12th Jan 2016 17:05
LONDON (Alliance News) - New World Resources PLC late Tuesday said coal production fell in 2015 but managed to come in a smidgen above its guidance.
The miner said it produced just over 8.0 million tonnes of coal in 2015, slightly ahead of its guidance for the full year but down from 8.6 million tonnes in 2014.
The news comes weeks after the miner said it would close down two of its mines at a cost of around EUR100.0 million as it scrambles to slash costs further and secure more funds in order to survive the downturn in coal prices.
Initially, it has decided to close the Paskov and Lazy mines in the Czech Republic by the end of 2017, leading to an "employee-restructuring", which will cost the company between EUR85.0 million and EUR100.0 million overall.
The company launched a strategic review of the entire business in November as coking-coal prices continue to be placed under further pressure due to slower industrial demand, whilst the thermal coal market is struggling with oversupply and aggressive pricing from competitors.
For its coking coal, it achieved an average price in 2015 of USD90 per tonne, an increase from the 2014 average of only USD85 per tonne. However, thermal coal prices averaged USD50 per tonne, which was down from USD54 per tonne a year earlier.
Coking coal is used as a fuel and as a reducing agent in smelting iron ore in a blast furnace to create pig iron, a key ingredient in making steel whilst thermal coal is used for power generation.
Coking coal sales in 2015 came in at 4.2 million tonnes in 2015 whilst thermal coal sales came in at 3.7 million tonnes, giving it a sales mix of around 52% coking coal and 48% thermal coal. New World Resources was aiming to have 60% of its sales to come from coking coal in the year.
Looking specifically at the fourth quarter of 2015, the company produced 2.3 million tonnes of coal, suggesting production was slightly lower compared to the other three quarters of the year.
Coking coal sales totalled 1.1 million tonnes whilst thermal coal sales came in at 1.5 million tonnes, with prices coming in lower compared to the average for the year at only USD86 and USD48 per tonne respectively.
New World shares closed down 2.8% to 0.190 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
New World Resources