Felix made coal sales of 1.17 million tonnes during the March quarter, with 3.43Mt coal sales in the year to date.

Longwall production at Ashton was significantly lower during the March quarter at 156,000t as the operation mined through a hard dyke which slowed the retreat rate. This was completed last week.

Felix said production at the new longwall from May onwards is expected to be back on budget.

"With gateroad development well advanced we expect good production heading into the 08/09 year."

While contract negotiations for Ashton and Yarrabee's coal are still taking place, Felix said there was little carry-over tonnage from Ashton for the start of the new contract year.

Whilst Ashton struggled during the quarter, the Minerva opencut exceeded production targets. Felix is attempting to capitalize on this by trying to secure more rail capacity to ship out of the currently under-utilised Gladstone Port.

Demurrage continued to impact Felix in the quarter, with the company labeling the ship queue at Newcastle "unacceptable".

At the company's Moolarben development the detailed design for the mine's infrastructure is "well underway".

During the quarter Felix signed equity sales of 10% each of Moolarben to Sojitz and a Korean consortium, with sales contracts of 2.8Mtpa to Korea over the life of the mine finalised.

Felix said discussions had also commenced on sales to potential Japanese and Chinese customers.