Peabody Energy Corp cut its third quarter and full year earnings outlook because of a roof fall at one of its Australian mines where production will be halted for four to six weeks.

The company has declared force majeure at the North Goonyella mine in Queensland, meaning it cannot fulfill the terms of its delivery contracts for steelmaking metallurgical coal.

In a news release, Peabody said production at North Goonyella will be halted until early October, following the accident last month in which there were no injuries. It said the roof fall blocked the main entrance to the mine at a time when production was largely halted because of equipment moves.

Vic Svec company spokesperson told Reuters “That high quality coal is in big demand and commanding high price levels. We have declared force majeure at the mine. We are working with customers regarding resumption of operations as to when they can get the coal they need.”

Analysts said the production losses were unlikely to have a major effect on global prices for metallurgical coal. Ms Meredith Bandy of BMO Capital Markets noted the mine produces at most about 250,000 tonnes per month, which is a fairly small proportion of the global export market. However she added that “But, if it lasted for a longer period, it could have an effect on prices.”

(Sourced from Reuters)