Corsa counts cost of reduced coal demand

TSX-LISTED coal producer Corsa Coal has lowered its production guidance for the beginning of 2012 on the back of reduced coal demand generated from unstable economic conditions.
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Courtesy Corsa Coal.

Lauren Barrett

The company finished up the 2011 financial year adding a number of acquisitions to its asset base, including the purchase of the Alumbaugh property and the Casselman underground mine, which has an indicated resource of 16.2 million tons.

Corsa Coal sold 252,000t of metallurgical coal during the 2011 financial year and 142,000t of thermal coal.

The miner produced 201,000 raw tons of metallurgical coal.

About 164,000t of total metallurgical coal for the year was yielded from its surface mines, while 37,000 was produced from its underground mines.

The company also purchased 238,000t of metallurgical coal in fiscal 2011 from third parties.

Corsa Coal chief executive officer Don Charter said the 2011 fiscal year had been a year of many achievements.

“We are very pleased with our performance and achievements in our start-up year with met coal sales of 252,000 tons, five surface mines in production (soon to be six), the purchase and successful start-up of the Casselman underground mine and the successful start-up of our coal processing plant,” Charter said.

Charter said the slowdown in the industry during the fourth quarter had continued into the first quarter of 2012.

Despite this, the company will continue to expand its business.

“We continue with the expansion of our mining operations at the Casselman mine and property acquisitions as evidenced by our recent purchase of the Keyser property,” Charter said.

The economic slowdown however shadowed Corsa Coal’s growing ambitions, announcing it expected coal sales to be 65,000t in the 2012 first quarter, down from an anticipated 90,000t.

Corsa Coal said it has reduced its surface mine production and third party coal purchases in the quarter to meet these lower demand levels.

The company has decided against reducing production at the Casselman underground mine as it continues with its expansion.

“With improved mine productivity and the three continuous mining units operating by the end of 2012 fiscal year, the company expects to have the capacity this year to produce between 405,000 to 455,000 raw tons of metallurgical coal from this underground operation,” the company said.

On a combined basis the company expects to have the capacity to produce between 695,000 to 765,000t raw tons of metallurgical coal in 2012.

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