Under constant pressure from Japanese consumers to lower prices and volumes, coal producers like Westar Mining have been forced to control costs to remain competitive. That fact has been reflected in Westar’s net earnings for the quarter which, at $4.6 million, were just $500,000 lower than last year.
Chairman Jack Smith, confirms that prospects for the remainder of the year will depend on metallurgical coal sales. Noting that Westar’s two mines are running well, he says that “costs are under control and it is our intention to survive through a tough market.”
The company’s mines shipped 1.7 million tonnes of metallurgical coal and 300,000 tonnes of thermal coal to markets during the quarter. The Balmer mine was shut down for two weeks in February to reduce coal inventories. Effective April 1, 1987, the price for metallurgical coal was $44(US) and tonnage volumes will be reduced to Japanese steel mills.
An earlier suspension of dividend payments on the $2.65 Cumulative Redeemable Class A Preferred Shares Series 1 has been continued. Also, discussions with the company’s banker on a long- term restructuring of debt obligations continued during the quarter, he points out.
Westar is owned 67% by B.C. Resources which reported a $4.3 million profit for the quarter compared to $330,000 the previous year.
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