Soul Pattinson’s resource subsidiary New Hope Corp (NHC) has again cut coal output further at its West Moreton operations in Queensland because of the continuing weakness in the global coal market.
That was after production fell 20% in the three months to the end of April to 2.5 million tonnes with production of saleable coal down 24%, the company told the ASX yesterday in its third quarter production and sales report.
Sales remain fairly solid and the cuts in production are enabling New Hope to further trim its stocks of unsold coal.
Full NHC Quarterly Activities Report
New Hope said in a statement to the ASX yesterday that production had now been reduced to 700,0000 million tonnes annually from 1.1 million tonnes rate after it moved to a five day a week operation from six days at the Jeebropilly mine. This comes on top of the earlier shutdown of mining at the Oakleigh colliery.
Production levels at the larger Acland mine continue at an annual rate of 4.8 million tonnes it said.
The company described present conditions in the coal market as "difficult".
The cut in production could cut the company’s revenue by more than $30 million annually if it it is sustained.
Actual coal sales, however, eased by just 2% to 1.57 million tonnes with the transport delays on the back of bad weather previously, made up during the quarter, it said.
Stocks rose because of the global problems and strikes and rail disruptions earlier in the quarter, New Hope told the ASX.
In the six months to January this year, New Hope produced 3 million tonnes of clean coal (meaning it has been washed to reduce the ash and other impurities), down 5.2%. Sales fell 13.4% to 2.7 million tonnes. "Export sales were lower than the record figure in the previous corresponding period due to deferrals in customer shipping schedules," the company told the ASX in the half year report in March.
As well, the high Australian dollar has cut profit margins. New Hope shares eased 3.7% to $3.61, a fall of 17c on the day.
NHC 2Y Chart – Coal market ‘difficult’
