Paringa shipped approximately 136 Kt of product barged from the company's dock on the Green River, up from approximately 26 Kt shipped during the June quarter.
September quarter coal sales equate to revenues of approximately US$5.7 million for the quarter (US$23 million on an annualised basis). The company expects a further increase in sales during the December quarter as the operations continue to ramp up.
Mining operations
Unit 1 mining activities continue to progress well, with continuous miner activities achieving 85% of nameplate Mains productivity through the second half of September in the Mains areas of the mine.
The ramp up in Unit 1 productivity is largely attributable to operational efficiencies plus the cumulative benefits of alterations to coal cutting processes and mining unit support arrangements. It is anticipated that the Company will reach full nameplate productivity through continuous improvements and an increase in available underground mining area over the coming months.
Unit 2 has successfully been relocated away from the previously encountered geological fault, and has recently recommenced regular operations, which will allow the Unit to continue to ramp up production.
Illinois Basin (ILB) coal market
Western Kentucky coal markets are almost entirely domestic sales to utilities for power generation, underpinned by demand for power from large-scale manufacturing and industry in the region. Paringa is now shipping coal to both of its major customers, and maintains a very strong pipeline of forward sales, with 100% of 2019, 75% of 2020 and 50% of the next 5 years' production pre-sold.
In Paringa's primary sub-region of the ILB in western Kentucky, approximately 5.8 t of supply capacity has recently been aggressively consolidated by Alliance Resource Partners, who acquired and then closed the Pennyrile Mine (1.3 tpy capacity) in September and closed the high-cost Dotiki mine (4.5 tpy capacity) in August.
Consolidation in the western Kentucky market is positive for Paringa, which is now the only significant independent supplier of coal outside of Alliance and Murray Energy Corp. Local utilities are incentivised to contract with new suppliers such as Paringa in order to assist with market balance, providing a strong environment for additional Paringa coal sales.
Management changes
Paringa advises that Rick Kim has left as Chief Operating Officer of the company, effective immediately.
The company recently appointed Jim Middleton as Executive Advisor to the Board, with specific responsibility to provide guidance to the company's Poplar Grove coal mine (USA).