New Hope Expects to See Rise in Coal Price

Submitted by Jim Thesiger on 24 March, 2010 - 05:17

Australia based coal mining company New Hope (NHC) is expecting to see an increase in the contract prices of coal as the company boosts its sales on the back of uprising demand. Rob Neale, the Chief Executive of the company stated that price for thermal coal was increasing, something that can be considered as an indication that the contract price may rise. However, he didn’t make any remarks regarding the speculations that the price may move up to $US100 per tonne. The New Hope Chief Executive added that some mitigating matters were noticed regarding the Chinese market in terms of not only the supply of coal to that region from Australia and Indonesia but South Africa was producing some as well. Although some firmness could be seen in the price but a strong Australian currency could offset the gains from the increase, Mr. Neale included.

The Chief Executive said he is expecting to see new contract prices with the Japan based utilities within the next two months. It is to be mentioned that a 93.9 percent drop was recorded by New Hope in the first half net profit where during the earlier corresponding period the reported profit of the company went up, motivated by the addition of a $1.69 billion worth of gain on the sale of New Saraji coal assets located in Queensland. Profit prior to the non-recurring items for the six months to January 31, 2010 went down by 15.8 percent to $111.58 million after taking a hit from the stronger Aussie dollar.

New Hope Chief Executive said the numbers were impressive for the company for six months with the sales of coal recording a rise. Although the export sales volumes for the company are up but lower coal prices along with the unfavourable exchange rates was responsible for offsetting that result. It is to be mentioned that the volumes of coal export for the miner went up but the domestic sales dropped by 2.8 percent to 585,000 tonnes. In excess of the contracted volumes, the sale of some 657,000 tonnes of third-party coal to fulfill the market demand has boosted the sales revenues.