New Hope swings to loss amid delays to New Acland mine

Delays to expansion caused by ‘vocal activists’ are costing jobs in Queensland and hurting the broader business, says coal miner.

Pit operator Stewart Mills at the New Acland coal mine. Picture: Lyndon Mechielsen

Listed miner New Hope Group says continued uncertainty around the approval of stage three of its New Acland Coal Mine in Queensland could see the number of employees at the site fall from more than 100 to around a dozen while damaging the broader company, which has swung to a half-year loss.

The company on Tuesday said revenue for the period declined 34.4 per cent to $405m while a net loss of $55m was recorded, compared to a $69.7m profit in the prior comparable period.

An interim dividend of four cents a share, fully franked, was declared.

At the end of the last financial year the $1.10bn miner recorded a $156m annual loss, suspended its dividend and cut 200 jobs associated with its New Acland Coal Mine due to approval delays.

Last month, the High Court ordered fresh hearings into the planned expansion of the mine, after a group of Darling Downs landholders won an appeal against the miner’s moves.

On Tuesday New Hope CEO Reinhold Schmidt said this continuing regulatory uncertainty surrounding the New Acland coal mine was impacting the broader business and costing more jobs.

“Redundancies continue as a result of nearing final stage 2 coal at New Acland,” Mr Schmidt said.

“With the High Court of Australia ordering New Acland back to the Land Court of Queensland in the first quarter of FY22, and the prospect of the project being placed in care and maintenance, a further impairment of the asset has been accounted for in the half year results.

“Despite the ongoing delays, brought about by a handful of vocal activists, the company remains committed to push for the approval of stage 3.”

The Australian understands that between 20 and 30 Acland workers will be made redundant in the coming months, bringing the mine’s headcount under 100, compared to a recent high of 300 in November 2019.

If approval for stage 3 is not granted by November, the mine is expected to go into care and maintenance mode, necessitating only a fraction of the current workforce to stay on site.

Additionally, the company has within the last half year made approximately one dozen employees redundant at its Queensland Bulk Handling ports business and shed 80 corporate head office positions.

Company accounts show a $40.25m before tax impairment charge relating to Queensland coal mining assets, a $1.6m impairment charge relating to Queensland coal exploration and $10.1m in group redundancy costs.

A spokesman for the company said New Hope had received “less than $10m” from the government’s Jobkeeper scheme.

Despite the regulatory hurdles faced by the New Acland mine, Mr Schmidt said a foundation has been set for a strong second half, with coal prices lifting and production at its Bengalla mine improving.

“The Newcastle 6000 index has recovered from the lows in 2020 of US$50 to the current level in excess of US$90,” Mr Schmidt said.

“Bengalla continues to perform strongly for the business and, although production was down slightly in the first half due to the major dragline shut, it was above expectations.

“The investment in the dragline has delivered continued improvement in productivity to ensure a strong performance into the future.

“The focus moving forward is to increase annual production to the approved permitted capacity of the operation whilst maintaining safety and cost efficiencies.”

Mining staff at the New Acland coal mine, which is facing an uncertain future. Picture: Lyndon Mechielsen

New Hope also separately addressed media speculation concerning potential legal action by the liquidators of two subsidiaries in voluntary administration - Northern Energy Corporation and Colton Coal - against the company “in connection with alleged voidable transaction, insolvent trading, asset transfers and breaches of directors’ duties, in respect of claims the Liquidators estimate to be valued at $174.1 million plus interest and costs.”

“Although the Company has not been served with any proceedings, it intends to defend vigorously any proceedings that are commenced,” New Hope said in a statement.

Originally published as New Hope swings to loss amid delays to New Acland mine