Continental Coal, the South African thermal coal mining company, has continued to reduce its overhead costs in order to optimise its business.

Its goal is to successfully reduce corporate, administration, finance, marketing and other general costs with significant reductions and results achieved. For the third year in a row it has reduced administration costs. FY2013 administration costs are 54% below FY2012 costs, while finance costs in FY2013 reduce by 44% on FY2012 costs and in line with FY2011 costs. Marketing and other costs in FY2013 reduced by 70% on FY2012 costs.

The company has restructured its Australian Perth office and optimised administration and finance departments to further reduce corporate overheads and personnel.

In a change to the Board James Leahy has agreed to step down as a non-executive director with immediate effect, thereby enabling the board to restructure. Non-executive directors have agreed to an immediate reduction in fees of 25% and, subject to shareholder approval, potentially up to 100% of fees to be paid in equity rather than cash.

“The company continues to look at ways that it can optimise its business activities, particularly in the wake of the current market environment and the impact that the fall in export thermal coal prices has had on our business. We have reduced corporate administration costs for three consecutive years, marketing and other costs are at their lowest level in four years and finance costs are also at levels last seen in FY2011.” Continental’s CEO, Don Turvey said.

“We have delivered these costs reduction over the past 12 months and during some extremely volatile market conditions. These initiatives will continue and we hope to be able to deliver further costs reductions in the coming year. I believe that the cost reductions will ensure the company is well positioned for the future.”

“We already have a robust and profitable domestic coal mining business in South Africa that is supplying Eskom. In FY2014, our new Penumbra Coal Mine will be increasing sales into the export market, and despite export prices having fallen by over 30% over the past 12 months, its low cost of production and coal hedging programme – with approximately 25% of sales over the next six years locked in at approximately US$118/t- will, with the continuation of these costs reduction initiatives assist the company in its transition towards being a profitable and successful coal mining company.”

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