Mine development rates are ahead of schedule, with completion of development for a third longwall panel expected by end of this calendar year, he told the Sydney Mining Club.

“Investment in developing tier 1 assets, combined with our proven track record of cost control, will bring about a 20% reduction in the average FOB cash cost across Whitehaven’s portfolio of assets,” he said.

“Productivity improvements in Narrabri mine are being maintained.

“The longwall change-out program has been completed with the commencement of production from the second longwall panel, which is approximately 1800m long and 300m wide.”

New automation software has been installed and is in trial led by experts from Caterpillar.

The plan is to move to bi-directional cutting on completion of the trials.

Other modifications during the change-out period were done to prevent shearer roll-back and changes to chock isolation valves and hi-set POCV valves.

The mine also addressed the skills shortage that had slowed down its development last year.

“The company has made a continued investment in building a permanent workforce and training of locally based labour pool,” Flynn said.

“More than 98% of the production workforce are now permanent employees.”

Flynn estimates that once the company’s Werris Creek, Narrabri and Maules Creek are at full capacity, 85% of Whitehaven’s coal will be produced at an average FOB cash cost base (excluding royalties) of about $65 per tonne.

“Our aim has to be to lower our cost of production of quality coal,” he said.

“The fundamentals of coal as a long-term primary energy source are robust, driven by global population growth and increasing demand for steel and reliable low-cost energy in emerging economies.

“Future energy policies are shifting towards more efficient energy generation driven by environmental concerns. This will lead to a convergence of demand towards high-quality thermal coal.

“Whitehaven’s growth assets... are high-quality assets, producing relatively clean coal, ensuring we are well positioned to meet the shift in energy policies.”