Dry miner looks to cash in on spot prices Mathew Murphy

January 28, 2011

GLOUCESTER Coal has capitalised on its status as one of the only coal companies largely unaffected by recent heavy rainfall, posting a record quarter for coking coal sales.
The NSW-based company sold 222,000 tonnes of coking coal, used in steel-making, a 49 per cent increase on the December 2009 quarter. Thermal coal sales receded 8 per cent, from 295,000 tonnes to 272,000 tonnes as Gloucester cancelled fixed Australian dollar forward sales contracts in order to take advantage of rising prices.
Gloucester said it was hoping to cash in on soaring spot prices for coking coal, a consequence of the number of coalmines under water.

''The company continued to seek to maximise production and sale of coking coal while maximising total output by topping up with exports of thermal coal,'' it said in a statement.
''The effects of flooding in Queensland's Bowen Basin is manifesting itself in rapidly rising coking coal prices. The company is yet to agree [on] its coking coal pricing for the January-March 2011 quarter, however a substantial increase in price is expected.

''In addition, the company has an uncontracted volume of coking coal available for sale during the quarter and as such should be well-positioned to benefit from the surge in spot prices.''
The chief executive of Gloucester, Barry Tudor, said production would ramp up quickly following the approvals received at its Duralie and Stratford operations.
''[The projects] are important steps towards increasing the Gloucester Basin product coal output up to 3.5 million tonnes per annum by 2014,'' he said. Gloucester shares fell 5¢ to $12.90. (sourced:smh.com.au)