New Hope Group chief executive officer Reinhold Schmidt is expecting a stronger period ahead for the company after it experienced a decline in coal sales and production.
The company sold 4.9 million tonnes of coal in the first six months of the 2021 financial year, a 23 per cent fall on the previous corresponding period.
Coal production at its Bengalla mine in New South Wales, where New Hope has an 80 per cent interest, was down 16.3 per cent from the previous period to 3.6 million tonnes.
According to Schmidt, who stepped in as New Hope CEO in September last year, the decline was due to a major dragline shut, aimed at bolstering future performance of the mine.
“The investment in the dragline has delivered continued improvement in productivity to ensure a strong performance into the future,” he said.
“The focus moving forward is to increase annual production to the approved permitted capacity of the operation whilst maintaining safety and cost efficiencies.”
New Hope’s continued legal battle over stage three of the New Acland project in Queensland has also affected production.
Its Queensland operations produced 900,000 tonnes of coal in the first half of the 2021 financial year, down by 43.8 per cent from the previous corresponding period.
Further redundancies are set to occur as stage two of the project nears its conclusion.
“Redundancies continue as a result of nearing final stage two coal at New Acland,” Schmidt said.
“With the High Court of Australia ordering New Acland back to the Land Court of Queensland in the first quarter of (the 2022 financial year), and the prospect of the project being placed in care and maintenance, a further impairment of the asset has been accounted for in the half year results.
“Despite the ongoing delays, brought about by a handful of vocal activists, the company remains committed to push for the approval of stage 3.”
New Hope remains confident that the company will see continued demand for its coal with a stronger coal price.
According to Schmidt, the Newcastle 6000 index recovered from lows of $US50 ($64.60) in 2020 to over $US90 currently.
“Continued strong cost management across the business will see results improve throughout the second half of the financial year,” he said.
“Our focus for the future remains on safe and efficient production at existing operations and a commitment to maintaining long term relationships with our suppliers and customers.”