Previously on March 31, Austral terminated mining of Tahmoor's last panel 193 metres short of planned length after successive roof falls damaged equipment.

The panel was subjected to a number of roof falls and convergence events that had halted longwall operations and damaged the 16 year old equipment which was due to be scrapped in four weeks.

Austral said although it was possible to mine the remaining length of the panel, the time and resources required to restore operations and repair damaged equipment would prejudice the timely start up of the new Tahmoor North operation.

The decision to cease longwall operations in panel 21 will result in the loss of 120,000 tonnes of clean coal.

Workers at panel 21 will now be assigned to accelerate development and installation activities in Tahmoor North, where operations are due to commence in late May.

The exact financial impact on 2003 accounts is yet to be released, but unaudited accounts published on March 2004 will be adjusted to write off the balance of capitalized development costs relating to panel 21. Austral said it was currently discussing the adjustment and it was expected the early stop will result in an increase in amortization charges of about $2 million.

The new Tahmoor lease, which has so far experienced excellent conditions, will produce 3Mtpa for the balance of 2004, increasing to 4Mtpa by the end of 2005.