Curragh’s recoverable value remains very sensitive to future currency and export coal price assumptions, and low cost production provides scope for improvement in financial performance should coal revenues improve, the company said.
Wesfarmers managing director Richard Goyder said: “In Wesfarmers, we firmly believe in doing what’s right for the long term future of our businesses, and we have never shied away from taking tough action in the short term if that is what is required.
“The decisions which we have outlined today reflect more difficult market conditions in…Curragh, but we remain confident that operationally we have the right plans to improve future performances over time.”
The write-down mainly reflects a slower forecast recovery in long term export coal prices and higher volatility (including in exchange rates).
The effect of this impairment charge will be to write down the depreciable and amortisable assets of Curragh.
“Notwithstanding challenging market conditions, Curragh has maintained its relative low cost position and very strong safety record, and will continue to seek to deliver further benefits in these areas,” Wesfarmers.