But the company did not escape the weather with saleable coal production for the six months to December 2010 adversely affected by an unusually high number of wet days, which led to a shortfall against planned production of more than 0.65 million tonnes for the half-year.

Whitehaven managing director Tony Haggarty said the company was not as badly affected as some.

“While Whitehaven’s operations were not directly affected by the devastating floods experienced in Queensland, New South Wales and Victoria, we did lose a total of 3800 operating hours across our mines during the half – almost four times the hours lost during the same period last year.”

Total significant items after tax of $68 million included $22.2 million from losses incurred on legacy contracts from both purchased coal and financial settlements and $32.2 million provision for future losses on legacy contracts.

Total coal resources for the half year increased 7% from 1632.9Mt in August 2010 to

1748.5Mt.

Marketable coal reserves increased 15% from 318.1Mt from August 2010 to 365.7Mt.

The first continuous miner production began on June 28, 2010, and second and third continuous miners were commissioned during the half-year.

A total of 81 kilotonnes of saleable coal has been produced to date from Narrabri with gas drainage successful in reducing CO2 levels below required outburst threshold.

“Ongoing gas drainage will continue to build up an inventory of drained coal ahead of production,” Whitehaven Coal chief financial officer Austen Perrin said.

“Underground mining conditions continue to be good.

“Gas drainage is working well, and mining and surface equipment working well. Gas drainage drilling along longwall number one has not identified any geological features. More than 700 people have applied for jobs, but mostly inexperienced.”

Actions by the company to address the labour problem include renewed recruitment efforts, contract labour and introduction of a fourth CM unit.

Stage 2 approval for Narrabri was granted by the NSW Government in August.

The longwall was ordered in September 2009, and delivery is 86% complete. The ventilation shaft, CHPP and other key Stage 2 facilities are well advanced.

The Stage 2 capital estimate of around $300 million remains valid following award of most Stage 2 contracts.

The combination of surface to in-seam (SIS) and underground in-seam (UIS) drill holes are being employed to drain LW development roads and panels

If the full Narrabri seam is extracted in future using top coal caving (TCC), there is potential to produce up to 35% of 7.5% ash PCI coal and 50% of 15% ash thermal coal (that is, total saleable coal yield of 85%).

The first two longwall panels will mine a 4.2 metre bottom section and will provide experience of caving and geotechnical characteristics.

Afterwards, the TCC has the potential to recover most of the 8-9 metre coal seam, increase resource recovery (+300Mt) and extend minelife.

It could also provide lower development costs and the potential to reduce development continuous miner numbers from three to one.

TCC could reduce gas management and spontaneous combustion management costs and also increase longwall production from 6Mt per annum to 9Mtpa with low additional underground capex, Perrin said.

It would need substantial capacity upgrade to surface facilities and may require washing of the full seam. The Narrabri longwall has been designed with an option to retrofit TCC during a normal longwall change-out, Perrin said.