The company’s short to medium-term outlook is similar to that faced by many other Australian and New Zealand exporters, with the impact of a major fall in international commodity prices magnified by the continuing strong local currencies, chief executive officer Don Elder said.

The industry consensus is that the market bottom remains some way off, he said.

“While many in the industry still expect demand, driven by Asia, to pick up again strongly sometime in 2013, Solid Energy needs to plan to withstand these market conditions for at least the next 12 months and possibly for 24 months or longer.” he said.

International prices for high-grade coking coal have fallen over 40% to below $US200 per tonne – from well above $US300/t in 2011 – and are at their lowest point for some years.

“As a consequence, we are reviewing all areas of our business, including current and future operations, all fixed and variable costs, and the values of some of our assets, which will result in us taking significant impairments,” Elder said.

“Our aim is to preserve cash through reduced spending while, as far as possible, maintaining our longer-term value opportunities.”

The outlook was different to that faced by the company during the global financial crisis, Elder said.

In early 2009, as commodity prices plunged, the New Zealand dollar followed, softening the fall in New Zealand dollar prices. Spot prices then rebounded within a matter of months.

Now, however, the company says there is no certainty about when international growth will resume and lift international coal demand and prices.

Elder said operational and structural changes would result from the review and he expected to provide further detail about the company’s outlook later this month when its 2012 financial results were announced.