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United States : Macarthur Coal June quarter production falls.

Macarthur Coal has reported an 11 per cent fall in coal sales in the June quarter against the previous corresponding period, but has achieved a sales record for the June 30 financial year.

Macarthur, the world's largest producer of low volatile pulverised injection coal, has announced that total coal sales were 1.32 million tonnes in the quarter, against 1.48 million tonnes in the June 2009 quarter.

It said the June 2009 quarter was a sales record due to the sell down of coal stocks to non-traditional utility customers during the global financial crisis. But sales for the full year were ahead 15.3 per cent from 4.61 million tones to 5.32 million tonnes.

Macarthur Coal shares defied early weakness to close 0.46 per cent higher at $12.98, though underperformed a 0.7 per cent rise in the broader market. The company described the latest production results as a significant result for the company, especially given the economic environment at the beginning of the financial year .

The improvement on an annual basis can be attributed to improved economic conditions during the financial year, a sell down of high opening coal stocks, increased production at both mine sites, and the utilisation of excess infrastructure capacity through the Goonyella corridor.

Macarthur Coal said sales in the June 2010 quarter were stronger than expected, largely due to improved loading performance at the Dalrymple Bay Coal Terminal, which led to the loading of vessels earlier than scheduled during the month.

This resulted in total sales from the Coppabella and Moorvale Joint Venture (CMJV) increasing to 5.26 million tonnes for the year. Taking into account a small amount of Middlemount Coal sales, total sales for the year ended June 2010 reached 5.32 million tonnes.

This was ahead of the guidance range of 4.8 million tonnes to 5 million tonnes and an increase on sales achieved in the 2009 financial year of 4.6 million tonnes.

Demand for metallurgical coal remained robust during the June 2010 quarter, with the continued gradual recovery in pig iron production, notably in China. Demand for LV PCI coal also continued to be strong due to the steel producer's focus on costs of production and the continued shortage of seaborne coke.

Following a weather impacted March quarter, improvement in coal chain performance was achieved during the June quarter. Improvements in rolling stock reliability and a more structured and coordinated planning process contributed to increased throughput during the period.

Macarthur Coal also said it had appointed Graham Yerbury to the position of chief financial officer. Mr Yerbury was CFO for Arrow Energy Limited. Earlier this week, Macarthur announced it had scrapped a $110 million deal with one of its major shareholders, CITIC Resources, on insufficient shareholder support. The deal related to CMJV.

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Date:Jul 28, 2010
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