For the September quarter, WC earned $C2.2 million on sales of $107.6 million. Net income for the first half of the year was $5.6 million on sales of $183.3 million.

The ongoing impact of the recession has resulted in a 55% decrease in revenue year-on-year, which Western Coal said was reflected in the sales price drop – due to lower sales contract prices – and offset in part by a higher sales volume.

For fiscal 2010, contract prices are $US126 per tonne for hard coking coal and $90/t for ultra-low volatile PCI, versus $300/t and $248/t respectively for fiscal 2009.

Production for the second quarter was 97,000 tons less than a year ago, which WC said was related to a production rate adjustment at its Canadian operations instituted as a response to the economic downturn.

By type, hard coking coal increased 12,000t year-on-year. While staff numbers dropped at the Wolverine mine, WC cited improved equipment availability, increased overall activity and a lower strip ratio for the result.

However, low-volatile PCI production, from the Brule mine, was down 109,000t year-on-year, due to lower PCI demand.

"We continue to make strong progress on lowering our mining costs to the lowest level in years,” company president John Hogg said, noting that the lower cost structure should generate higher returns in the wake of higher coal prices next year.

“We continue to meet the increasing demand from our customers; considering the strong demand, constrained supply conditions and the impact of the weaker US dollar, we expect next year's coal contract prices to be significantly higher. Layer in our plans to aggressively grow our operations and reduce our costs, and we are quickly delivering on our plans to become a premium mid-tier international coal company."

The operator highlighted the safety performance of its mines in the US, which earned the Sentinel of Safety Award and the Joseph Holmes Safety Certificate of Honor.

“Since the current operations at West Virginia have been restarted in 2006, each operation has earned at least one major safety award,” the company said.

“Likewise, the team at the Willow Creek mine earned the Stewart O'Brian Safety Award, which marks the sixth consecutive year that one of the Canadian operations has earned a major prestigious safety award.”

Looking ahead to the remainder of the fiscal 2010 year, WC is anticipating higher cash flows than in the first half as shipment levels rise and costs fall.

The company now expects to ship 1.3-1.4Mt from its Canadian operations at $US115-118/t with cash costs of $C95-100/t.

For the same six-month period, US operations should ship 650,000t at an average price of $US80-85/t under an average $US70-75/t cash cost.

The company’s properties in West Virginia have realized increased market demand for met product, and contracted met coal shipments are expected to increase by 45% in the second half of the fiscal year. Thermal coal, meanwhile, should remain steady against first-half shipments.

“It is expected that increased metallurgical coal demand will enable some of the premium thermal coal produced at Gauley Eagle to be sold into the high-vol metallurgical coal market during the second half of fiscal 2010,” the company said.

“Production capacity is already in place at the Gauley Eagle and Maple mines to meet the increased demand for the company's metallurgical coal.”

In the meantime, all fiscal 2010 coal production for WC is under contract to be sold internationally to steelmakers. Prices average $US126/t for hard coking coal and $US90/t for ULV-PCI output.

Western Coal has appointed Keith Calder as president, chief executive officer and director of the company effective December 1.

Calder will replace John Hogg when he retires on November 30.

WC said Hogg would step down from the board at the end of November as well, but would stay on as a senior consultant to the company.

Calder, a graduate of Michigan Technical University, has been based in Vancouver since 2007, where he served as managing director of Rio Tinto's copper projects.

“We expect Keith to drive the next stage of the company's growth which aims on delivering over 10 million tonnes of coal per year," the company said.

Calder added: “The merger of Western and Cambrian created an impressive platform from which to grow the business. Western is very well positioned to benefit from what is now a truly international asset base and we are targeting significant growth over the next three years.”

Hogg, a 45-year industry veteran, has been with WC for the last six years, first as chief operating officer and later as president and chief executive officer.