Russell Vale longwall mine at risk of closing

WOLLONGONG Coal could put its Russell Vale longwall mine on care and maintenance as the miner faces planning approval delays, a significant winding up proceeding and some bleak auditor views.
Russell Vale longwall mine at risk of closing Russell Vale longwall mine at risk of closing Russell Vale longwall mine at risk of closing Russell Vale longwall mine at risk of closing Russell Vale longwall mine at risk of closing

The NRE No.1 colliery.

Blair Price

Arguably the good news from its annual report yesterday, which unconventionally covers the 12 months ending March 31, was that the company’s loss making had declined in pace.

The total loss for the year was $A92.11 million – down 76% from the $386.15 million loss in the previous year – with the Wollongong miner cutting a combined 200 staff over separate purges in January and May.

Revenue declined 59% year on year to $69.1 million as the company faced longwall production disruptions at its two Illawarra mines.

There was a roof collapse that set back the Wongawilli longwall mine in February.

The equipment there has since been moved to newly developed Nebo area panels of this mine with the shearer cutting coal again last month.

The nearby Russell Vale colliery, formerly NRE No1, has had no longwall production since December as the company awaits state government approval to mine additional panels.

“If necessary approvals are not forthcoming, the consolidated entity may be forced to place its Russell Vale Colliery into care and maintenance mode,” Wollongong Coal warned in its annual report.

While Wollongong has settled most of the winding up proceedings it faced since 2013, PCL Shipping is still seeking to wind it up over a claimed debt of $3.57 million.

Wollongong said the matter was listed for directions on July 21 and it was seeking necessary legal advice.

The Illawarra coal producer is also facing statutory demands, including one for $6.57 million of debt from former parent Gujarat NRE India and another for $2.71 million of debt from British Marine with a four-day hearing scheduled for the last week of July.

Comments auditor Grant Thornton made in the previous year’s annual report ended up being quoted in Indian media last year and serious concerns were again expressed in this year’s results.

Grant Thornton opposed the company’s move to keep $67.6 million of Trade and Other Receivables on its books – saying this amount should be impaired in full while criticising Wollongong for not making any allowances for doubtful debts.

On the circumstance of the company’s $458.78 million of net current liabilities, including $382.76 million of current bank borrowings, the auditor took note of the significant doubt about the company’s ability to operate as a going concern.

Wollongong’s mining workforce is believed to number around 256 after the job cuts this year.