Flooding hits New Hope coal shipments

March23,2011 12:00AM
By Sarah-Jane Tasker,The Australian

QUEENSLAND coalminer New Hope has reported a jump in its first-half profit to $407.4 million, but widespread flooding is still affecting its shipments.

According to the company, the healthy profit was driven by the sale to Royal Dutch Shell and PetroChina of its 16.7 per cent stake in Arrow Energy, which added a one-off $326m to net profit.

Excluding this benefit, net profit in the six months to the end of January fell 27 per cent to $81.1m, on the back of increased costs, Queensland flooding and a strong Australian dollar.

The miner, which operates three mines in Queensland, said although the heavy rainfall in December and January had only a limited effect on mining operations, damage to the Western Rail Line servicing flagship project New Acland had prevented shipment of coal from that mine.

It said rail transport from New Acland had been curtailed for about 2 1/2 months but was expected to resume later this month.

New Hope has ramped up production at its West Moreton operations and increased truck haulage levels from New Acland.

According to the company, this year's second-half result will be harmed by the unavailability of the Western Rail Line and the flow-on effect to exports from New Acland. It added that revised full-year sales forecasts were expected to be in the range of 4.8-5.2 million tonnes.

Clean-coal production for the half year, fell 2 per cent to 2.8 million tonnes.

The Bureau of Meteorology warned yesterday that the area in southeast Queensland where New Hope has its operations had a 70 per cent chance of higher than median rainfall in the three months to the end of June.

Despite the weather, New Hope managing director Rob Neale said the miner had increased export sales during the first half by 23 per cent to 2.7 million tonnes.

"As a result, we are in a good position to take advantage of firming coal prices once transport infrastructure in the region has been repaired," he said.

"Recent acquisitions in both the coal and energy sector complement a very strong balance sheet and provide New Hope with a solid platform for growth in the short to medium term."

The company was positive on the outlook for the price of thermal coal, with contract negotiations between Swiss giant Xstrata and Japanese power generators to start in the next few weeks.

It is understood Xstrata representatives were in Japan ready to start talks just after the Japanese earthquake and tsunami, which have stalled discussions.(sourced Theaustralian)