now, none of these companies have released any price-sensitive information.
So, what's spurring investor interest?
ASX 200 coal shares lift on Anglo's woes
Investors look to be snapping up ASX 200 coal shares today after Anglo American (LSE: AAL) reported that it has suspended production at its Grosvenor metallurgical coal mine in Queensland.
Metallurgical, or coking coal, is primarily used for steel making, as opposed to thermal coal, which is mostly used to generate electricity.
The global miner, the subject of a recently rejected takeover offer from BHP Group Ltd (ASX: BHP), said it is halting work after an underground coal gas ignition hit the mine on Saturday.
Anglo American's workers were all safely evacuated from the mine without injury.
Its mine team is now working with specialist teams from the Queensland Mines Rescue Service and the regulatory authorities to extinguish the underground fire.
Once that's out, management will assess the steps towards a safe re-entry into the mine. Due to the likely damage underground, it is expected these procedures will take several months.
But some industry insiders fear that may be optimistic. Fears which look to be benefiting ASX 200 coal shares today.
As ABC News reports, Mining and Energy Union industry safety and health representative Jason Hill said workers were being sent home indefinitely, with some fearing the Grosvenor coal mine might never reopen. The mine has previously recorded high gas levels during routine monitoring.
What's at stake?
As for what's at stake for the ASX 200 coal shares, Anglo American's steelmaking coal business is forecast to produce around 8 million tonnes of product in the first half of 2024. The Grosvenor mine is expected to contribute some 2.3 million tonnes of that total.
Looking at the full 2024 calendar year, Anglo's production guidance for its steelmaking coal business is 15 to 17 million tonnes, of which Grosvenor was expected to contribute around 3.5 million tonnes. That Grosvenor guidance already represented lower production in the second half of 2024 due to a planned longwall move.
Still, the Grosvenor fire means that 1.2 million tonnes of Aussie coal now might not hit the markets in the second half of the year. And the outlook for 2025 remains uncertain.
Anglo American said it would update the market on its steelmaking coal production guidance once more information is available.
As for today, investors appear confident that the ASX 200 coal shares could benefit from the Anglo's production hit.
