Glouceste coal mining company reports advantage from result of exploration and produce of coal they increase 30 percent.

improvement of advantage yielded by gloucester, Profit during the 12 months to June climbed to $23.4 million, after Gloucester secured a price increase in excess of 270 per cent for its coking coal contracts with Japanese customers.

Chief executive Rob Lord said it had been a strong second half to the year and the company was looking robust for 2009.

He said the positive push would come from an increase in exploration, to firm up its resource.

Patersons Securities coal-mining analyst Andrew Harrington said the profit was just above guidance, but while the miner’s short-term outlook was good its longevity was questionable.

“Largely, the lift came from the last quarter’s high coal prices, which offset the lower production,” Mr Harrington said.

He said the company was guarded on questions from analysts yesterday on where sales were headed in terms of volume, but it was predicted to be single-digit growth. “They have a fairly positive outlook in the coming years, which will offset the increasing costs but the longevity of the assets is limited,” Mr Harrington added.

The company, which operates two mines in NSW, said production had been scaled back to meet reduced port allocation in Newcastle, which had led to lower sales volumes.

Total sales tonnage decreased 12 per cent compared with the previous year. But Mr Lord said the company’s outlook for coal was robust, as analysts forecast strong demand and rising prices for the sector.

“The demand side looks positive on coking coal with the industrialisation of India and China to pull on demand and tighten up global markets,” Mr Lord said.

He said the company would always have companies looking at it but its defence was in its strength. Mr Lord said the coal miner was considering merger and acquisition opportunities as it continued to grow.

The company also has a capacity expansion program, with the goal of increasing its capacity from 3.2 million tonnes a year to 4 million tonnes a year.

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