But the recent storms in Queensland forced the company to downgrade its production forecasts, Wesfarmers Resources managing director Stewart Butel said.

“Recent high rainfall and localised flooding experienced in the aftermath of cyclone Oswald has, in late January, affected minesite production and rail and port availability,” he said.

“As a result, Curragh’s metallurgical coal sales volume is forecast to be in the range of 7.5-8 million tonnes for the 2013 financial year.

“This revised forecast is subject to no further significant wet weather and the satisfactory recommencement of rail and port operations.”

The increase in weighted average US dollar free-on-board contract prices of Curragh metallurgical coal (hard coking, semi-hard coking and pulverised coal injection) was in line with recent market price settlements, Butel said.

“In response to continuing low metallurgical coal prices and the high Australian dollar, Curragh’s immediate focus remains on cost reduction and control,” he said.

“Sales of metallurgical coal in the first half of the 2013 financial year were affected by a scheduled mine shutdown in December and lower short-term demand from traditional north Asia customers.”

Approximately 90% of the 2013 March quarter sales tonnage is forecast to be at the new contract prices, with the balance at carry over prices.

Coal production for the December quarter was 2.6Mt (comprising 1.8Mt of metallurgical coal and 859,000t of steaming coal).

It was 6.4% lower than the previous quarter due to the utilisation of lower yielding feed stocks and the scheduled mine shutdown.

Metallurgical coal production decreased by 11.6% and steaming coal production increased by 7% compared to the previous quarter, in line with domestic contractual requirements.

For the 12 months to December 31, 2012, metallurgical coal production increased 49.5% to 7.9Mt, reflecting the practical completion of Curragh’s coal handling and preparation plant in June 2012.

Overburden removal was 8.5% lower than the previous quarter due to a scheduled three-week mine shutdown over the December-January period consistent with Curragh’s focus on cost control and operational efficiency during the quarter.

Wesfarmers’ share of coal production at the Bengalla mine in New South Wales was 827,000t for the December quarter, which is 25.1% higher than the previous quarter due to operating in a more productive section of the mining sequence.