Peabody Australia has recorded a $2.7 billion loss in 2015.
Peabody Australia has recorded a $2.7 billion loss in 2015.

LISTEN: Mining giant had "strong year" but lost billions

UPDATE 1.50PM: PEABODY Australia generated 33% higher gross profit in 2015 than the year before, despite also recording a loss of $2.7 billion the same year.

A spokeswoman told the Daily Mercury today that the majority of the loss came from impairment write downs, that were consistent across the industry due to the reduction in commodity prices.

She also said Peabody in Australia had a strong year in 2015, with the highest operational cash flows since 2012, equal highest gross profit since 2012 and a generation of $204.3 million in gross profit, an increase of 33% from 2014.

 "Peabody is committed to the Australian platform as a core region where we are one of the world's largest suppliers of high-quality seaborne coal for electricity generation and steelmaking," she said.

Peabody Australia is not part of the Chapter 11 bankruptcy protection process.

 

UPDATE 11.10pm: Workers across Peabody Australia's six Bowen Basin mines should be 'wary', but should not panic following the company's $2.7 billion loss in 2015.

That's the advice from CFMEU district president Steve Smyth who has been told it's "business as usual" in Australia for the world's largest privately owned coal company.

But he said given the "strange nature" of mining company's, workers should be wary, particular given the US arm of the company filed for chapter 11 bankruptcy earlier this year.

 

LISTEN: Steve Smyth explains why Peabody workers should be wary

 

 "They would have forecast the loss this year. (But) who's to know what Peabody may do, (it) may even look at using this as an excuse to offload some of their permanent employees and restructure," he said.

" I'm not saying they're going to do that, but a number of things could happen as a result of it. People just need to be wary of that."

Other media reported that due to the loss and the state of its US assets, the company cannot draw on some borrowing options.

While Mr Smyth said he "did not pretend to know too much about their financial arrangements" he said losing liquidity would clearly be an issue  when it came to paying off bills and debts.

" But I do know that obviously Peabody from an Australian perspective are producing coal at record levels and they've had some relief here in Australia the price (of coking coal) has increased, costs have reduced," he said.

"But you don't know coal companies are a very strange beast to deal with. They do what they want to do unfortunately because the law allows them to do it."

Despite the size of Peabody, Mr Smyth believed the $2.7 billion loss would still come as a significant blow.

"Any loss is a loss but particularly for Peabody because they are the world largest privately owned coal company," he said.

"They only deal in coal."

 

EARLIER: Peabody Australia has increased it losses to $2.7 billion, according to documents lodged with ASIC.

The losses increased in 2015 because of further weakness in the industry. 

Of more concern is the warning from the company that market weakness since December and Chapter 11 reorganisation meant the company could not draw on some borrowing options and threatened the company's liquidity. 

Australian media has reported that Peabody was in negotiations to secure cash flow.

"Some interim arrangements have been agreed and other commercial negotiations are ongoing," Peabody Australia said.

One of Peabody Australia's directors was in  Mackay last week and although he declined to talk to media, Queensland Resource Council chief executive officer Michael Roche dismissed fears for the company's Australian assets, instead citing American Airlines as an example of a company that filed for Chapter 11 and recovered. 



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