A higher than average number of wet weather days was experienced throughout the quarter. This constrained potential output from mining operations and limited irrigation opportunities to reduce stored water levels.

Due to the impact of the delays on mining, the company expects annual production for the 2011 fiscal year to be the same as last year’s at 1.9 million tonnes, but it remains confident of increasing the Gloucester Basin product coal output up to 3.5Mt per annum by fiscal year 2014.

Gloucester Coal chief executive Brendan McPherson said the Duralie extension project and associated modifications at Stratford were important steps toward increasing the Gloucester Basin product coal output up to 3.5Mtpa by 2014, including up to 2Mtpa of coking coal, which would add significant value to the company.

During the quarter, Gloucester made progress towards restoring pit inventories which were adversely affected as a result of the delays in the Duralie and Stratford extension approvals.

In December, the company obtained the relevant project approvals at the Duralie and Stratford operations to allow access to Clareval Coal and advance the Bowen Road North pit cutback.

The introduction of Clareval Coal into the Gloucester blend is expected to improve the product mix by producing a greater proportion of coking coal with higher value attributed to higher coal quality and an improvement in total CHPP yield, McPherson said.

Despite the impact of the extension approval delays, total material movement (waste and raw coal) for the quarter was 4.026 million bank cubic metres compared to 3.118 million bcm in the previous corresponding period. The increase in material moved reflects additional equipment and labour to support the planned expansion and a rapid recovery from suppressed volumes following delays to approvals.

The planned production ramp-up from the development of the new Clareval seam at Duralie has commenced, with the first Clareval coal mined and railed for processing in February.

Accelerated haul road construction and supporting environmental works achieved fast access for the development of the Clareval box cut to expose the first Clareval coal and develop pit inventory.

The requirement to re-establish mine advance, undertake development works in the Clareval pit and ensure a rapid recovery from the confined operations at Wiesmantel as a result of the Duralie extension approval delays delivered record total movement volumes in March.

Mining operations in the Bowen Road North pit were advanced into the highwall cutback area after receiving approval at the end of the second quarter. Excavation of the cutback material began early in the quarter. Extra labour was employed during the quarter for additional rostered time within the consent limits to accelerate the volume recovery.

Roseville West pit development continued and ROM coal production increased above the December quarter levels as strip ratios reduced, reflecting development progressing past the weathered zone.

Coking coal sales were 196,000t for the quarter compared to 207,000t for the previous corresponding quarter, a decrease of 5%. The tsunami in Japan led to a softening in demand for coking coal.

Sales of Gloucester thermal coal of 300,000t were lower than sales in the last March quarter of 322,000t. Thermal coal sales were affected by lower coal volumes resulting from delays in the Duralie and Stratford extension approvals and a focus to maximise coking coal recoveries from the coal handling and preparation plant. This focus came at a cost to total plant yield.