Gloucester chairman James MacKenzie told its annual general meeting the plan to ramp up production was contingent on the delivery of projects which were at various stages of delivery.

Looking further forward, MacKenzie said Gloucester’s annual coal production could increase to more than 12Mtpa in less than ten years, with coking coal set to make up 40-50% of production.

2011 proved to be an acquisitive year for the company, with the near 50% purchase of Middlemount in Queensland and the purchase of the Donaldson and Monash assets in the Hunter Valley.

MacKenzie said these purchases had transformed the company from a small coal producer operating in the Gloucester Basin to a “multi-site operation with significant growth potential.”

Donaldson’s operations consist of the Donaldson open cut mine and the Abel and Tasman bord and pillar mines.

MacKenzie said 2011 yielded some positive production and financial results despite difficult operating conditions, with earnings before interest, tax and depreciation increasing by 57% to $90 million.

MacKenzie said the positive result was notwithstanding challenges including adverse weather conditions in New South Wales and delays to the Duralie and Stratford extension projects.

Looking ahead, MacKenzie said its Monash asset had the potential to become one of Gloucester’s most valuable assets in the medium to long term.

“Our objective over the next 12 to 18 months will be to progress exploration at Monash to the point that a JORC-compliant assessment of reserves can be released,” MacKenzie said.

Following this year’s purchases, MacKenzie said Gloucester was now strategically placed to deal with external factors including coal market fluctuations and delays to approvals.