For the December quarter, WCC reported $C24 million on sales of $118.7 million. The revenues were up 10% versus the second fiscal quarter due to the sale of 175,000 tonnes of coal at prices from the previous year.

Net income for the third quarter was $24 million, down from $62.4 million in the third quarter 2008. While income from mining operations was $37.7 million and the company received equity earnings of $1.04 million, other expenses totaled $6.9 million, in addition to a non-controlling interest loss of $111,000 and an income tax expense of $7.7 million.

While it has taken a financial beating during the economic slowdown, WCC pointed out that it had been able to reduce costs and strengthen its financial position through internal investments. Cash costs for its Canadian operations – or product-plus-transportation fees – were $96 per tonne, 4% lower than the previous quarter, and US cash costs were down 7% to $US66 per short ton.

Destined for its Wolverine complex, WCC approved an investment of $C23.9 million for six 250-tonne haul trucks and front-end loading equipment during the quarter. It expects the new machines to increase production rates.

The eight 150t trucks being replaced with the new purchase will not be lost, but are expected to be redeployed to the Brule and Willow Creek mines.

“We have come out of the global economic recession with a lower and improved cost structure which, combined with the increasing demand for the company's products and higher coal prices into the future, means Western is well positioned to generate higher shareholder returns," chief executive Keith Calder said.

“Our strategy will be to take advantage of these improved conditions to grow and expand our business, which will further bolster our competitive position.”

At its Canadian operations, WCC has seen a strong uptake in demand for its metallurgical product as the steel industry worldwide recovers.

“In the longer term, the market fundamentals for metallurgical coal are expected to remain strong, which will provide continued opportunity for the company,” WCC said.

“Wolverine hard coking coal forms a key blend component with many of the world's leading steel mills, while the Brule mine ULV-PCI coal is consistently ranked among the top PCI coals worldwide. These high-quality coals, in conjunction with highly efficient rail and port infrastructure in northern British Columbia, continue to provide the company a competitive advantage to continue to grow and diversify its customer base.”

The jump in metallurgical coal demand has also benefited the producer’s US operations, particularly in West Virginia. WCC has sold some of its premium thermal coal from the Gauley Eagle mines into the high-volatile metallurgical coal market, and production capacity is being evaluated at the Maple mine for the potential to ramp up.

In the UK, the steel industry has shown “considerable interest” in the anthracite product from the Aberpergwm mine.

“Energybuild's major customers are an energy plant and steel mill within 25 miles of the mine [and] both of these customers are importing almost all of their thermal and PCI coal,” the company noted.

“This captive market provides a competitive advantage for Energybuild.”

WCC’s guidance for the final three months of the fiscal year is 600,000-700,000t of met production from its two Canadian operating mines, comprising 400,000-425,000t of hard coking coal from Wolverine and 200,000-250,000t of ultra low-volatile pulverised coal injection coal from Brule.

Its shipment expectations are 850,000-950,000t, comprising 550,000-600,000t of hard coking coal and 300,000-350,000t of ULV-PCI product. The latter sales reflect a drawdown of WCC’s inventory stockpiles.

All of the company’s fiscal 2010 production from the Canadian operations is under contract for sale at about $US126/t for hard coking and $US90/t for ULV-PCI. Expected cost of production is anticipated to be $US95-100/t for the remainder of the year, its sixth straight year for cost-cutting success.

From its US operations, WCC expects to produce and sell 365,000 short tons through the remainder of the fiscal year, including 260,000t of thermal product and 105,000t of coking coal. Cash production costs are estimated at about $US69-74/t, with average cost realizations of approximately $US78-83/t.