Wollongong Coal is looking to improve its troubled finances – which could be further hit by a long list of fines and unresolved legal claims worth more than $40 million – by selling off large parcels of colliery land at West Dapto.
Posting a half-yearly loss of $23.7 million, the Illawarra miner has also outlined plans to ramp up production at its Wongawilli colliery.
Wollongong Coal’s (WLC) half yearly report, to September 30, was lodged with the stock exchange late on Friday afternoon, after the ASX halted trading earlier that day due to the failure to submit the document.
Read more: Wollongong Coal suspended from trade on ASX
It reveals the company is investigating the future sale of up to 175 hectares of “non-core” mining land at Wongawilli for a future housing subdivisions in the fast-growing West Dapto Urban Development Area.
Proceeds of the sales would be used “to reduce WLC’s financial indebtedness”, improving the company’s financial position and helping to cover operational costs.
The company notes the Wollongong real estate market could allow it to get “substantial proceeds” from the land sale, which would “not impact on the core mining operations of WLC”.
Already, the company has engaged advisors, sought interest from developers, carved up a 6.34 hectare “initial parcel” of 33 lots and lodged a DA with Wollongong City Council.
The half-yearly report also reveals mine production at the underground Wongawilli colliery has improved compared to the same period last year, despite a halt to all operations in May when contractor Delta went into liquidation.
Wollongong Coal took over operations from July, with mining restarting at a reduced rate in September. The company now says it is in the process of development and acquiring necessary mining equipment to increase the production rate from January.
Despite these improvement plans, the company remains dogged by financial strain, evidenced by the litany of legal suits and corporate fines detailed in the report.
For instance, it is facing two separate penalty notices over tax withholding from the Australian Tax Office, worth about $3.9 million each. The company disputes part of these penalties.
WLC also revealed it has received claims for payments of just over $4 million from an undisclosed party, which it disputes.
Additionally, last month, Wollongong Coal lost a case it brought against former mine owner Gujarat NRE, and estimates it will have to pay up to $2.5 million by the end of 2017. And it is defending a separate indemnity suit involving $20.4 million in claims from Gujarat NRE.
The company is also being taken to court by the NSW Government over unpaid rent and fees.