Record profitability and production for Austral Coal in 2002 has put the company in a favourable position to underpin major outgoings for the development of the Tahmoor North mine.
Considerable capital expenditure laid out this year to realise the company’s aspirations of doubling productive capacity at the New South Wales Tahmoor North reserves, was fractionally offset by the $13.4 million profit announced earlier this year.
Net profit was up $9.2 million on the back of a 30% increase in ROM mine production which lifted to 2.130Mt. High production levels were partly achieved through record low down times and mining disruptions on longwall operations.
To get the ball rolling on capital expenditure, Austral Coal originally conducted a share placement and share issue which raised approximately $30 million towards the development of Tahmoor North.
A project loan amounting to $76 million was then taken to underpin the purchase of a longwall system. The syndicated facilities agreement which provided the loan comprised of significant shareholder Rothschild, ANZ and HSBC and was partially guaranteed by Hermes.
Last year $26 million was spent on two new 12cm30 continuous miners and the rehabilitation and installation of the main north-west belt system for Tahmoor North.
It was also a big year for equipment and service contracts for infrastructure including the purchase of a new longwall system from DBT and longwall shearer from Joy Manufacturing, valued in excess of $55 million.
A washery upgrade totalling $7.5 million was signed with Roberts & Schaefer Australia and a $30 million, 19 month development contact was entered into with Roche Mining.
Total expenditure on infrastructure is estimated to approach $123 million, in-line with earlier predictions by International Mining Consultants in 2002.
New equipment installation and commission will provide a few bumps in the road for Austral Coal this year, with longwall continuity disrupted by development delay resulting from increased grunching in the first half of the year and production outages resulting from the washery upgrade in May and June.
Also impacting negatively this year has been the softening of the coking coal market and the increase in the Australian dollar.
Pendal said although price falls would impact on revenue, it was predicted and had been incorporated into the company budget.
“More recently the increase in the Australian dollar above 60 cents will reduce revenues however as reported a significant portion of the year’s revenues are hedged at rates under 60 cents, so on balance the average for the year should not be too far from our budget rate of 60 cents,” he said.
