During the three months ended December 31, Centennial produced 5.3 million tonnes of run of mine coal and 10.6Mt on a YTD basis, both up 26%.

Centennial’s equity share of coal sales totalled 4.8Mt for the quarter and 8.8Mt on a YTD basis, up 30% and 26% on the prior corresponding periods respectively.

But the company’s troubles were not all in the past, with the Tahmoor longwall producing well below expected levels with a knock-on effect on shipping schedules.

“Production continues to be impacted by limited ventilation, with CO2 gas trips halting production,” Centennial said.

“The installation of new main ventilation fans, scheduled for the end of the June 2007 quarter, should see this problem permanently resolved.”

In the meantime, Tahmoor has completed the introduction of a seven-day manning roster and increased employee numbers by 30 to help boost the production schedule.

Combined with the benefits of the new main ventilation fan, Centennial remains confident that the necessary increased production rates will be achieved.

Production at Springvale was also significantly lower than the previous quarter’s record levels due to significant delays caused by roof failures on the face and maingate roadways, but YTD production remains ahead of expectations.

Mandalong completed the relocation of the longwall from LW3 to LW4 in mid-October, returning to full production in the December 2006 quarter.

Following the announcement that Newstan will close in mid-2008, Mandalong has commenced detailed planning to raise the mine’s productive capability up to 5Mtpa, with project works due to begin in the June 2007 quarter.

Sixty Newstan employees have recently transferred to Mandalong and will replace contractors operating the third development panel in late January.

Production at Newstan was up 30% during the quarter compared to the corresponding period, and with the introduction of bi-directional shearing and the implementation of face automation, consistently higher production levels have been maintained.

Looking forward, Centennial said indications are that 2007 contract prices will be at or above the 2006 levels, driven by a continued decline in Chinese exports and increased imports – and despite significantly increased Indonesian exports and a relatively mild start to the European and North Asian winters.

While demand remains strong, most coal producers are being affected by lengthy vessel queues, but pleasingly for Centennial, 95% of the group’s exports are out of Port Kembla, where there are minimal delays.

Following the BHP Mitsubishi Alliance settlement announced in December, coking coal prices for Tahmoor are expected to achieve an average above the $US90 level, supported by the mine’s improved delivery reliability over the past 18 months, together with the prompt vessel turnaround at Port Kembla.