Coal production to continue despite ‘short-term’ delays

Operations at TerraCom’s Blair Athol coal mine and Dalrymple Bay terminal in Queensland are fully operational despite slight supply constraints, the company said.

The news comes following supply chain constraints in the delivery of coal via rail, with the company noting “short-term delays” are expected for the December quarter impacting shipping schedules, revenue timing and cash receipts.

Despite this, Blair Athol holds significant coal inventories both at site and at port, comprising approximately 140,000 tonnes of site product, 11,000 tonnes of port product, and 42,000 tonnes of site run-of-mine coal.

This, TerraCom said, represents an equivalent saleable product position of approximately 186,000 tonnes – broadly in line with two shipments or about one month of sales.

Blair Athol has an export rate of 1.8 million tonnes per annum of high-quality low impurity thermal coal and has a life of mine of approximately seven years.

To mitigate the impact of “external constraints”, TerraCom has implemented a range of measures to support operational continuity, which includes shipment prepayment arrangements, creditor management measures and targeted capital and cost reduction initiatives.

Underlying operational performance and competitive cost base at the mine remains strong despite the challenges relating “solely to the timing of revenue and cash inflows” and the company said broader production and development remains unchanged.

“TerraCom continues to closely monitor the situation as part of its cashflow and liquidity management framework and will provide further updates as appropriate,” the company said in a statement.

“The company maintains confidence in the resilience of its business model and its ability to manage through temporary supply chain disruptions while continuing to deliver long-term value for shareholders.”

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