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　　Debt-laden US-based coal producer Peabody Energy said Thursday it expects its Australian metallurgical coal production to slide by more than half from 15 million short tons (13.6 million mt) in 2016 to 7 million st in 2021.

　　"While the Australia thermal platform continues to produce suitable margins, the met platform continues to lag despite the assumed pricing uplift over [the five-year business] plan, reinforcing the need for strategic optimization of the segment," Peabody said in a statement.

　　Its business plan was approved by lenders overnight.

　　Peabody said in the plan that it expects a clean cash cost/mt for its metallurgical coal of A$84.66/mt in 2016, which is expected to dip to A$82.91/mt in 2019 before rising to A$91.78/mt in 2021.

　　Its margin over the same period is expected to go from minus 8% to 5% and then 8%, which compares with thermal coal margins of 19%, 12% and 23%.

　　The miner said it forecasts seaborne metallurgical coal demand to increase by nearly 20% through to 2021 driven by India and China, while export supply is estimated to increase by roughly 15% led by Australia and Russia.

　　Low metallurgical coal price and capital constraints may force some mine closures over the five years and defer new supply, which could bring supply and demand closer to balance, Peabody said.

　　Its Australian metallurgical coal mines may face an early suspension of mining activities if there is a continued low-price environment and increasing strip rations, it added.

　　Peabody's Australian metallurgical coal sales totalled 15.7 million st in 2015 at an average $75.04/st. It expects the price to rise to $95/st in 2017 and to $123/st by 2021.

　　Peabody in April announced it had sought protection from creditors for most of its US entities and was approved for $800 million Deptor-in-Possession financing in May.

　　It said its Australian mining assets were not part of the US bankruptcy protection, and were continuing to operate normally.