Whilst there were operational gas issues, Austral Coal still managed to reach a number of significant milestones during the quarter, including the strategic alliance with Noble Group, providing a long term sales agreement and up to AUS$15 million equity injection.

Coal price negotiations with Japanese steel mills was also completed with price increases above market average, five year contracts and a pricing mechanism for future years.

On the equipment side, the 30 new DBT roof shields and Joy 7LS2 shearer arrived in Australia, compatibility tests were completed and transport of equipment underground began. About 30% of the new roof shields have been transported to the mine and taken underground ready for installation.

Conveyor systems for longwall panel 22 were installed and several new contracts on the upgrade of the mine’s electrical and conveyor systems were let.

Operations are currently concentrated on longwall panel 21, which was 60% complete by the end of the year. Abnormal gas levels on the longwall face resulted in intermittent stoppages, which reduced advance rates to below expected levels. The slower production rate meant the deferral of planned coal shipments to the first quarter of 2004.

Despite one contract crew continuing to grunch in the south-western area of the mine, 4,764 metres of mine development was completed, and 13,886 metres for the full year.

Both Tahmoor development units and one contract development unit operated at the eastern end of Tahmoor North in excellent mining conditions. Improved development rates were evident in this area, although coal haulage distances of up to half a kilometre were the norm while two major belt drivehead and conveyor installations were completed in mid-December.

Austral said the priority development task remained the completion of roadways forming longwall panel 22, which will commence production in April this year.

Austral were able to complete 33,320 metres of in seam gas drilling for the quarter, and 92,678 metres for year, owing to additional manpower and equipment resources which will ensure future drilling remains ahead of development requirements.

The upgraded washery met target throughput levels during the quarter reaching a daily high of 16,090 tonnes. Yields were lower than anticipated because of mining in a high ash zone and sub optimal performance on some of the components of the new washery. Contract performance trails for the new washery equipment were deferred to this month.