The result was $600,000 less than the loss made in the corresponding period in 2009.

Saleable coal production from the Cook mine reached 323,400 tonnes – about 3300t more than the first half of 2009.

Caledon said the ability to increase production in the first six months of 2010 was constrained by the lack of opportunity to deploy a secondary extraction miner.

“Cook had equipment for two development sections and up to two secondary extraction sections, but development of the South Argo area had not yet reached a stage where a secondary extraction section could be deployed and secondary extraction resources in North Argo were finally fully consumed in the first six weeks of 2010.

“It was therefore decided to implement a place change section using a non bolting miner and mobile bolting rig in an area between pit bottom and the previous North Argo workings to permit deployment of an additional production section.

“Unfortunately issues with roof control made this system relatively unproductive and, when secondary extraction coal became available in the second half of 2010, the place change operation was discontinued.”

Cost of sales reached $177 per tonne in the first half, up 3.5% year-on-year.

Some of the higher costs were a result of mining more coal through development rather than secondary extraction, plus a big jump in maintenance expenditure.

The panel targeted by the Magatar continuous haulage system also had “challenging” strata conditions.

Cook also had lower product recovery and a small increase in labour rates.

Caledon has lowered its 2010 saleable production forecast to 600,000t – some 100,000t lower than its previous guidance.

The Cook mine completed development of two panels off the South mains and another two secondary extraction panels are being developed to ensure there are no more production delays.

Meanwhile, the final feasibility for the nearby Minyango project to increase the Cook mine into a bigger mining complex is expected to start up in the December quarter.

Caledon has also lodged a bid to get 4 million tonnes of capacity through the Wiggins Island Coal Export Terminal.

The London-based company moved on to quarterly contracts this year and settled its coking coal at $US198/t for the September quarter.

Caledon ended June with a cash and cash equivalent position of $13.5 million.

Shares in the company are unchanged at 85.5c on the Australian Securities Exchange.