In the director’s report for 2008 released today, Coal & Allied chairman Chris Renwick discussed the move away from potential greenfield and brownfield project developments.

“Given some current uncertainties in global markets, our priorities are now focussed on maximising cashflow and managing our costs until such time as there is greater confidence in the market outlook and rail-port infrastructure capacity to support the further development of our extensive reserves and resources,” Renwick said.

While acknowledging an engineering feasibility study last year deemed its Mount Pleasant thermal coal project “economically attractive”, he said greater certainty of supply chain infrastructure was required before COAL & Allied committed to development of Mount Pleasant – next to its Bengalla open cut mine in the Hunter Valley.

Such a change could be brought about by the implementation of a New South Wales government terminal access framework to build a fourth coal-loading terminal on Kooragang Island at the Port of Newcastle, offering producers the ability to commit to long-term terminal contracts.

Renwick said the state government intends to have the scheme in place by mid-year.

He also noted the federal government had announced $A1 billion of funding for the Australian Rail Track Corporation to increase rail capacity in the Hunter Valley, and the current expansion of Newcastle’s port to 113 million tonnes per annum capacity is due for September completion.

Reserves

Coal & Allied’s 65%-owned Mount Thorley and Warkworth operations have combined proved reserves of 272.5Mt of thermal and metallurgical coal, and combined probable reserves of 189.9Mt.

The company’s wholly owned Hunter Valley operations have 390Mt of proved thermal and met coal reserves and 94.1Mt probable reserves.

With its 40%-owned Bengalla thermal coal mine, the company has 93.8Mt of proved reserves and 81.1Mt of probable reserves.

Rio Tinto has a 76% stake in Coal & Allied, and shares in the Hunter Valley producer traded up $1 today to $71.