Oaky North recovery to cost $10 million

Staff Reporter

MIM Holdings Ltd says recovery and relocation of the Oaky North longwall is expected to cost $10 million.

The company, which recently posted lower pre-tax coal earnings for the six months to December 31 1999, compared with the same period a year earlier, said its unit cost of production continued to improve through productivity gains and closure of the higher cost opencut operation at the 75%-owned Oaky Creek complex. However, it was incurring additional costs due to the disastrous forced shutdown, recovery and relocation of the Oaky North longwall.

Production from the new longwall ceased in November last year when bad floor and roof conditions buried the face equipment. The longwall, which is being relocated further into the same panel, is expected to recommence production by the end of March.

MIM said Oaky Creek EBIT for the latest six months was $5 million compared with $10.6 million for the December 1998 half year, while EBIT for the 75%-owned Newlands-Collinsville-Abbot Point operations was $17.2 million for the December 1999 half year, down on the $23.9 million for the previous corresponding period. The latter result was due to lower $A coal prices. MIM said production at Newlands continued to be dominated by the mine's low-cost longwall operation, which was "matching world's best".

"Despite the temporary loss of Oaky North coal output, washplant production for the December quarter was maintained by increasing output from the Oaky No.1 (longwall) mine and by utilising stockpiled ROM coal supplies," the company said.