Asia ensures positive outlook for coal

October 30, 2008

GLOUCESTER Coal says the outlook for its coal business remains sound, despite the global financial crisis.

Chairman Andy Hogendijk also told shareholders at the company's annual general meeting that Gloucester was looking forward to another record profit this year.

"Looking forward, and notwithstanding some shorter-term issues associated with the current global financial situation, we believe the fundamentals for our coal business remain very sound," he said.

"Our quality coking coal with high fluidity will continue to be in strong demand by steel producers."

Gloucester shares jumped 13.65 per cent, or 49c, to close at $4.08.

Mr Hogendijk said the industrialisation of China and India over the next 10 to 20 years would continue to drive demand for coking coal.

"Thermal coal, too, looks to be a positive story as new coal-fired power stations are being built."

The company had locked in contract prices for the bulk of its coking and thermal business at prices over $130 a tonne. "We expect to report a record profit for the year," he said.

In August, Gloucester Coal reported a 2007-08 net profit of $23.44 million, a rise of 30 per cent on the previous year.