Last month the company advised the market that coal production during the December 2005 quarter was hampered by work underground that was essential to ensure longwall development remained on track at its Newpac mine in New South Wales.

To meet existing contracts Resource Pacific was forced to purchase coal for $7.7 million.

Coal sales for the half year were $22.7 million, compared with $15.1 million in 2004.

Resource Pacific also announced it had concluded price negotiations with Asian steel mills. The company agreed in principle for the supply of 20% of expected sales in the forthcoming year for around $US55/tonne.

Resource Pacific said customers had made commitments for larger purchases once longwall operations had commenced.

The impact of purchasing coal and lower sales prices from April 2006 is expected to reduce the forecast EBITDA for the 2005-06 financial year by $12 million.

Longwall development at Newpac remains on schedule for January 2007 ramp-up.