Coalminer expects rich seam of profits

The miner yesterday said it expected to make $115 million to $125 million in profit in 2009-10, $10 million more than it forecast in May, thanks to better-than-expected production.

In 2008-09 it made $168.6 million, helped by higher price agreements signed before the financial crisis struck.

The upgrade is part of a wave of positive news for the industry. Miners have negotiated hefty price rises with Asian buyers for this financial year, and Canberra last week watered down the proposed tax on the industry.

New figures from the Bureau of Statistics showed coal export values were up almost 10 per cent in May to $397 million, leading an export bonanza. A key reason for the surge was higher prices the type of steel-making coal produced by Macarthur almost doubled to $US167 a tonne in the last quarter, up from $US85 a year earlier.

Commodities strategist at ANZ, Mark Pervan, said further price rises were likely next year, with India emerging as a large and growing market.

India's role could mirror China's role in iron ore, where Chinese demand has caused hefty price increases for all customers, Mr Pervan said. "What China has done for iron ore . . . India will do for the coal markets."

Coalminers have also been prominent in recent acquisitions by Asians, further fuelling market interest in the sector. On Monday, Thailand's Banpu offered $2 billion to buy the 80 per cent of Centennial Coal it does not already hold.

Yesterday Macarthur shares rose 0.7 per cent to $12.84.