The company is also attempting to drive unit costs down by achieving better economies of scale by ramping up production at its Queensland coal mines.

Metallurgical coal production increased by 13% in the 2015 financial year to a record 43 million tonnes.

Record production and sales volumes at Queensland Coal were supported by the successful ramp-up of the Caval Ridge mine and continued productivity improvements.

An increase in equipment and wash-plant utilisation rates underpinned record volumes at six other operations.

Queensland Coal unit cash costs declined by 23% to $65 per tonne, supported by a continued reduction in labour, contractor and maintenance costs and a favourable currency movement.

In the 2016 financial year, unit costs are expected to decline to $61/t as the benefits from embedded productivity initiatives and a stronger US dollar, more than offset the removal of low-cost Crinum volumes and the expenses associated with its closure.

The company’s metallurgical coal production is forecast to decrease in the 2016 financial year to 40 million tonnes as operations at Crinum wind-down in the first quarter of the 2016 calendar year as the mine approaches the end of its economic reserve life.

Energy coal production for the 2015 financial year decreased by 5% to 41 Mt as anticipated by the company. Lower production reflected drought conditions and the need to manage dust emissions at Cerrejón in Colombia, as well as reduced demand for our Navajo Coal product from the US.

The company remains upbeat about the future of metallurgical coal but is more circumspect about prices increases for thermal coal.

“In metallurgical coal, while uneconomic high-cost supply has slowly withdrawn from the seaborne market, prices remain subdued as industry-wide cost reductions and weaker producer currencies against the US dollar support continued production from marginal suppliers,” the company said.

“Recent quality restrictions have also weakened China’s import demand but this was partially offset by growth in traditional markets. The long-term outlook remains robust as the supply of premium hard coking coals becomes scarce.

“Depreciating currencies have sustained Indonesian and Australian thermal coal exports, prolonging the weak pricing environment. Despite healthy seaborne demand growth from India, China’s import demand has weakened, limiting prospects for price recovery in the near term.”