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As TerraCom’s diamond-in-the-rough Blair Athol coal mine continues to deliver hearty results, the company says the thermal coal market is showing “considerable strength.”
TerraCom (ASX:TER) remains positive about thermal coal after announcing that sales for the June quarter at its Blair Athol coal mine were in line with forecasts.
The company acquired the asset from Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) two years ago for the stunningly low price of $1, and has since been working to reinvigorate it after its previous close in 2012. Production at the mine officially restarted in October 2017.
In a February release, TerraCom announced that the company has been able to extend Blair Athol’s mine life to nine years, with reserves jumping from 15.6 million tonnes to 18 million tonnes since September 2017. The mine is expected to produced 2 million tonnes per year.
“The market for Australian thermal coal has shown considerable strength over the past two months, with a strong focus from buyers wishing to secure low total sulphur bituminous coal such as the product from [Blair Athol],” says a Friday (June 8) statement from the company.
According to TerraCom, companies from Japan and Korea are among its biggest buyers.
“The sales portfolio continues to expand as old customers return looking to secure volume, and new customers trial the product. The BA brand is strong amongst Japanese and Korean buyers,” the statement from the Australian company reads.
“The mix of contracted customers in the September quarter is as follows; 33 percent Japan, 46 percent Korea, 12 percent Indonesia and 9 percent others,” it also says.
The company has secured sales of 520,000 tonnes for the September 2018 quarter at an average price of US$92 per tonne, with hopes of hitting its 650,000-tonne forecast in the coming weeks.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.