At a meeting on Tuesday, company chairman Chris Renwick told shareholders he was confident the demand for Australian coal would remain firm, with recent trends in the spot and forward markets suggesting a positive outlook for thermal coal.

“For thermal coal we anticipate the supply and demand balance will be largely determined by supply growth in Indonesia and China’s evolving net export position,” he said.

“We expect to see continued demand growth from South-East Asia, Latin and Central America and from the more traditional markets for Australian producers, Korea and Taiwan.”

Renwick said the gains achieved from the high price of export coal sales in 2005 had been offset by the high operating cost of Coal and Allied’s mines.

“In the face of increased costs and shortages in labour and other inputs, we must remain committed to improvement,” he said.

Renwick said the increase of annual capacity at Newcastle Port to 102 million tonnes, combined with the de-bottlenecking of the rail system, would provide opportunities to access additional capacity.

“Coal and Allied need to maintain sufficient stock levels to ensure we are positioned to take advantage of any additional available capacity in the port and rail infrastructure,” he said.

Renwick said the company was focused on remaining competitive in order to hold a strong market position when coal supply and demand balance and prices inevitably subside.