Miner shortage delays Narrabri longwall

WHITEHAVEN’S Narrabri underground development of its main headings continued during the March quarter with three continuous miners working, but difficulty recruiting miners will delay the introduction of a fourth continuous miner and longwall mining at the New South Wales mine.
Miner shortage delays Narrabri longwall Miner shortage delays Narrabri longwall Miner shortage delays Narrabri longwall Miner shortage delays Narrabri longwall Miner shortage delays Narrabri longwall

Underground at Narrabri North. Image courtesy Whitehaven.

Lou Caruana

The company, which is undergoing a sale process at the moment with international coal companies, also had to lower its full year net profit after tax guidance by about 20% to $A70 million because of the deferral of metallurgical coal shipments from Newcastle to Japan after the tsunami and earthquake earlier this year.

Problems in recruiting enough experienced underground miners has lead to the commencement of the contract for provision of a fully manned fourth continuous miner being delayed by approximately five weeks, the company said.

“Unless development rates can be improved, which is considered unlikely, this is expected to delay commencement of the first longwall by a similar time, with commencement of longwall mining now likely to be in February 2012,” it said.

Delivery of longwall equipment is on schedule to be available for December 2011, with pre-commissioning at supplier facilities in Australia in progress.

Construction of Stage 2 surface facilities including the CHPP, ventilation shaft and other ancillary works is proceeding on time and budget.

Narrabri produced 137,000 tonnes of saleable coal year to date, and continued the successful pre-drainage of in-seam gas to levels below the threshold for continuous mining.

“Confidence in the gas drainage model continues to grow as experience builds,” the company said.

“A program of surface to in-seam (SIS) and underground in-seam (UIS) drilling is continuing in order to create an inventory of drained coal ahead of mining.”

Total coal sales were 1.334Mt for the March quarter (100% basis), up 11% on the previous corresponding period. Sales comprised 1.046Mt of produced coal and 0.288Mt of purchased coal. Export sales comprised 0.233Mt of metallurgical coal and 1.056Mt of thermal coal, with domestic thermal coal sales of 0.045Mt.

Saleable coal production was affected adversely during the first half of the financial year by an unusually high number of wet weather days, however the Gunnedah Basin was not affected significantly by wet weather in the March quarter.

The economic impact of lost production from wet weather in the first half was compounded by a number of factors resulting in total coal purchases of 1.184Mt in the first half.

In addition, a further 0.715Mt of legacy thermal coal contracts were cash settled during the first half, where neither Whitehaven production nor purchased coal were available for delivery.

A formal process was initiated in late October 2010 to consider potential offers for the company.

Non-binding proposals were received in early February and selected parties were invited to conduct full due diligence and submit binding proposals.

“This process is now reaching a conclusion with the Whitehaven board expected to shortly consider which, if any, of these proposals should be recommended to shareholders,” the company said.

Cash on hand at 31 March was $193 million. This cash, together with outstanding cash to be received from previously announced sales of the Narrabri JV interests and cash from operations is expected to provide sufficient funding to complete the development of Narrabri and the expansion of Whitehaven’s existing open-cut mines.

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