What we own

In March 2015, the Group acquired a royalty interest in the Narrabri coal project, a major thermal coal and Pulverised Coal Injection (‘PCI’) coal mine located in New South Wales, Australia operated by Australian Stock Exchange listed Whitehaven Coal Limited (‘Whitehaven’). The Narrabri Royalty entitles the holder to royalty payments equal to 1% of gross revenue on all coal produced from within the area.

Performance

The Group received royalty income of £3.5m for the six months ended June 30, 2018, compared to £4.9m for the same period in 2017. This was due to ongoing geotechnical issues associated with an isolated fault in the coal body requiring Whitehaven to perform step around procedures which is causing reduced volumes from the operation at present. It has also experienced some delays in retreating the longwall given its increased size and the impact which this is having on the mine roof. Whitehaven has been working hard to address these ongoing issues and it was pleasing to see that it achieved a very strong level of ROM production in the final quarter of 2018 of 2.3Mt, 42% higher than the immediately preceding quarter which was impacted by a longwall changeover.