PERTH (miningweekly.com) – Coal miner New Hope Corporation has vowed to defend itself against legal proceedings against two of its now defunct subsidiaries, while also announcing that it had swung to a loss during the first six months of 2021.

New Hope on Tuesday told shareholders that liquidators from its former subsidiaries Northern Energy Corporation (NEC) and Colton Coal, which went into voluntary administration in mid-2019, intended to start proceedings against New Hoppe and certain former directors of both NEC and Colton in connection with alleged voidable transactions, insolvent trading, asset transfers and breaches of director’s duties.

Reports have suggested that the liquidators estimated that these claims were valued at some A$174.1-million, plus interest and cost.

New Hope told shareholders that while the company had not been served with any proceedings, it intended to defend ‘vigorously’ any proceedings that were started.

The company pointed out that the liquidators and Wiggins Island Coal Export Terminal in 2019 launched legal proceedings against New Hope asserting that the company had guaranteed NEC and Colton debts amounting to some A$155-million. The proceedings were dismissed by the New South Wales Supreme Court and the Court of Appeals, while the High Court dismissed applications for a special leave to appeal.

Meanwhile, New Hope on Tuesday also reported a 179.4% decline in net profits for the six months ending January, with the coal miner swinging to a loss of A$55.3-million, compared with a profit of A$69.7-million in the previous corresponding period.

Revenue for the same period fell by 34.4%, from A$618.2-million to A$405.5-million.

earnings before interest, tax, deprecation and amortization for the interim period was reported at A$81.2-million, with the miner announcing a fully franked interim dividend of 4c a share.

CEO Reinhold Schmidt told shareholders that while it had been a tough period for the resources sector as a whole, the company has set the foundation for a strong second half.

“The Newcastle 6 000 index has recovered from the lows in 2020 of $50/t to the current levels of more than $90/t. 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.”

Schmidt said that the focus moving forward was to increase annual production to the approved permitted capacity of the operation, while maintaining safety and cost efficiencies.

Meanwhile, he noted that the continued uncertainty around approvals for the New Acland Stage 3 expansion was impacting on the broader business, with redundancies at Queensland Bulk Handling, and New Hope’s corporate offices over the last six months.

“Redundancies continue as a result of nearing final Stage 2 coal at New Acland. With High Court of Australia ordering New Acland back to the Land Court of Queensland in the first quarter of the 2022 financial year, and the prospect of the project being placed on care and maintenance, a further impairment of the asset has been accounted for in the first 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.”

New Hope subsidiary New Acland Coal currently operates the existing New Acland mine as a 4.8-million-tonne-a-year opencut coal mine, however, the mine’s reserves are depleted. The Stage 3 expansion project will increase the mine’s yearly output to 7.5-million tonnes and will extend the operation’s life by some 12 years beyond the current end-date of mid-2020.

Once approved the New Acland Stage 3 project will create 187 new jobs within the first six months, 487 jobs within 18 months and inject A$7-billion into the economy.