TerraCom Reports 54% Jump in June Quarter Coal Sales, Sets FY27 Guidance at 2.0-2.2 Mt

Production Recovery and Sales Growth

TerraCom Limited (ASX:TER) navigated significant operational challenges in the June 2026 quarter, rebounding from the extraordinary rainfall that disrupted mining activities earlier in the year. Run of mine (ROM) production at the Blair Athol mine in Queensland rose 9% quarter-on-quarter to 446,000 tonnes, with saleable coal production up 11% to 336,000 tonnes. Coal sales surged 54% to 390,000 tonnes compared to the March quarter, reflecting improved shipment timing after mud and water in the pit delayed logistics.

Despite these gains, sales remain 22% below the prior corresponding period, underscoring the lingering impact of the weather event. The company ended the quarter with 69,000 tonnes of saleable coal stockpiled, a buffer ahead of expected production increases.

FY27 Guidance and Operational Enhancements

TerraCom reaffirmed its FY27 sales guidance of 2.0 to 2.2 million tonnes, confident that recent investments will underpin stronger output. The company has mobilised a third 350-tonne-class mining fleet at Blair Athol, with recruitment nearly complete and mining underway in a new pit area. This expansion is expected to deliver noticeable benefits from the second quarter of FY27.

Complementing this, TerraCom is acquiring a Hitachi EX3600-7 excavator to replace hired equipment for the third fleet, aiming to lower operating costs and boost equipment availability. The new pit will also enhance dragline utilisation by offering more flexible operating locations, further improving efficiency.

South African Operations and Market Conditions

TerraCom's South African business unit maintained stable sales, achieving 1.085 million tonnes for the quarter, a 10% increase on the previous period. The Kangala plant continued ramping up toll washing activities, providing an additional revenue stream while awaiting approvals and development at the Eloff project.

Thermal coal prices strengthened during the quarter, with the Newcastle benchmark rising from US$134 to US$143 per tonne. Demand in North Asia and India remained resilient, supporting TerraCom’s medium energy, low impurity coal products. The company is exploring new coal products for Asian customers, targeting trial shipments in the September quarter to diversify offerings and increase exposure to benchmark-linked pricing.

Financial Position and Corporate Developments

TerraCom held A$8.4 million in unrestricted cash at 30 June, alongside A$54.4 million in restricted cash tied to rehabilitation bonds at Blair Athol. The company received approximately A$12 million in proceeds from a June shipment post-quarter. No dividend was declared, reflecting a priority on balance sheet strength and operational stability.

Executive changes included the appointment of Mark Chadwick as a Non-Executive Director and Richard Clarke as Interim CFO and Company Secretary during the quarter, with Chadwick resigning after quarter-end. Safety performance remained strong, with a Lost Time Injury Frequency Rate of 0.6, highlighting ongoing commitment to workplace safety.

Technology and Hedging Initiatives

TerraCom is trialling internally developed artificial intelligence tools at Blair Athol to enhance reporting speed and decision-making quality. Although still in early stages, these tools promise improved real-time operational insights.

The company is also evaluating currency and commodity hedging strategies to manage exposure amid market volatility, with the Board endorsing a disciplined approach to such risk management measures.

Strategic Cooperation with Wintime Energy Group

Progress continues in TerraCom’s cooperation agreement with Wintime Energy Group Co. Ltd, focusing on government approvals and commercial integration. Wintime has prepared a preliminary exploration drilling plan to enhance geological understanding of TerraCom’s deposits, aiming to support future development. Further updates will depend on regulatory progress and customary conditions.