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A light at the end of the (coal mine) tunnel?

World Coal,

Whitehaven Coal has predicted increases in thermal and metallurgical coal prices in 2015, in a positive sign for the beleaguered sector.

The commodity is Australia's second biggest export earner behind iron ore, but many producers, including Whitehaven, have been posting financial losses for several years.

Whitehaven was reasonably buoyant in its outlook as it posted record half year sales on Wednesday.

Thermal coal remains the lowest cost source of energy for power generators, it said, and the International Energy Agency (IEA) is forecasting average demand growth of 2.1%/yr until 2019.

"Whitehaven expects a stable to gradual increase in the price for its thermal coal qualities over the next year," the company said.

Demand from China had weakened, but increased elsewhere in Asia, with Whitehaven selling more to Japan and Korea.

Production cuts in the metallurgical coal market - used to make steel - were still working their way through and should boost those prices too, the company said.

But Whitehaven received lower prices in the December quarter than in the preceding three months.

The $US87.56/t for its metallurgical products was down from US$89 and its thermal coal products commanded $US66.07, down from US$68.

The New South Wales (NSW)-based miner's sales in the six months to December rose 6% from the same period a year earlier, to a record 6 million t.

Production of saleable coal was up 9% to 5.7 million t, despite a 17% fall in the December quarter, due to scheduled mine work.

Royal Bank of Canada mining analyst, Chris Drew, said it would probably be another tough year for coal miners, but Whitehaven was performing well considering.

Strong sales were generating cashflow, thermal coal was getting better prices than the benchmark, and with 10% of global metallurgical supply due to drop out through mine closures the outlook was bright, he said.

The Maules Creek project, which will become Whitehaven's best mine, achieved first sales last week and will increase its mix of higher priced metallurgical coal.

"It was a good quarter but they have a realistic and cautious outlook: maybe there is not so much downside this year but a slow grind to recovery," Drew said.

Australian bank Macquarie in its 2015 outlook said it expects coal prices to stabilise and rise as part of the supply and demand cycle.

Edited from various sources by Sam Dodson

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