Felix said it posted a record profit despite incurring significant demurrage due to congestion at the ports of Newcastle and Gladstone.

The company recorded coal sales of more than 3 million tonnes for the year, with a record profit contribution from Queensland operation Yarrabee with 1.66Mt.

Felix managing director Brian Flannery said the three operating mines in New South Wales and Queensland were now producing to planned capacity; and with expansion projects coming on board in 2007, the company had high expectations for the coming year.

“With the underlying strength in the market, coupled with a full year’s contribution from Minerva mine and the start-up of the Ashton longwall mine in early 2007, we expect financial year 2007 to be another growth year for Felix,” Flannery said.

“This will place the company in a strong financial position to start construction of the large Moolarben Mine in New South Wales, which when completed will see production for Felix increase to over 15Mt per annum.”

The planned Ashton longwall in New South Wales in expected to produce more than 2Mtpa of semi-soft coking coal from early 2007.

Felix said construction and development work for the mine commenced in December 2006 and progressed satisfactorily throughout the year encompassing 3775m of underground roadway development, commencement of construction of the 600tph wash plant module and specification and ordering of the longwall equipment.

“To date construction of the project is on time and on budget with all major expenditure, apart from the underground development and labour for the wash plant erection, firmly locked in,” Felix said.

“Underground mining conditions to date have been favourable with sound strata conditions and minimal gas and water.”

The Moolarben development project in New South Wales will comprise opencut and underground mines with thermal coal production capacity of more than 9Mtpa and a life of more than 25 years.

The project will be developed initially as an opencut mine producing thermal coal, with ramp-up expected in 2008 with capacity of 9Mtpa to be reached by 2010.

Recent drilling has confirmed previous exploration results and increased the size of the opencut resource from 275Mt to more than 300Mt of mainly measured and indicated resources.

The Moolarben underground mine is planned as a longwall operation with capacity of 4Mtpa per year of export quality thermal coal and with a measured, indicated and inferred resource of 186Mt.

Felix said longwall development was planned to start some time after the opencut has reached full capacity with access to the coal seam via the exposed opencut highwall.

The Minerva opencut mine in Queensland was commissioned in March this year and has produced 960,000t of coal to July 2006. The mine is now producing at its rated capacity of 2.5Mtpa.

Exploration during the year increased the estimated measured, indicated and inferred resources from 53Mt to more than 80Mt – increasing mine life from 11 to 14 years.