MARKETS

Alabama mine boosts Walter production

WALTER Energy increased its metallurgical coal production to 3.1 million short tons in the March quarter, compared with 2.8Mt in the previous corresponding period.

Lou Caruana
Alabama mine boosts Walter production

The increase was largely due to a 36% increase in low-volatile hard coking coal production at Mine No. 7 in Alabama.

Additionally, production of low-vol pulverised coal injection in Canada increased 17% and the company's mid-vol mines in Alabama and Canada reported production increases of 13%.

Met coal cash cost of production averaged $68.74 per short ton in the quarter, down $21.04/t, or 23.4%, as compared with the prior-year quarter.

The company also made strides in improving its capital structure and liquidity, Walter Energy CEO said.

"However, met coal pricing was under pressure in the quarter and the lower pricing had a significant adverse impact on our revenues and earnings,” he said.

“We have taken steps to reduce unprofitable production and to further cut costs.

“We are taking actions to make our company stronger while remaining in a position to capitalise on the value of our high quality met coal reserves when the market improves.”

Walter Energy reported a net loss of $US92.2 million ($A99.4 million), compared with a net loss of $49.4 million in the first quarter of 2013.

The company reported an operating loss of $47.1 million for the first quarter, a $16.5 million improvement on the $63.6 million operating loss in 2013.

“Although revenues declined significantly due to the decrease in met coal prices and volume, the company's successful focus on cost reductions resulted in the improved operating results,” it said.

First quarter 2014 consolidated revenues totalled $413.9 million, compared with $491.3 million in the first quarter of 2013, reflecting a decrease in average met coal selling prices of $25.62/t.

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