Even owner didn’t see it coming
CURRAGH sale speculation grows following surprise result.
Wednesday 18 January 2017
Record coal prices, the use of contractors, better weather and a revised mine plan at the Curragh mine near Blackwater have helped owner Wesfarmers to deliver a $130 million before tax profit for the three months leading up to Christmas.
The result way exceeded Wesfarmers own expectations for the quarter when they released their production figures in November last year.
At that time an unusually wet spring and a seven-day shutdown of the CHPP for maintenance work had slashed coking coal production by 24 percent.
That huge fall in production meant around 50% of Curragh’s export metallurgical coal sales for the last three months was expected to be “carryover tonnage” - sold at prices set before the current record highs arrived after August.
“As a result, the resources business is expected to report a broadly breakeven earnings subject to production, weather events, shipping and currency,” they said at the time.
Fast forward to now, and there has been a huge turnaround.
“The better than expected earnings result reflects strong production in the second quarter,” they said in their quarterly results released this week.
“This improvement comes from a productivity review, a new mine plan, and opportunistic use of a contract fleet to further increase volumes to take advantage of attractive coal pricing.
“This increase in production supported higher than expected sales volumes aided by improved shipping timing and higher realised prices for both Curragh and Bengalla.”
However, despite the improvements in the last three months of the year, total metallurgical coal production decreased by 14.4 percent to 7.2 million tonnes and steaming coal production by 1.9 percent to 3.3 million tonnes in 2016.
The company again spent nothing on exploration and development.
Nonetheless, the strong result has the rumour mill running hot about an imminent sale of the mine.Curragh first said it was open to offers around September last year, and since that time some possible buyers have been linked to the mine - but none has been confirmed by Wesfarmers.