Takitimu Mine in Southland Photo: Supplied / Bathurst Resources Ltd
Soaring coal prices caused by the Ukraine war and China's ban on Australian imports have delivered a nine fold increase in profits for the country's biggest mining company.
The New Zealand based, but Australian listed Bathurst Resources, reported a net profit of $45.8 million for the six months ended December compared with $4.6m the previous year.
"The benchmark price that our export sales are priced against remains high mainly due to strong demand and the ongoing uncertainty around the Russian invasion of Ukraine and China's economic outlook," Bathurst Resources chief executive Richard Tacon said.
Revenue increased 70 percent to $211.7m as global demand remained strong and buyers looked for alternate suppliers to Russia because of international sanctions.
The strength of prices more than offset the impact of inflation on Bathurst's costs, especially for fuel, machinery and labour.
The company also protected its revenue through hedging contracts, which lock in prices to guard against any market decline.
Bathurst has mines on the West Coast and Waikato, and a share in development in Canada, which overall produced 500,000 tonnes in the first half, much of it coking coal for overseas steelmakers, but some lower grades going to domestic users in both islands.
Tacon said the company was looking to control its costs, but expecting demand and prices to stay high.
"We expect our export segment to perform with the expectation that pricing levels will remain relatively stable throughout the remainder of the year and further cost reductions are able to be implemented."