Sandstone intrusions into the Pittsburgh seam have brought production down by 550,000 tonnes over the past two months. The setback will see Foundation fall 600,000t short of its full-year estimate of 6 million tonnes.

Additionally, plans for the installation of a second longwall face at Emerald, slated for the fourth quarter of this year, have been postponed, and a new target date of January 2008 set.

Company spokesman Peter Vietti told ILN that staffing would not be affected by the production shortfall, and the mine's continuous miner sections will not be ramped up to meet the missing tonnes.

Regarding the geological intrusions, he said, "It was known that there was sandstone, so it was known that we were going to encounter it."

What could not be anticipated, he added, was the impact it would have on production and its planned expansion efforts.

In the meantime, Emerald's conditions are starting to even out as mining moves away from the geological issues, and its planned longwall move for the fourth quarter is still on schedule.

"In order to address these geological conditions in mining the next panel during 2008, Emerald plans a mid-panel move of its primary longwall mining system designed to circumvent the affected area," officials said.

"Additionally, the second longwall at the Emerald Mine is expected to be available throughout most of 2008.

"Based on the operation of two longwalls beginning in 2008, the company now anticipates future production levels from Emerald to be substantially higher than the annual production originally planned for full-year 2007."

The production shortfall's impact on Foundation's finances, the producer said, will be detailed in its quarterly results expected this month.