The diversified company’s resources division – which includes the Curragh and Bengalla coal mines – was expected to be the only division that did not meet budget forecasts, he told the company’s annual general meeting yesterday.

“In the resources division the Curragh coal mine in the Bowen Basin is facing a difficult metallurgical coal market and the team is very focused on optimising operations and reducing costs,” he said.

“While we are maximising the operational performance of our coal mines, continued soft metallurgical and thermal coal prices and the high Australian dollar have resulted in the worst conditions we have seen in many years and this is clearly placing pressure on all Australian coal miners.

“These conditions, along with the impost of the Stanwell royalty, increases in state royalties and the introduction of the carbon tax, will significantly impact the resources division’s financial performance for FY2013.”

The resources division revenue for FY2012 was $2.1 billion, up 19.9%, while earnings increased 19% to $439 million.

The major driver of the result was higher export coal prices in the first half and improved sales volumes in the second half, following the completion in the fourth quarter of expansion projects at the Curragh and Bengalla mines.

Higher revenue was partially offset by extra costs associated with flood recovery efforts, one-off mine expansion preparation costs and higher government royalties.