In a presentation at a JP Morgan investment conference Monday, Wesfarmers said it expected significantly reduced earnings in the 2010 financial year with export coal prices down 60%.
To combat this, it has implemented “aggressive cost-reduction programs”
While timing of expansion projects will be subject to market conditions, Wesfarmers said the $A130 million Blackwater Creek diversion was on budget and on schedule for December 2010 completion.
The project will provide the existing Curragh mine with access to an extra 47 million tonnes of run-of-mine coal, about 65% of which will be high-quality hard coking coal.
The diversion will allow Curragh to continue to export coal at a rate of 7Mt per annum through to 2025.
Wesfarmers said it expected 2009-2010 production of 6.2-6.7Mt from the mine, as Curragh remained a lowest quartile cost producer.
The company said it saw positive signs of recovery in global steel production.
Wesfarmers closed up 0.25% at $25.55 yesterday.
