September 07, 2008

Gloucester Coal quarterly sale hit by capacity constraints

It is reported that capacity constraints at the Port of Newcastle in New South Wales continue to affect Gloucester Coal Ltd's sales of coking and thermal coal.

Gloucester Coal reported a 2% lift in total coal sales to 497,000 tonnes for the first quarter of fiscal 2008 with a slight bias towards coking coal sales compared to 488,000 tonnes for the previous corresponding period. Production from the company's four pits was 6% lower to 763,000 tonnes, primarily due to a decline in co disposal mining which involves mixing waste rock with tailings.

Gloucester Coal said "Changes in the mix of coal from each of the company's mines reflect the continued optimization of operations through the blending of coal, and a focus on the production of the higher value coking coal during times of port capacity constraints."

However, it said that customer’s off take are still strong and it expects offshore vessel queues to fall in the months ahead. Gloucester Coal said "The capacity allocation system has gradually reduced the queue from previous highs, resulting in a welcome fall in demurrage costs incurred by the company."

Gloucester Coal is focusing on growth opportunities outside the Gloucester Basin and expects to release a significant reserve upgrade in early 2008. Its plan to increase production to 2.8 million tonnes in the 2010 fiscal year is proceeding on schedule.