Gujarat flags profit slump
23 May, 2012 04:00 AM
One of the region’s biggest coal miners has experienced a 60 per cent profit slump after a year of operational upheaval.
Gujarat NRE Coking Coal Limited informed the Australian Stock Exchange this week it expected to record a $9.77million net profit after tax for the 2011-12 financial year compared with $24.64 million the previous year.
Lower production volumes contributed to the result, with production restricted to just above one million tonnes after workers who should have been extracting coal were diverted to help get critical new longwall mining equipment online at Russell Vale.
The company also pointed to ‘‘adverse geological conditions on a few occasions’’.
The ASX statement also contained a long-term production forecast of more than five million tonnes of coal per annum by 2016.
The company has previously said it was on track to achieve six million tonnes per annum by 2015.
The preliminary results also revealed total revenue of $184.6million, a 19 per cent reduction from the previous year’s $227.4million.
About 600 people are employed at Russell Vale and Wongawilli.
In March, the Department of Primary Industries ruled the company could use $90million worth of new longwall mining equipment in one underground panel at Russell Vale. Approval to mine a further 20 panels rests with the NSW Department of Planning and Infrastructure.
The company said longwall mining at both mines would ‘‘not only increase the total production of coking coal from both the mines but would also considerably reduce the per tonne cost of production’’.
Meantime, the board of Gujarat’s Indian parent company, Gujarat NRE Coke Limited, last week agreed to seek shareholder permission to issue its Australian subsidiary with a guarantee or provide securities of up to $100million.
The ASX announcement did little to lift Gujarat’s share price, which closed yesterday at 16¢.
- Sourced from Illawara Mercury