Production in the 2004 March quarter was well below budget, a reflection of the adverse face conditions experienced during March.

Extraction was made difficult by the influence of an adjacent reverse thrust fault and continual mechanical breakdowns on the 16 year old equipment. By the end of March, the slow rate of progress resulted in extensive convergence, intermittent roof falls and considerable deterioration on the longwall face, which stopped longwall operations 193 metres short of final completion.

Development work measured 3,720 during the quarter. Three development units were engaged on gateroad development for panel 22 at Tahmoor North. Development rates were below normal as development crews mined through a known dyke zone and holidays interrupted full manning.

A fourth development unit operated at the northern end of panel 22 and was grunching for most of the quarter. This was helped by a fifth unit which started in late February. These units were engaged in main road development and the completion of the installation headings where the new DBT longwall will be installed.

Work has now begun on widening of the installation heading to accommodate the larger roof shields.

Just over 2,200 metres of roadway development now remain, with completion scheduled for May with the new longwall to commence on June 1.

During the quarter 5,000 tonnes of new longwall equipment was stowed underground in preparation for installation.

Expenditure on the Tahmoor North project reached A$102 million at the end of the March quarter, with a further $10.3 million to be spent before start of mining.

On better news, annual coking coal contracts were finalised, realising an average price increase of 30% and the sourcing new customers from Brazil and Australia.