The New Zealand coal mining group, which reported an interim profit of $NZ70.3 million – a 56% increase on the first half of 2010 – had record first half coal sales of 2.36 million tonnes.

Solid Energy chairman John Palmer said: “The volatile global economic environment put volumes and prices under increasing pressure by the end of the half year.

“We expect these conditions to continue in the short to medium term. This, coupled with a high New Zealand dollar, will significantly reduce the prices and revenue we receive in New Zealand dollars in the second half of the 2012 financial year.”

At 2.1Mt for the six months to December, coal production was in line with 2010. Production at Stockton mine was up 8% in the half to 871,000t while production at Spring Creek mine was down 28% to 200,000t as the mine is now developing the next five-year extraction block.

In February 2012, Solid Energy agreed to buy Cargill’s 49% share of Spring Creek Mining Company. Solid Energy may consider a new partner at Spring Creek mine after Cargill’s global decision to exit coal production.

Production at Huntly East mine has been reducing over the last year, down 14% for the half to 169,000t due to harder mining conditions in some of the extraction blocks. Coal production is expected to be back to plan in the second half of the year, the company said.

The $30 million ventilation shaft development at Huntly East mine is on schedule to service the northern extension of the mine from the end of 2012, it said.

At Rotowaro mine, production was down 6% to 577,000t during the transition from HWE Mining to Stevenson Mining Ltd as operator of the mine.

Production at New Vale Mine in Southland was up 10% to 156,000t.

“Production growth at our underground coal mines is being constrained by 20% employee turnover but we are increasing our trainee miner intakes combined with bonding arrangements to slow the turnover rate,” Solid Energy said.

“The company continues to build capability at all levels to support our strong long-term growth strategy.

“It is also advancing strategies to retain staff across the business against significant on-going escalation of personnel costs, caused primarily by the commodity boom and an overheated mining industry labour market in Australia.”

Exploration costs increased by $4.9 million to $15.7 million.

Cost of sales, exploration and other costs increased year on year by $34.6 million. Solid Energy has ramped up exploration drilling on the West Coast.