Operations began at the Mandalong longwall during January, set to produce four million tonnes per annum, lifting the company’s production by 25%. Production at the mine has continued well – the mine producing 1.42Mt from the end of January to June 2005.
The biggest news for Centennial in 2005 was the February $A300 million script bid for Austral Coal – owners of the Tahmoor mine. During April Centennial took a majority stake of the company and has since been building its share of the company.
The tug of war over the takeover between Centennial and Glencore still continues, adjudicated by the Takeovers Panel.
In May Centennial announced it would shut its Munmorah mine early, adversely affecting 2005 profits. The mine’s losses and closure costs affected 2005 profit to the tune of $A22 million.
In August Centennial announced a pre-tax profit of $A59.7 million for the 2005 financial year on the back of record annual production.
Centennial hit a major snag in late September when the Newstan longwall struggled to mine through a faulted zone. The two-month delay in production lost the mine at least 450,000 tonnes, or 15% of projected annual output.
Reflecting the bumpy ride, Centennial share price has slid since the end of September following news of problems at its Newstan mine.
The longwall has now successfully mined through the fault zone and continued with production as normal during December.
In the same month Centennial announced it had raised $US205 million in the US private placement debt market, ensuring it has the financial muscle to develop its Anvil Hill opencut mine in New South Wales' Hunter Valley.
Centennial recorded a one-year return of 4% after reaching lofty heights of $A5.52 during August before sliding back to around $A3.80.