Mews come all the way from Highgate Hill. We also have Daryl Edwards, CEO, who you know. Tom du Preez from Ernst & Young, the company's auditors, is in the audience. He'll be available to answer questions as required. You may be asking why there are two other gentlemen up the front. I have some good news. We have strengthened and refreshed our board. I'll come back to this shortly, but I'd like to introduce you, Mr. Michael Chapman, and Mr. Staffan Ever, both very experienced coal executives. All right, I'll run through a couple of formalities, and then I've got a bit of a talk to take you through, and there'll be plenty of opportunities for questions along the way. The notice of meeting dated 29th of October 2024 has been made available to all shareholders and can be found online.
I will take that notice of meeting as read. Before moving to the resolutions today, I will now outline the procedures for today's meeting. In accordance with the company's constitution, as it's set and as set out in the notice of meeting, we have determined that voting on each of the resolutions will be conducted by a poll rather than a show of hands, and I now declare that poll open. Duncan Cornish, I may have missed you at the end, but our Company Secretary will be managing the poll. The results of the poll will be declared and released to the ASX later today after the close of the meeting. Only shareholders, proxy holders, or appointed representatives are entitled to speak or vote at this meeting. Only shareholders who are entitled to vote at this meeting may cast a direct vote on a resolution.
A total of 145 valid proxies have been received and are held by Link Market Services. In relation to the proxies, which I am holding as chairman, I advise the meeting that if a member has directed me to vote a certain way, I will vote in accordance with that direction as required by law on a poll. As the chair of the meeting and as detailed in the notice of meeting, I will vote where authorized or on directed proxies in favour of each resolution. For those attending the meeting in person, you can cast your vote by filling out a paper voting card you've been provided with on your arrival, and I welcome those shareholders who are unable to attend the meeting in person and have joined us online. You'll be able to view the live stream of the meeting virtually via the online platform.
Live online voting and online questions will not be available during the meeting. There was an opportunity to submit questions prior to the meeting. Rather than read every resolution in full and read out all the proxy votes received, we will display those on the screen for each resolution. So, in terms of the order of events, I will run through a chairman's address. I'd like to say brief, probably not brief, that might be a stretch, but look, there'll be an opportunity to take questions about that at the end of that address. We'll then run through the AGM resolutions, deal with all of those matters, opportunities to ask questions are provided at each resolution. Then we'll close the formal meeting, and Daryl will provide an update on the company's recent and upcoming activities from the AGM presentation, which was lodged with the ASX this morning.
So again, our shareholders can ask questions during Daryl's presentation. I'd ask if there are questions of a financial or technical nature that we wait until we've heard what Daryl's got to say before we tackle those. To ask a question, raise the card you are provided on entry and identify yourself. At all stages, I reserve the right as chair to rule questions as not pertaining to the AGM or out of order. Okay. Looking back at 2024, financial year 2024 was a year of record production for Bowen. It was also a year of consolidation following the rapid commencement of mining and ramp-up at the Burton complex in the previous year. The company mined a record 2.1 million ROM tons of coal over the year and sold a record 1.9 million tons of clean coal, 1.5 million of which was from the continuing Burton operations.
It was a year that featured a strong focus on reducing mining costs as we reach steady-state production levels. Our strip ratio, i.e., the quantity of overburden moved per tonne of coal mined, is a critical factor that drives our mining costs. And over the course of the year, the group strip ratio reduced from 16.7 to 1 to 6.7 to 1 in accordance with our mine plan. The continuing overburden operations are now performing strongly, and looking forward, we see a strong future for the asset with strip ratios running at under 7 to 1 for the next five years and significant operating cost reductions well underway. We have a 13-year mine life at Burton at current production rates and the ability to double production in response to higher coal prices with minimal capital investment.
Our financial results improved over the course of the year as we completed the mine start-up phase with maiden positive EBITDA reported for the second half of the year, driven by mining improvements at Burton and the closure of Bluff, and in spite of challenges from weaker coal revenues with Bowen's average received price per tonne dropping by 15.8% compared to the previous financial year. We've worked very closely with our debt providers who have been very supportive over 2024 to provide a stronger financial platform for FY 2025. Their strong support sets the company up well for coming years with the recent AUD 70 million equity raise forming the final critical component of strengthening the company's balance sheet.
The extreme state royalties tax that was introduced by the Queensland government in June 2022, just as we reached full first production, continues to be a major impediment for the company. This is illustrated by the state's royalty take of AUD 60.2 million in the previous financial year, soaking up all of our pre-royalty operating cash flow for the year, which is extremely disappointing knowing how hard our team has worked. Having invested significant capital in our operations, our investors and financiers have yet to make a return on this investment whilst paying these hefty taxes to the Queensland government. On a broader note, with costs across the Bowen Basin having risen substantially, many operators are now pushing into the new super royalty rates of 20%-40% of incremental revenue before reaching profitability, despite these high royalty rates being targeted at windfall profits.
Maintaining the world's highest royalty tax regime in Queensland is not compatible with a strong and vibrant coal industry and encouraging further investment in Queensland mining. Now, the reports of coal's death are greatly exaggerated. Coal has a very strong future. It provides energy for life and is essential for the production of materials which support the way we live. It keeps our lights on and our energy bills down and provides the raw materials for making steel that we all need. It builds communities and underwrites much of our prosperity in Australia. Bowen is a founding member of Coal Australia, the establishment of which has been a personal passion project of mine. Coal Australia is a new industry body designed to unleash pride in one of our largest export industries and provide a voice for coal workers, communities, and all supporters.
Recent polling conducted by Coal Australia demonstrates very strong support for coal in our communities. In our current cost of living crisis, this support goes well beyond traditional coal communities, with 79% of Southeast Queensland voters supporting using more of Queensland's coal domestically to keep power prices down. A clear 61% majority of Southeast Queensland voters also support incentivizing coal companies to stay in Queensland with more internationally competitive royalty rates. While some of our political leaders play catch-up on the importance of our industry, community support is very strong. I would encourage all shareholders to visit the Coal Australia website and join over 16,000 supporters as friends of coal who have signed up to support our critical industry. As the world attempts to electrify, decarbonize, and urbanize us further, it will require more steel, and more steel will require more coking coal.
It will also require more energy, driven by economic growth and our insatiable demand for data. Global coal demand is at record levels, and coal will continue to provide low-cost and reliable electricity and lift people out of poverty around the world for many decades to come, pointing to a strong future for Queensland's world-beating high-quality coal. In the face of record demand, global coal supply remains constrained due to a lack of new mine approvals and increasing regulatory and capital constraints. In August 2024, respected global energy analyst Wood Mackenzie reported that the availability of premium hard coking coal was a major concern to international steelmakers. Wood Mackenzie coal supply asset data suggested a net drop in premium supply by 2027. The growing gap between demand and supply should support higher prices over the longer term. We've made some hard decisions that have increased our performance.
We've faced some significant challenges this year alongside others in the coal industry. Significant weather, route delays, and increases in labor, consumables, fuel, and power costs have impacted across the industry. A scuttle attempt by a former shareholder to unseat the board was an unfortunate distraction. Amid testing times, we've made decisive moves to make the company more efficient and ready to capitalize on the expected positive market fundamentals ahead. We closed two pits during the reporting period. Coal price weakness, unexpected geological difficulties, and extreme state royalties led to the difficult but necessary decision to close the Bluff operation near Blackwater. While the Broadmeadow East mine near Moranbah was suspended as the cost of relocating a power line traversing the mining lease don't currently eclipse the value of doing so.
These hard decisions weren't made lightly, but allowed the company to concentrate its efforts at the main Burton Mine Complex, where our larger, longer-life mining operations with higher margin deposits better utilize our infrastructure at lower cost to maximize returns. The Ellensfield South mine, which neighbors the CHPP, Coal Handling and Preparation Plant at Burton, produced first coal in September 2023, and in the June quarter produced a record 820,000 tonnes of ROM coal. Next door to Ellensfield South, the Plumtree North mine is currently under development and will ensure production levels remain above processing capacity for the next five years. And Daryl's got a further update on that shortly. Now, as I alluded to earlier, we've made some leadership changes ready for the next stage of growth.
So Bowen announced today, just a few minutes ago, that has made several changes to the board as we complete our planned transition from explorer to steady-state coal miner. I will transition out of my role as Executive Chairman back to a Non-Executive Director role after the company appoints a Non-Executive Chairperson by the end of the first quarter next year. Mr. Staffan Ever, a co-founder and Executive Chairman of Square Group, a world-leading natural resources marketing and trading house, has been appointed as Non-Executive Director. And Mr. Michael Chapman, an experienced mining engineer who previously held chief operating officer roles at White Energy and Felix Resources, has been appointed as Non-Executive Director. We welcome both of them. These changes continue a process of leadership renewal this year, marked by the appointment of Mr. Daryl Edwards as our Chief Executive Officer in January and the appointment of
Mr. Malte von der Ropp as Non-Executive Director in April. Now, Daryl has been critical to the current operating success and discipline that the business is now achieving. Daryl was previously the company's chief financial officer and brings substantial senior management experience across coal operations and financing. He is highly motivated across every part of our business in detail and has already delivered marked improvements in the company's cost structure, internal controls, and focus. Daryl is more than ready to run this business without the need for an executive chair. The appointment of Michael and Staffan to strengthen our capabilities considerably. There's few that match Michael's mining experience. He's worked across many different commodities around the world and drove the considerable operating success of Felix Resources prior to its $3.5 billion takeover by Yanzhou.
Staffan's company, Square Marketing, is not only a major shareholder in Bowen but will open a world of sales opportunities for our premium steelmaking coal and our thermal coal. Staffan and his team have deep relationships into the world's biggest coal buyers and steelmakers and tremendous experience in maximizing value for their clients. And we look forward to working with Staffan again. I'm personally excited by the opportunities that lie ahead for Bowen. And now that we've progressed on our transformation plan, it's the right time for me, my family, and the business that I return to a non-executive role and continue to support Daryl and the team from the boardroom. If you'll allow me to reflect a little, I joined Bowen in December 2018 as a non-executive director at the request of Gerhard Redelinghuys, the founder.
I stepped up to the Executive Chairman role in February 2021 to lead the company's growth from exploration to production via acquisition. I'd worked alongside Gerhard, the founder, when I was running Stanmore, and I did like his approach to the job. When he asked me to join and help him grow the business, it was an opportunity too hard to resist. While it's had its challenges and tested my resilience at times, my experience at the helm of Bowen has been a highlight and something I'm very proud of. I can speak firsthand to the personal toll the last 12 months has taken on all of us, all of our people, including the sleepless nights and the tremendous amount of work that's been done out of sight and below the radar, often between the hours of midnight and 5:00 A.M.
So we've done that to protect and promote the interests of Bowen shareholders. We certainly haven't got everything right along the journey, and we've lost a few good people along the way, but I can say with 100% confidence that the efforts of our small team led by Daryl could not have been better. When the going got tough, the tough got going. Put their lives on hold to retain and restore value in this magnificent company, and for that, I'm extremely grateful. From little things, big things grow. Having seen Stanmore grow from its humble beginnings to the giant it is today firsthand, and having witnessed many of today's industry titans go through extremely challenging times before reaching greatness, I remain very positive about the opportunity for Bowen to realize its phenomenal potential, given our first-class assets and, importantly, our people.
We are well positioned to make the most of the opportunities ahead. As a coal man, I've come to learn that the strongest steel comes from the hottest fire. We've been tested in the past year due to a long list of factors, but Bowen is now in stronger shape to take advantage of the once-in-a-generation opportunities ahead. As demand for steelmaking coal grows and supply remains heavily constrained, Bowen Coking Coal, located in the heart of the world's best coal country, the Bowen Basin, will answer the world's call for more high-quality coal to be delivered efficiently, safely, and sustainably. Whilst we'll no doubt face future challenges, we also have a tremendous opportunity to grow shareholder value as we demonstrate the underlying value in our assets. The board and management stand united and positive about the future. Thank you.
Okay, so as I said, there's going to be plenty of opportunities for questions. If anyone has any questions about that, you're free to ask now, or we can hold them over till the end. Okay, well, I might continue on, and then we'll get some more questions at the end of Daryl's talk. Okay, so our table for discussion is item one, the annual financial report for the year ended 30 June 2024. Are there any questions in respect of the annual financial statements? There are no written questions being received by the company or by Ernst & Young in respect of the auditor's report or the conduct of the audit. Are there any questions for the auditor in respect of the annual financial statements? If not, we'll now move on to the formal resolutions to be considered. Resolution one, adoption of the director's remuneration report.
The remuneration report sets out the company's remuneration arrangements for the executives and directors. This resolution is non-binding and advisory in nature, which gives shareholders an opportunity to ask questions or make comments concerning the remuneration report. Are there any questions in respect of resolution one? The proxies received are set out on the screen, showing a clear majority in favour. I also note that the against votes are less than the 25% mark, therefore avoiding a strike. Resolution two, re-election of Nicholas Jorss. Should I stand aside? I can do this one? Okay. Resolution two is an ordinary resolution in accordance with the company's constitution. I retire as a director of the company and offer myself for re-election. Details of my experience were set out in the explanatory memorandum attached to the notice of AGM and the 2024 annual report. Are there any questions in respect of resolution two?
I note the proxies received are set out on the screen, showing a clear majority in favour. Resolution three, re-election of Malte von der Ropp. Resolution three is an ordinary resolution. In accordance with the company's constitution, Malte retires as a director of the company and offers himself for re-election. Details of Malte's experience were set out in the explanatory memorandum attached to the notice of AGM and the 2024 annual report. Are there any questions in respect of resolution three? No. Then I note the proxies received are set out on the screen, showing a clear majority in favour. Resolution four, re-election of Neville Sneddon. Resolution four is an ordinary resolution. In accordance with the company's constitution, Neville retires as a director of the company and offers himself for re-election.
Details of Neville's experience were set out in the explanatory memorandum attached to the notice of AGM and the 2024 annual report. Are there any questions in respect of resolution four? I note that the proxies received are set out on the screen, showing a clear majority in favor. With regard to resolutions 5A to 10B, which were in the circular, please note that they were included in the notice of AGM as a contingency for the recent capital raising. Due to the nature of the rights issue, it's been determined that 5A to 10B inclusive are no longer required and therefore withdrawn from consideration. Are there any further questions? As previously noted, for those attending in person, we'll now collect your poll card. If you require any assistance with your poll card, please let us know.
If you don't have a poll card and believe you should, please see a Link representative for assistance. Ladies and gentlemen, that concludes the business of the meeting. The results of the poll will be announced to the ASX later today. On behalf of the board, I'd like to thank you for your support and I now declare the meeting closed. Daryl will now update you on the company's recent and upcoming activities with the AGM presentation lodged with the ASX prior to the start of this meeting. If you've joined us online, you're welcome to stay logged on and watch the presentation, and then there'll be an opportunity for questions from people in the room or pre-submitted questions thereafter. Thank you.
Thank you, Nick. I trust everyone can hear me. Sometimes a South African accent puts me off as well. So thank you for your time. Thank you for joining us today. I appreciate all the shareholders who have joined us today in person and to those online. I'll take the disclaimers as read if that's okay with the meeting. I'm mindful of time, so we're going to flick through some of these slides quite quickly, and we'll spend some time on those which we think are a bit more of an update for the market and for shareholders. So the business overview, nothing's really changed from what we've previously presented. Just as a reminder, the slide that you can see on the screen. All the action on the right-hand side of your page is the map of the Burton Mine Complex.
All the action is happening with the green dot that you can see and the pink and the blue dot just below that. So that's the CHPP Ellensfield and Plumtree Assets, which we are currently operating at the moment. We have additional assets to the north of those assets being Lenton, Isaac, and Burton North and South. And then further down south, you'll see there's a haul road, a dotted line that runs down. That's a 37-kilometer haul road. That's a dedicated haul road, and we run dedicated trucks on that haul road down to the train loadout facility in the south, which is your purple dot. On the way down, we pass Broadmeadow East, which is currently on pause from an operational perspective. So what is the Burton Mine Complex?
It's $500 million worth of refurbished infrastructure, and we have open-cut operations with a mine life of about 13 years based on current production rates. We've provided the market with some outlook, so that outlook for financial year 2025 is between 2.7 and 3 million tonnes of run-of-mine, and that delivers 1.6 to 1.9 million tonnes of clean coal. What does that mean? From a resource and reserve perspective, you'll see the slide on the screen is nothing new. We've presented this to the market previously. But to summarise, the reserves that we've got on there, you'll see the guidance that we've provided for this financial year is on the lower end of the potential of this asset. The wash plant that's facing you at the moment on the right-hand side with the lights that are on, that is the module that is currently operational.
It is one module. There's a copy module on the other side being module two, which is capable of being refurbished, but we haven't done that at this particular point in time. The key production targets of 2.8 of production and 1.8 million of sales are largely in line with our guidance for this financial year, as you can see, lower end of potential. Where does that leave us? That leaves us to the next slide, which is our five-year production plan. The solid lines that you see on the screen, the solid capacity line, which is the horizontal line, and the solid bar graphs is the production line from the run-of-mine. That is what's currently installed. That is what's operational at the moment, and that is what has been funded by the recent capital raise.
So this is where we are for the future, the next five years. Where does that leave us? It actually leaves us with a bit of space for expansion and opportunity for growth. So we are busy with scenarios looking at what we can do to implement the dotted lines that you see on the screen being either module two or additional capacity and additional run-of-mine material within the business plan. So that's what we're busy with. When we're ready with some additional scenarios, we'll come to the market and present those. But as we are at the moment, the base case is the solid lines that you see on the screen. So how have we performed? Look, we didn't do that well, and this is where we are now. So we didn't do that well, and why didn't we do well?
We had high strip ratios, you heard in the next presentation, high strip ratios, not much coal. We didn't have the favorable coal mix, so we were selling more thermal coal than coking coal. So where are we now? So you'll see on the screen from FY 2024, quarter four, so the third bar graph on the right-hand side, this is what we're talking about, steady state. So steady state means steady state coal flow, steady state sales, and steady state production at a constant strip ratio. So the first two quarters being quarter four, 2024, is done, and quarter one, 2025, is done. We've reported that to the market, and our outlook for the current quarter that we're in is consistent with that. So from a production perspective, we believe we're at steady state in an operating capacity. So what does that give us?
It gives us a stable base to grow from. So where does it start? Step one, we've got to reduce our costs. How do we do that? Step one is to get the mining costs under control. So you'll see we started in September 2023, which is a year ago, a bit more than a year ago now, $110 a tonne was our mining cost. Now, this slide that you see is inclusive of OpEx and CapEx. It refers to all dirt that moves in relation to coal. So we've gone from 110, we've halved that to 53. So step one is get your mining costs under control. I think we're pretty much at the point where we can tick that now. Step two, other costs. So let's keep going. What have we done?
So those items you see on the left-hand side, from one to five, the first five rows are ticked. Those are done. So we believe we've taken about $21 million of cost out of this business in addition to the mining cost reduction, which equates to about $11-$13 per product tonne. Are we there yet? No. We've still got some more to go. Have we ticked the big items? Yes. So we've done a lot of work on reducing that cost base. There is more work to be done, and that's a process which we are following currently. So a slide update on this slide. We released this part of our equity presentation. We thought there was $2 million of overhead reduction. We've updated that. Now we think there's potentially $4 million a year, which we're busy taking out the business.
Other projects, we're looking at automated bin loading, which is the trucks that you see on the bottom of that screen. We would like to automate the loading of those trucks underneath the bins. So we need to skin the bins first. We're busy reskinning the bins at the moment with new linings. And then we'd like to connect our assets to permanent power, something that we've really struggled with, to be honest with you. A lot of delays, a lot of red tape, a lot of bureaucracy to actually get connected to permanent power within the state. So we are busy with that, and we haven't given up. So it's not going to happen this financial year, unfortunately, but we are looking at connecting that for the next financial year.
So those photographs that you see on the right-hand side, some of the work that we've done. You'll see the top photograph is just basically run-of-mine that's coming out of the pits. It used to be stockpiled at the mine, and then we'd pick it up again and take it to the wash plant. So we were re-handling a lot of the material, and part of our cost reduction is while it's in the rigid dump truck to directly tip it straight on the ROM pad. So those trucks are taking coal all the way up, and you'll see those little piles there that give you an indication that it's coming in the back of a rigid dump truck. And then the bottom photograph, we've changed trucking contractors. We've changed the trucks on site. We've changed dozers. We've changed loaders. We've changed water carts on the haul road.
We've gone from top to bottom and taking out waste within the system, changing contractors, and making sure we're as lean and mean as possible. Yes, as I said, there's more work to go. Where does that leave us? What happened? The graph on the right-hand side shows you the average sales price that we receive, and the line underneath it shows you our free-on-board cost. That tells you if we're making margin or not. What happened from the previous quarter to this quarter? Sales prices came down 5% and 22% from the March quarter. That is out of our control. We need to be able to operate under those environments. EBITDA for the last quarter was impacted by circa $5 million if we had had the same selling price.
What happened there is between AUD 216 a tonne and AUD 193 a tonne, you'll see there's margin in there. So out of that comes royalties, and out of that comes what we call inventory movement out of the balance sheet. But the reason why there's a loss there is July wasn't a great month for us. So July was a really slow shipping month for us. We only had one vessel go out. But after July, we've actually had a pretty good run. So happy to say from August to October, we're in line with our expectations. This is our outlook. I'm not going to dwell on this slide too much. You've seen this before. So this shows you our history of where we have been. We spoke about 16 to 1 strip ratios, and we're sitting at about 5.9 to 1 from the last quarter.
We see less than 7 going forward, and on the right-hand side of the graph tells you where we think the coal's coming from. So Ellensfield South Pit will be delivering coal until June next year. And as Ellensfield transitions to lower coal flow, we need to supplement that with the coal from Plumtree. So I'm proud to say, as of this morning, the team actually did something which I wasn't expecting until today. So we've actually announced this morning, first coal coming out of Plumtree. So coal was mined this week, and you'll see the announcement on the ASX platform. Unfortunately, it's not on the presentation, but they did it by surprise. So congrats to the team there. So first coal is actually targeted into this third bar graph. So the dark blue line has actually come across first coal come out of Plumtree.
What does that mean from a cost perspective? Where are we on costs? The previous quarter, we said we'd be at AUD 188 a tonne. We weren't. We were at AUD 193. Why weren't we there? We missed it by AUD 5 a tonne, which was largely attributable to demurrage costs, which were out of our control. We were close. We'd like to keep a record of what we gave the market and what we're telling you to what we're actually delivering. Look at quarter two 2025. We're forecasting AUD 150 a tonne, and from there on, circa AUD 140. Pleased to say, so far for quarter two 2025, we're on track. What does it look like at the moment? Let's take you to site. This is Ellensfield South. This is looking north. You're on the southern side of Ellensfield looking north.
Those of you who can see the screen, all the way up the left, you'll see coal facing the sunlight from the southern side all the way through to the northern side of the pit. There is a strip ratio of 2.7 to 1 remaining in this pit. Coal remaining is a 1.7 million tonne of ROM, and we've mined a million tonne so far. If you take that million tonne that we've mined so far with the tonnage that is left, 1.7, that provides you the bottom end of our guidance. That's our 2.7 million tonne ROM guidance. Our focus is decoaling this pit between now and June, so the end of the financial year. We've sold 562,000 tonne of coal so far up to the end of October.
And what that gives you, those four months, that run rate is circa 2 million tonnes, a little bit greater than 2 million tonnes a year. As you know, our guidance is 1.6-1.9 million tonnes. So at the moment, we're running a little bit ahead of our guidance. And we've got ample ROM stocks, so 133,000 tonnes of coal that we had at the end of October. So that's looking north. If we turn around and we start looking south, so you'll see in the bottom end of your photograph, that's Ellensfield South, and the top end of your photograph is Plumtree North. So this slide and the next couple of slides is basically a thank you to shareholders.
If we didn't get the capital raise away and we weren't supported by the likes of Square Resources and Taurus and major shareholders coming in, Ilwella and the Crocodiles, we wouldn't be able to tell you the story. So that's looking south. This is where we are pretty recently, as of a couple of weeks ago. Looking south, you can see the development of Plumtree in the top end of your photograph. The creek sits in between. So this is Teviot Creek. So we've had to jump the creek because of environmental approvals. It's very difficult to get these approvals within Queensland. It's not something that we've given up on, but we are still busy trying to do that. And then on the right-hand side, you can see what we've done.
We've done a crossing, so a Teviot Creek crossing, which a team has done on time and on budget, and that's been handed over to the mining contractor. What that means is coal flow from Plumtree will come across that bridge and go directly to the wash plant. And it also means that waste from that pit will come across into Ellensfield South. So did we get it right? No, we got it wrong. So sorry to tell you we got it wrong because we said coal would come out in quarter three. We got that wrong. It's come out earlier in quarter two. Are we on track? Let's have a look. That's the mine plan. So before we started this pit, we said, can we be custodians of capital? Can we manage capital strictly? That's our mine plan. That's what we said we're going to do.
That's what we planned. Where are we today? Just forgive me on this one. I'm going to overlay it. So you can see the overlay of the mine plan on top of what we actually have done. Difficult to see, but you'll see all the reds is where we should have been, the blues where we should have been, and a little bit ahead on some blasting and advanced development. So we're on track. It's working. Everything is going according to plan at Plumtree so far. Oh, sorry. Right. So what I had prepared for you today is to let you know that we've got the first test pits available at Plumtree. So you'll see the two seams. This is the Leichhardt seam that continues from Ellensfield across the creek and into Plumtree.
On the top end of your screen is the Vermont seam that once again carries over. Those were test pits which we dug earlier in the week when we prepared this presentation. Since then, our team on site surprised us by digging coal out and excavating coal from the Vermont seam. We've started mining already. Step three, well, you can't generate cash if you don't use your assets. This is one of the major steps that we've been focusing on is the asset available and are we using it? Availability of this wash plant has been fantastic for a number of quarters already, but the utilization hasn't been good. I'm proud to say for the last three quarters, we've utilized this wash plant.
In fact, we've actually above utilization expectations, which means that every opportunity we're getting to generate product, which will generate cash and sales, we're actually taking. So we're very proud to say we're consistently running at 400 tonne an hour. We've produced 62% during FY25 as coking coal, and we've got an ample amount of product stock on hand. So we had 192,000 tonne of product stock at the back end of October, and we expect the reduction of that largely at the back end of this quarter. So we're expecting a really good railing month and shipping month to deplete those ROM stocks to, I would say, sustainable levels. We'd like to get that to about 80-100,000 tonne.
The picture that you can see on the right-hand side, just to show you, so we spoke about module one, which is on this side of the asset, and module two sits on the northern side over there. And if those of you can see the screen, in the yard at the back, our screens, our centrifuges, our pumps all ready for module two. We haven't committed capital to module two because we wanted this wash plant to be the bottleneck in our whole system, which it is. We're proud to say this is the bottleneck. The other bottleneck we've got is down at the train loadout facility. The coal is in the right place. The coal's not sitting on the mine. The coal's not trying to get up the road. The coal's not trying to get down the road. It's all in the right place.
Before the wash plant, all our ROM coal is sitting up the top here, and all our product coal is sitting at the TLO. We've done well there. That wash plant is capable of being upgraded. And as I say, there's a lot of equipment on site already. We estimate between $12-$15 million to get that wash plant operational, the second module. We have done things like PLCs. We've done a lot of work on that wash plant already. We potentially even look at maybe introducing some circuits at some point in time. We'd look at this running 400 tonne an hour. Potentially, we could do a little bit more out of that, out of module one before we upgrade module two. We're busy. When I said earlier in the presentation, we're looking at all these scenarios.
Those are the scenarios that we're busy with. Do we take it a little bit higher? What circuits become affected if we increase the tonnage and we look at potentially upgrading those circuits? What's important, and we've mentioned this a couple of times, is we've done a CHPP audit and a Limn modeling throughout the wash plant. That gives us a lot of intelligence, both effectiveness and efficiency. How do we improve this wash plant further? We're busy with those processes at the moment. On the customers, I'm not going to spend too much time on this other than to let you know, as you know, we contracted our metallurgical coal for Japanese financial year up until March 2025. We're in the process of having discussions to renew those contracts. As you know, we've transitioning over to Square Marketing, who will be assisting us from this point forward.
Once again, I'm not going to tell you where the prices are going to go. What I can tell you is where they've been, so just looking at that graph, we actually shipped, so if you focus your eyes on the light blue line, which is the Newcastle thermal coal, we shipped our first coal over there. So as the price started coming down, the first vessel that was sent out, thermal coal out of Broadmeadow East, was $220 a tonne. The next vessel was about $80 a tonne. So that gives you an indication of while we were trying to build these mines, where was the price? And then during this period where you see the peak in the blue line, the dark blue line at the top here, that's when we were trying to get Ellensfield South to steady state. So where are we now?
I can tell you that we're over here, and we're at steady state at that price environment. We're trying to set the business up, and we're taking action to operate under that environment. We don't know where it goes to from here, but certainly we'd like to be able to look after ourselves from that point forward. Nick mentioned in his chairman's address the death of coal is overexaggerated. He's underrated. Look, what I can tell you is, from our knowledge, there's a massive underinvestment in coal mines. We've seen the recent Anglo American process where they sold Anglo Coal, pretty good numbers that they've got. It tells you there's appetite for these types of assets. Certainly, metallurgical coal is definitely in the focus going forward. I'm going to touch on this slide. Step four. This is the last step. Let's be honest. Let's take stock.
This picture of the share price graph, we need to own. We need to own so all of us, your shareholders, together with us, we've lost money. All of us have lost money. Step four is to correct this. We acknowledge that. We want to fix it, and we're addressing it. How do we address it? We're focusing on cash generation. We want this business to generate cash. We want to deliver. We want to continue to deliver. We want to do what we say we're going to do, and we'd like to communicate more with shareholders. So we'll be communicating a lot more with shareholders going forward so you know exactly where we are with this business. On the right-hand side is the debt levels that we've got, so you've seen recent adjustments in the debt.
There's about AUD 97 million of secured debt in this business. Our focus is to reduce this debt as much as possible. We are targeting the debt reduction, certainly the secured facility with Taurus. We're targeting to reduce that as far as possible. And we're also targeting for replacement the subordinated facility, which is the debt is actually in the form of a rehabilitation guarantee to the Queensland government. So we are focusing to strengthen our balance sheet to provide that guarantee to Queensland government by other means. And then I'll just touch briefly. We've put the new top five shareholders onto the screen for everyone. I don't think there's any secrets here. So Square Resources is at 22%. Regal Funds and Associates, including Taurus, is at 13.8%. The Crocodiles, Ilwella, are on the screen as well. Mindful of time, moving on. So Nick has mentioned the board changes.
I just want to touch on a couple of things. One is to say thank you to Nick for everything that he's done for this company. Nick, I know you're still going to be on the board, so I'm really excited to still be working with you, and you're obviously going to make way for a new chairman, and we appreciate what you've done. We appreciate the fact that you acknowledge stepping sideways and allowing someone else to take the reins, and look, change is inevitable in this business. So I look forward to working with a new chairman, and yeah, I think looking forward to working together with the new directors as well, so Staffan and Michael, thank you very much for agreeing to join the board. We look forward to working together.
And the last point I want to make is just I want to say thank you to my team. Appreciate it.
Thank you.
We'll take questions. Yeah, questions. Sorry, there's a roving mic. Can we just get a microphone? Thank you very much. Then at least we can all. Yeah. And there's one on the table.
So Glenn Risson, shareholder. My question is concerning we hear ROM coal and sales coal, and I understand the difference, but basically there's a one-third drop-off, and that has a lot to do with the sales product required, contracted, and I fully understand that. But I'm just wondering, what is the ROM quality or how standardized or concentrated or improvable or whatever is the ROM quality compared to the sales quantity and what we might expect going forward in the next 12 months, two years in that sort of space?
I know there's a lot of moving things, including how the coal handling plant works. I don't understand it all, but I know it's there. So the question is, clarify it for me, please.
Thank you. That's a great question. I'm happy to take it. So look, it's a great question. Thank you very much. When you're in a position where you haven't got the ROM coal and you've got ships waiting, you're obviously trying to rush and get as much out as you possibly can. So you're avoiding demurrage and trying to fulfill your customers' vessels. We've been fortunate more recently that we've actually had the ROM coal to be able to build the vessels ahead of time. So where we are now, and just maybe if I can just show you a couple of slides just to demonstrate what we're actually busy with.
So now that we're in a position where the ROM coal is steady, we're actually able to focus on doing things like clean coal mining. So what we've introduced is you'll see a small little excavator there, that little yellow one. So that little yellow one is now in a position to start cleaning the coal before it gets to the wash plant. So a big focus of ours is the feed ash component going into the wash plant. So the more feed ash you've got, the lower your yield, obviously. So we're focusing on trying to reduce the feed ash into the wash plant to improve our yield. What it also does, it also improves your capacity within the wash plant. So if you're sending a lot of ash material into your wash plant, you're eating up capacity.
So what we'd like to do is we'd like to clean that coal as much as possible before it goes through to the wash plant. On the Leichhardt seam, we mine that seam cleanly, and we take that directly to the wash plant. On this Vermont seam, we actually split it. So we split the tops. We take what we call the V3 uppers, and we stockpile that separately. And we wash that as a thermal component because we've got a high ash component within that material. And the balance of the Vermont seam, we wash for coke and thermal together. So you'll see what we're doing there. And this was never done before. So we're actually in the process of cleaning that coal going forward. So we fully man on site. Labour has been a challenge for us. We fully man on site.
So we've got the operators available to be able to do that for us.
And the layers of coal with consistency?
Yeah. So I think between the pits, so in the Ellensfield South pit, the Leichhardt is a separate distinct seam, and the Vermont is a separate distinct seam, and there's three components of that Vermont seam. As you go into Plumtree, it stays together, but as you go further to the south, they start splitting a little bit. So it's part of our mine plan that we take that into account. What we're looking at doing is getting a dedicated coal fleet to be able to handle that, to reduce that feed ash.
Does that answer your question?
I'll probably ask two more questions in there, but that helps us.
Thank you. I think I'm good. Happy to answer them, yeah.
It's on Nick just now.
Look, the other thing I think worth noting is that with a fresh set of marketing eyes coming in now with Staffan and Kevin, we're very keen to sort of have a good look, particularly our thermal, but also our met coal. And I think, yeah, we've been busy trying to get to steady state, get the mine up and running. And now, as Daryl says, there's a full audit of the wash plant going on. Where can we improve? Where can we improve yields? But also, where can we push ash a bit higher? So I think met coal is probably a little under, and what we should be, what we can get away with in the market. So we can potentially push that a bit more and get some more yield out of it.
And I think in a thermal sense, it's about where's our coal needed rather than sticking it in with traders, which boilers, which power stations really value this coal, what's the value in use, and working through that. So I think that's what I'm particularly excited about, is getting these guys in the room and going, seeing customers and actually branding our coal. So it's not 5500 coal or HCC 64. It's our coal, and it's unique, and it's got some unique selling points. So that's the next step for us, I think.
Thank you, Mr. Chairman. George Bomber, Director of Faircase. Just a couple of questions. You said the price of coal is going down. Just wondering what steps you are taking to reduce your overall cost. I find this quite confusing having the same screen up here twice on here rather than one.
I think it would make it a bit easier to follow what you're doing. But we have quite a big board of directors now. Do we need so many directors? This is, again, a cost to the company. And when things aren't going so good, you need to reduce cost as much as you can. With your forward contracts, are they at a set price? If you're renegotiating contracts at the moment and the price is down, are you negotiating those at a short term? And when the prices are up, are you negotiating those contracts at a longer term?
Daryl, I'll let you take most of that, but I might just, in terms of the board composition, this is probably the first time we've been accused of having too big a board. In about three years, I think we've lost quite a few directors.
Yeah, we are refreshing the board deliberately, bringing in new skills, the marketing skills and the mining skills that we think we need. We've been running on effectively three directors for quite a while. But look, watch the space. We'll continue to evolve what we do there. We are very mindful of costs, and I think Daryl ran through a lot of the initiatives that we're taking. But yes, the answer is yes, we are taking costs out of the business, and I'll just let Daryl reiterate some of that.
Thank you, Nick. And George, thanks for your questions. Look, what I said there is the price of coal is not going down because we don't know where it's going. What I can let you know is we're setting ourselves up in this business to operate under this price environment. So we don't know where it's going.
What do we think? We're very positive and bullish on the met coal market. I think I just don't want to put words in Staffan's mouth, but the fact that Staffan's involved and has been involved in marketing for a number of years and has contributed significantly to this business, taking over 20% of the equity of this business, that should send a bit of a signal to the market and what Staffan and his team see. You're welcome to have a chat to him and ask him his views on why he invested in this business. We're positive on the future. We're trying to set ourselves up to operate under this environment, which means a reduction of cost. I think we've probably covered a couple of the slides, so I'm happy to explain a bit further to you.
But certainly, we started with step one, which I took you through, which was getting the mining cost under control. And step two was the balance of cost. This is the step two slide. And as I said, we're not finished yet. We're keeping going. So we have hit the big items. Cost will come out of our business. We will be at AUD 150 this quarter. And the next quarters, we're focusing on being at AUD 140 a tonne. So that is our focus. And certainly, that's what we're trying to operate under. I hope. Did we miss any questions?
I'm just wondering whether Staffan can throw you straight into the fire on your first AGM and ask you for comment on your own outlook on the sector.
Thank you. Obviously, it's a very cyclical commodity. So it's very difficult to predict the short term.
On the longer term, our view is we would definitely be in the mid $200s is our view. A lot of analysts are saying $225-$250 is probably a target. We think that's on the conservative side on the longer term. But can it stay down for another six months and nine months? For sure, it can. Do we think it will come back? Yes. Otherwise, we wouldn't invest and try to support the market. You can do individual changes. They are on the margins compared to the overall pricing, for sure. You can't really back the major trend. But we're bullish on the overall for the longer term, for sure. It's very few new operations coming on.
Do you have long-term contracts or short-term contracts that people just apply?
I'll pick that up. So we announced a couple of quarters ago. So we set up this financial year, this past financial year. So we work in Japanese financial years, so from April to March. So we have existing contracts largely contracted up for all of our metallurgical coal, which expire in March, which we set for a year at that point in time last year. And we're focusing on trying to do that again for the next Japanese financial year. So we look at doing a long-term contract, i.e., 12 months on that basis. We are not fixed price. So none of our contracts have a fixed price in them. We are subject to the index and how the indices move. And then on the thermal coal, nothing is contracted. We deal with thermal coal as and when we require them. I hope that answers your question. Yeah.
I just want to remember there is an advantage in having some longer-term contracts so that you have a secure future at a certain price for the coal so that you can make some plans for going forward.
Yeah. Look, I think there are options of trying to do certainly commodity hedging to try and lock in some prices, so what we focus on, we earn our dollars in the U.S. and then obviously spend in Australia, but our debt is naturally hedged to the U.S. dollar, so the debt repayments are U.S. dollar-based, so from our side, we manage our costs accordingly, and we think that what we've got at the moment is actually working pretty well from a commodity pricing perspective. We take some countermeasures on FX.
So FX is one to watch, and we don't overextend ourselves there, particularly. We've seen with Donald Trump coming in. Macquarie was forecasting 62-64 cents. And if Harris got in, they were going the other way, even up to 70 cents. So we protect ourselves as much as we can. And we're fortunate from our side that Trump did get in because it means a stronger US dollar. And weakness of the AUD, well, it's good for our business, right? So yeah, we're not complaining with that. Are there any other questions?
One of our major costs is royalties. I know we all hate the extreme levels that we're foisted with. And my understanding is the Liberal National Party have promised not to change them and probably can't afford to. I'm just wondering whether there's any discussions or any hope or any light at the end of the tunnel.
Yeah, it's a very good question. Look, I think the new government's just getting their feet under the desk, in fairness. They haven't filled their staff, and they're just sort of running around trying to get the infrastructure in place. Certainly, under the old regime, there was no consultation, as we well know. There was no - we just read about it in the press. What I'm confident in under this regime is that there will be more of a consultative sort of partnership relationship between the major productive industries that drive our prosperity and our earnings and our jobs and the government, which is a good thing.
I think to kind of break down what's been said publicly about royalties, my take on it is that the LNP said they won't change it for the first four years, or if you actually kind of look closely, it's really around the forward estimates. There's about AUD 20 billion in those forward estimates over four years, AUD 5 billion a year, so they do, as you rightly say, need to do some budget repair work now, and so, unfortunately, it's very hard to put that genie back in the bottle in the short term, but I remain confident in the long term and the medium term that we'll come up with a solution, so yes, there are thoughts and some early engagement, and Coal Australia, QRC are in there playing a role.
I think we have a good chance of getting a decent outcome because we can't have, at the moment, there's really no new mines starting up. We started. Pembroke started. It's very hard to start a new mine under these regimes, the royalty regimes. So I think that'll drive part of it is that they recognize that to get new investment, they need to make some changes. And they do want to encourage investment. I'm very confident they want to encourage investment in coal mining. And that wasn't clear under the last government, to be honest. They sort of had a bet each way on that. So yes, that's a roundabout answer to your question. But I think, yes, there is a much stronger chance of getting a sustainable royalty regime that doesn't drive the sector into the dust under the LNP. And I think there's a budget coming up.
I think we'll be in June, so in preparation to that, we'll be having discussions and seeing what can be done. Now, I think within the bounds of budget repair and also election promises, there's no real wiggle room in that, I don't believe, but outside of that, I think we can get a decent outcome.
Chris Breitenberg, Director of Ledotre. Yeah, I'd just like to thank Nick Jorss for his tremendous contribution and passing the baton along, but it's been a difficult time. I guess you've had lots of headwinds, and it's been like the Ukrainian war, etc., that pushed coal prices up to ridiculous levels. And I guess the situation with costs, I can understand that I guess the parties involved, contractors, employees, the government in particular with the royalties, have seen a big cake sitting there, and they've taken a big chunk of it.
That has left you in an awkward position. We've all suffered because of that. From the discussions today, the prospects are looking quite a lot brighter. I'm just wondering, is there any opportunity for some level of compensation from government? Because with companies, they make plans based on certainty. This is extremely uncertain to all of a sudden jack your royalties up to 40% or something. It's just not right. Then to give the money back to all of us, there's electricity rebates. We're supposedly in a position most of the public are, either rightly or wrongly, concerned about global warming. We just encourage people to go and use more electricity at home, put in air conditioners, etc. It just doesn't make any logical sense. That's just the one side. Do you want to take that one first?
Yeah. Okay. So I think, look, timing is everything in this business. And my previous go-around with Neville and Duncan was Stanmore Coal. We got the timing very right. By the time we bought Isaac Plains for $1, and then the market went from $85 to $300 within about six or nine months, and we all looked like heroes. This time, I think less so. As Daryl said, we picked the tail end of that kind of energy crisis, Ukraine price spike, where coke went to $670 and thermal went to $420, and we really missed that. And so probably the difference between where we sit today and most other coal producers sit is that their balance sheets are much stronger because they went through that period. So they might not be making much money.
It's still tough at these prices to make money, but they have the balance sheet. I think, look, I'm not sure about compensation from the government. I mean, look, there is a train of thought, and I know there's a train of thought amongst the legal fraternity that these may be unconstitutional. These royalties may be a tax or an excise. And that's something a few people are pursuing. But I think what we really want to do is sit down, have a sensible chat with the new government, and sort of talk to them about how we can help repair the budget, but retain the industry, have a set of policy settings and tax and regulatory settings that encourage investment and don't drive us out of business. Do you have a follow-up?
Maybe there's something like, I guess, with farmers in years gone by, like if they had bad years, they put the money away for good years. And then there's a tax, yeah, I can't remember what they called it back in that day.
Yeah. Look, absolutely. And I've had chats with LNP about exactly that. This is what we should be doing. The coal industry should be contributing when the price is super high, but we should be getting a break when we're losing money.
Yeah. I totally agree. Just the other question, just on operations. I guess with the closing of Bluff and the Broadmeadow issue with the power line, etc., so to what extent are those costs still hanging over your cost per ton?
Yeah. Thank you for that. I think the Bluff's costs have largely been arrested by now. So we're looking after that.
We gave some guidance previously. We thought Bluff would cost about AUD 2 million a year to maintain and carry maintenance state. We think that's probably overestimated, so we're looking at reducing those costs quite substantially, so potentially halving those or 60% of that. We're busy working on reducing those costs. Broadmeadow East, to be honest, it came up against the power line, but it also gave us an opportunity to focus, so it gave us an opportunity to focus on Ellensfield South to be able to get to steady state. Coal in the ground at Broadmeadow East is still there. It hasn't moved, so it's still a focus of ours. We still want to go back to it. That's why we refer to it as being paused rather than put on carrying maintenance. I mean, we're currently augering there at the moment, so we're doing some auger coal.
And we still want to move that power line. But we're looking for an economic solution there. I mean, I think the discussions that we've had have been pretty challenging. And I think the environment and the regulatory regime with the energy that goes across that line and the holder of that line is difficult, right? So we've had independent quotes, which is substantially lower. So we're having those discussions at all levels within government to try and have a sensible conversation that we can move that line out of that way at low risk. So yeah, I think so to answer your question, not a lot of costs coming through. There were potentially some trading costs from a cash perspective coming through, but all those costs are largely being accounted for at the back end of the June financial year.
Sorry. Can I just add to that? Because I think that is one real change with the government changing is that we are expecting and anticipating much better engagement on things like Powerlink, for instance, which has been very difficult to deal with. And so as Daryl said, they've given us a quote. I think we've put it out publicly. It costs us AUD 20 million to move a power line. We can do it for six. So getting a sensible outcome out of those things is critical. Because if it's AUD 6 million, a lot easier to move and take the coal out. That's much easier to do. There's a couple of ones that fit under that category within Powerlink.
But just generally on approvals, on duplication, on all the kind of the meat and potatoes of getting mines into production, getting a Lenton mine granted, getting Isaac Plains going, all that sort of stuff, we think are going to, from everything we're hearing and seeing from the new government, that's going to speed up markedly. There'll be duplication getting out of the way. So that's really encouraging that they're going down that path.
Okay. Just another great question just on the environment point with Teviot Creek. Does the creek actually stay there, or is there a possibility for diverting? Or that's just an area that you don't mind over that area? That's between the Plumtree and Ellensfield South. Yeah. Thank you. Yeah.
So maybe we can look at that creek. So while we're there, there's been two creek diversions at Burton before. So it's possible.
It's not something that cannot be done. It is possible. So as I say, we're busy working on that, trying to see all the alternatives and options available to potentially divert that creek. There's no guarantees, obviously, but our team's busy with all the options and the implications of diverting that creek. Unfortunately, as we acquired the asset, we weren't able to do that within time by the time we got there from a mining perspective. But certainly, that opportunity is not lost. We can still potentially come back and mine the creek. And there's definitely coal. And then you can see the Vermont seam actually sits over there. And you'll see the Vermont seam over there. So it carries on through.
Okay. Thank you.
Any other questions? Maybe rules. Yeah. Duncan, any pre-prepared questions of note? Came through on the line before the meeting.
Now that funding has been secured, will management use all the surplus cash flow to pay down the outstanding debt?
Okay. I think we answered that one in the slides. The answer's yes. We'll do everything we can to pay down debt where we can. But obviously, we need to maintain liquidity within the business. So excess cash will be applied against debt.
Okay. Are there any further questions? If not, I think, Duncan, that's the end of the meeting. We'll call to a close. And I appreciate everybody's time. Just had a ping online. Sorry. Yeah. Look, thank you all for your attendance. I appreciate your efforts and your support. And yeah, looking forward to bigger and better things for this company. So thanks all. Please stick around for a cup of tea.