PCI problems for Felix

THREE PCI buyers have pulled out of contracts with Felix Resources, forcing the Australian producer to put PCI coal tonnages on the lower priced thermal market and downgrade its first half profits.
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Courtesy Felix Resources.

Angie Tomlinson

Felix said on Friday that although sales volumes for the first half of the year were expected to be inline with budget, a shift in coal product mix would reduce operating profit.


The company said the drop in profits would be partially mitigated by lower operating costs.


Of the three key customers not taking up contracted PCI sales, one had experienced technical difficulties with a new plant and the other two had reduced PCI uptake. All three had deferred deliveries.


Felix said it had expected its 2006 profit would be significantly skewed toward the second half of the year. The company said it was not willing to offer a 2006 profit guidance until price re-negotiations were completed in March.


On Monday the company issued a trading halt pending the release of an announcement, or until commencement of trading on Wednesday.


Felix has continued with expansion plans; the first shipment from its Minerva mine was exported to Japan last month.


The company has also received approval of its project development plan for the Moolarben mine and has ordered its longwall equipment for the Ashton underground mine.