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Whitehaven Coal targets further cost cuts

Whitehaven Coal is looking to cut production costs further in an effort to get back to profitability in the face of falling coal prices.

The miner's first half loss blew out from $11.6 million a year ago to $78 million for the six months to December 31, amid one-off writedowns and a slide in earnings and revenue due to the ongoing coal price slide.

Whitehaven cut its production costs by $8 a tonne to $63 a tonne in the past 12 months, which matches the fall in coal prices from $81 to $73 a tonne over the same period.

"Prices obviously have tracked down but we've tracked our cost profile down with that," Managing director Paul Flynn said.

The company's cost cutting efforts have received a boost from the lower Australian dollar, which hit a six-year-low on Friday, and falling oil prices, and Mr Flynn reckons it can reduce its production price by another one or two dollars a tonne during the second half of the financial year.

"We think we can squeeze the lemon a little bit further," he said.

"We reckon there's another $1 to $2 we can squeeze in the second six months."

Mr Flynn also said while the global coal market was oversupplied, production cuts elsewhere should see supply and demand in balance later in 2015.

"We do see some balancing entering the market in the next 12 months."

And he continued to talk up the longer term outlook for the commodity, citing the international energy agency's forecast for annual growth in demand of 2.4 per cent over the next five years.

Source: Yahoo! Finance