|
Wednesday, January 7, 2009
|
|
|
|
Temp:
|
-8°C
|
|
Feels like:
|
-13°C
|
|
Humidity:
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal prices push profit |
|
|
Written by GORDON HOEKSTRA
Citizen staff
|
|
Friday, 14 November 2008 |
Western Coal posted record sales and profits of $44.7 million in the three months ending in September, a result of strong cash flow from operations and continued debt reduction.
in the first six months of its fiscal year, which begins in April, the company has had a profit of $104.5 million.
The increase in profits for the northern B.C. mine, about 200 kilometres north of Prince George, was a result primarily of higher coal prices.
"The company's strong financial position is underlined by the $126-million increase in its working capital position since year-end," said Western Coal executive chairman John Byrne.
"The Company has repaid $31 million of bank debt and its financial strength provides the company with the flexibility to adjust production to mirror demand," said Byrne. "As a consequence, production levels for the coal year commencing April 2009, will be set to meet global metallurgical coal demand and the corresponding market prices."
All of the company's coal sold in the second quarter of its fiscal year was priced about $300 US per tonne for hard coking coal and $248 US per tonne for ultra low-volatile coal. These prices are more than double the price a year ago.
The company did experience a decline in coal production, and an increase in mining costs, primarily due to having to strip more waste rock a its Wolverine and Brule mines. The company said the higher costs were also exacerbated by chronic labour shortages and abnormally high fuel costs.
Western Coal said, however, that adjustments have been made to the its mine plan and expects to recover the production shortfall by the end of the fiscal year next spring.
Due to the global economic uncertainties, the company is developing a cash preservation plan which includes reviewing all discretionary spending on equipment, buildings and other materials for the remainder of its fiscal year.
Western Coal was started to tap into a surge in world coal demand by taking advantage of already-proven coal resources in northeastern B.C., as well as using excess railway and port capacity at Prince Rupert. All the coal travels through Prince George.
The Tumbler Ridge area has a rich coal mine history. Three years ago, the Bullmoose coal mine closed, ending two decades of coal mining in the region. Two years earlier, the larger Quintette Coal Mine closed.
 |
|
Last Updated ( Friday, 14 November 2008 )
|
|
|
Who's Online
We have 187 guests and 12 members online
|
|
|
|
Subscribe to this comment's feed
