Revenue up 73%
No mention of Curragh sale as Wesfarmers completes feasibility statement for expansions.
Wednesday 20 September 2017
Better coal prices and significantly improved production at the Curragh coal mine near Blackwater has seen Wesfarmers report a 73.2% increase in revenue across its coal mining business.
Wesfarmers also reported some equally headline-grabbing earnings figures which before interest and tax are taken out, were up by more than $700 million, moving from a loss of $310 million last year to a profit of $405 million this year.
However, the result is not nearly as good when it’s remembered that the loss in 2016 includes a one-off non-cash impairment of $850 million - which if not included - would have meant earnings last year were around $500 million, which is better than this year's performance.
Whatever the case, Wesfarmers don’t appear to be looking to offload the Curragh mine in a hurry as has reported, instead seeking to expand when the time is right.
“At Curragh, a continued focus on productivity and a revised mine plan drove an increase in production, supplemented by the opportunistic use of contractor fleet to take advantage of higher export metallurgical coal prices,” they reported.
“We received conditional Commonwealth approval for mining leases within the MDL 162 area adjacent to Curragh and Curragh North, with a feasibility study completed for a second stage expansion to 10 mtpa export capacity.
“An Investment decision to expand Curragh will be subject to market conditions.”
Three years ago Wesfarmers paid Peabody $90 million for the Mining Development Licence 162 (MDL) which is now a conditional Mining Lease.
The area covered by MDL 162 contains about 250 million tonnes of mostly steelmaking coal, of which about 70 million tonnes is highly drilled and classified as proven and probable under JORC reporting rules.
Importantly for Wesfarmers, MDL 162 is located between the existing Curragh North and Curragh South mining operations, meaning the coal can be exploited without any new processing infrastructure