The company – whose main asset is the Cook coal mine in Queensland – also reported a net loss of $11.4 million for 2009, compared with a profit of $8.2 million for 2008.

But it has contained cash outflows during the downturn and set a sales target of 700,000 tonnes for 2010 based on increased demand and a likely increase in prices for the April 2010 contract year, managing director Mark Trevan said.

“The first half of 2009 was a difficult period for the coal industry. As the global financial crisis took hold, demand for coal fell and many buyers reneged on offtake agreements, both in terms of price and tonnage,” he said.

“Our response was to reduce manning and costs to the minimum possible while keeping a productive mining team intact and preparing the Cook mine for future expansion. In the last quarter of 2009 demand for coal increased and we have seen the recovery in coal prices continue in the early part of 2010.”

The Cook mine enters 2010 with the Argo South area established and most of the mains development required for the coming year already completed. The ABM25 continuous miner and Prairie mobile haulage system have been refurbished and relocated to Argo South.

Cost of sales was 13% lower than 2008, at $71.8 million. Cost of sales on a unit basis fell from $171/t in the first half to $131/t in the second half, of which $5.50/t was a reduction in the royalty payment due to a lower Australian dollar selling price.

Caledon is seeking opportunities to improve operating efficiencies and production effectiveness to further drive unit costs down to sustainable levels.

Significant operational achievements during the year included driveage of the new mains development roads in the Southern Argo area, implementation of safe and efficient secondary extraction methods, and the safe and effective sealing of a fully extracted panel in Argo North. Very little further mains development will be required to allow production panel development to proceed throughout 2010.

Capital expenditure at Cook was minimised in 2009 with only $2.6 million spent in total. The company spent $1.2 million on completing development of the Southern Argo access, and the balance was spent on a range of minor equipment acquisitions and replacements.

Caledon shares were untraded at 65c this morning.