TerraCom Expects 1.52 Million Tonnes Coal Sales in FY2026 with Cost Improvements

Blair Athol Production and Cost Improvements

TerraCom Limited (ASX:TER) is aiming to rebound from a difficult March quarter by boosting coal production and reducing costs at its flagship Blair Athol mine. The company now expects FY2026 coal sales of approximately 1.52 million tonnes, slightly below earlier projections due to a shipment delay pushing a vessel load into early July. Had the shipment occurred before 30 June, sales would have reached about 1.60 million tonnes.

Cost control is also a focus, with TerraCom targeting a cost of sales near A$120 per tonne excluding royalties for FY2026, an improvement on the March quarter’s performance. Looking ahead, the Board is considering plans for FY2027 based on coal sales exceeding 2 million tonnes, underpinned by higher production volumes and greater exposure to index-linked coal pricing.

Balance Sheet Strengthened Amid Leadership Transition

TerraCom has bolstered its balance sheet following recent debt repayments, continuing efforts to enhance cash generation and financial resilience. This financial tightening follows a period of capital raises and operational challenges earlier in the year.

The company is progressing the appointment of a permanent Chief Executive Officer, with the interim CEO role currently filled by Chris Bourke after Danny McCarthy’s resignation in April. Meanwhile, an orderly transition of the Chief Financial Officer position is underway, reflecting ongoing leadership renewal.

Strategic Review of South African Operations and Moorlands Project

TerraCom’s Board is conducting a strategic review of its South African assets, aiming to ensure capital allocation aligns with shareholder return expectations. Details on potential outcomes remain pending.

Meanwhile, the Moorlands project continues to advance through the necessary approvals process, representing a key growth opportunity for the company. Updates will be provided as milestones are reached, signalling TerraCom’s commitment to expanding its asset base beyond Australia.

FY2027 Priorities Focused on Operational and Leadership Stability

The Board has outlined clear priorities for the coming year: improving Blair Athol’s production and cost metrics, strengthening financial flexibility, completing CEO and CFO appointments, advancing Moorlands approvals, and finalising the South African strategic review. These initiatives aim to stabilise operations and position TerraCom for sustainable growth.