[ET Net News Agency, 11 July 2014] SouthGobi Resources (01878) said its raw coal
production for the second quarter ended 30 June 2014 dropped 14.1% quarter-on-quarter and
surged 224% year-on-year to 550,000 tonnes.
Sales volumes of standard semi-soft coking coal amounted to 400,000 tonnes, an increase
of 37.9% from the previous quarter. Sales volume of thermal coal jumped 4.1 times
quarter-on-quarter and 364% year-on-year to 510,000 tonnes. Total sales volume soared 133%
quarter-on-quarter and 184% year-on-year to 910,000 tonnes.
SouthGobi said coal prices in China declined further in the second quarter compared to
the first quarter of 2014 as a result of strong seaborne and domestic supply. The decline
in coal prices has been partially offset by the increase in the volumes in the second
quarter compared to the seasonally slow first quarter.
In June, SouthGobi reduced its production and placed about half of its workforce in
furlough. This furlough is anticipated to remain in place until the end of July subject to
market conditions. Contracted sales volumes are expected to be met from the combination of
the existing coal stockpile and reduced production volumes. Coal production in the second
half of 2014 will be paced to meet contracted sales volumes. (HL)