Supply cuts totalling 21 million tonnes per annum have already been announced with further cuts likely as oversupply remains, he said at the recent investor and analyst briefing.

“China is expected to remain a significant importer but much of its demand growth will be met by domestic supply,” he said.

“A scarcity of high-quality resources will underpin longer-term seaborne demand in other emerging economies.”

He said the strong performance over the last five years reflected the underlying quality of its coal assets.

The company’s strategy and early focus on costs has delivered productivity gains against the backdrop of a challenging external environment, he added.

“Our coal business has embedded $US2.4 billion of cost and volume efficiencies, representing over one third of total savings achieved by the group,” he said.

“We have fundamentally reset the cost base. We acted early to close high-cost, loss-making capacity at Norwich Park and Gregory open-cut mines in CY12. Metallurgical coal unit cash costs are down 37% in two years and energy coal unit cash costs down 21% in two years.

“We have initiatives underway to reduce costs beyond these levels,” he said.