Following a detailed review of mining operations during the June 2015 quarter, operations were shut down at both of its Mountainside Coal Company (MCC) subsidiary’s mine sites, Flat Creek and Hatfield Gap in the US, for three weeks in July, in order to clear coal inventories which had built up in recent months.

“Management has also implemented a number of cost reduction initiatives which involve MCC significantly reducing thermal coal production,” the company said.

During the June 2015 quarter, one of MCC’s other major customers idled their ferrosilicon smelter and ceased taking stoker coal deliveries, which had an impact on planned sales during the quarter. Sales of stoker coal product to this customer are expected to restart in October 2015.

“The US domestic coal market continues to suffer from depressed trading conditions,” White Energy said in its June quarterly statement.

“The thermal coal market in particular remains impacted by a lower demand for energy and low natural gas prices which has resulted in gas replacing coal in some power generation markets, with no indication of improvement in the short-term.

“These conditions have led to further mine closures by a number of other US coal producers in recent months.

“Since the acquisition of MCC by White Energy in late 2013, the market price of all coal types in the US has fallen significantly.”

Against this backdrop, MCC generated a further $US5.6 million in coal sales revenue during the June 2015 quarter, and $19.3 million since the start of the 2014/15 financial year.