Good morning, everyone, and thank you for joining us for Whitehaven's December 2019 Quarterly Production Report. I hope everyone's had a good break and managed to avoid the smoke and haze, and I hope everyone was safe and sound. I'll run through the quarterly updates as we do, and then let's get to Q&A, and the context, obviously, of this quarter is that we have revised our guidance back on the 5th of December, as everybody knows, so this quarter is essentially a confirmation, if you like, of the views that we've tabled back on the 5th of December, so I'll move through this quickly, and I'm sure there's lots of discussion within the studio about how we've progressed since that time that we've revised our guidance and what the second half is looking like.
Firstly, to the highlights for our sector performance, a TRIFR of 5.72, which certainly has been a decent result. Key for this past quarter, as everybody knows, Narrabri was out of action for most of the quarter, but the longwall change-out has gone well, and we'll talk about that in more detail, and we're back into production. In-pit dumping has started in a modest way at Maules Creek again. That's something we can speak to a little bit later on. The December quarter's production of 3.1 million tonnes of coal production was obviously considerably down with Narrabri out of action for most of the quarter, a 58% down period-on-period. We'll talk about that. The December quarter's tonnage of coal production is similarly down at 44%. The sales were not down to the same degree, obviously.
We've been drawing down on stocks, and that'll be part of our discussion a little bit later, and then the long-running saga, obviously, of this outstanding piece of Narrabri, which is up for grabs. We have concluded that now in our favor, and so you would have seen that we've announced that we've concluded the sale of, or the purchase of the 7.5% from EDF Trading, and we'll talk also about that in a short moment, so onto the body of the report in safety, of course, 5.72 is a good result, but as you know, we always want to continue to push our safety message even harder, and we'll talk a little bit about that just in terms of structural changes we're making to leadership because that does play into our desire to get out of the fire zone.
The TRIFR's good, but we've been in the TRIFR zone for a little while, and we need to continue to reemphasize our push to get lower into our TRIFR curve. As good as those results are, there's more to be done. I'll move to the page just in the totals, and as I said, 3.1 for managed ROM coal production for the quarter, significantly down on the previous corresponding quarter. No doubt the main contributor to that is not just the revision of the guidance, but obviously Narrabri just not being there for an important change-out from our longwall Panel eight to Panel nine. Coal production, as I mentioned, the same number, period-on-period, and then you've got the managed sales of coal produced at 3.5 versus 5, so 30% down.
We have obviously purchased coal, which has been sold during the course of the period, and that goes to obviously the revised guidance that we've given and also our drive to ensure the customers are not experiencing too much a disruption from the lower production, and at the same time managing the exposure to damage and other aspects of our infrastructure arrangements. Coal stocks are down, as you would imagine, having drawn significantly from them. Back in December 2018, we had 3.3, and just for those to recall, June was 3.3 also, actually, we carried these stocks into this year, so we had the benefit of being able to draw it down ourselves. And at the end of September, we had 2 million tonnes on the ground also, so we have drawn those down significantly.
Consequently, the equity totals are there for you in the table below, and then as we have done in the past, we've tallied up both the indices for the period and our realisations against those indices for essentially the three products that we've been selling, being the high-CV thermal, our other thermal, and our metallurgical coal sales. So you can see the various averages for the indices for the period. I'll just call a couple of features out there for you. The first one I'll focus on just momentarily is just the mix. We have had during the quarter a temporary bump in our other thermal, so our lower than high-CV thermal coal, and that really is attributable just to the tail end of longwall panel eight, where we had some out-of-seam dilution of Narrabri.
What's causing the coal quality to elevate in ash during the back end of the production of Longwall Panel eight? And because the overall total of coal sales were lower, that does represent a temporary distortion in terms of proportion that the semi-soft coals represent of the total. And the cascading impact of that, you can see down to the bottom of the page there, which says thermal coal for gC NEWC, that comparison, our overall realizations of price against the gC NEWC index is -2%, and that, as you can see, that's against the trend as it's been quarter- on- quarter, solely because of this out-of-seam dilution effect of narrowed our production again, distorted temporarily, solely because of the lower sales and production in this particular quarter.
As you can see, the semi-soft sales, our realized prices essentially split the difference between the change-out quarter and the average for semi-soft spot sales during the same period. So as I mentioned before, we've obviously drawn down on stocks quite heavily in order to get to a sales total of 4.5 million tonnes, 78% below the period-on-period sales, but again, our sales narrowed obviously through the change-out phase significantly past mid-March. Coal trading has actually added to margin during the course of the period, so that has been a positive contributor, and we'll speak more about that when we get to the half-year results. globalCOAL Newcastle Index averaged $67 for the period, and so that's obviously found what we think is a floor around that price.
It's certainly vacillated between $65 and 67 for some time, and at more recent times, we've seen that move ahead to $74 as we are today. But I think we are a little high, I see, in terms of you've got people lining up already for settlements of the Japanese price in April, and we are seeing some recovery in the hard coking coal pricing as well, which we hope will draw further into the semi-soft market, although we're not seeing too much evidence of that. Again, we've achieved an average of $87 for our coking coal sales during the quarter. So over to Maules Creek.
As I noted before, on the 5th of December, we reported revisions to our guidance there with a couple of key drivers in that message, obviously, struggling with manning to draw into the community and into our workforce the number of people necessary to keep all of our equipment fully manned. We'll talk about that shortly. And then, of course, with this extended period of drought, severe drought, we have experienced significant numbers of stoppages as a result of regional dust events, as we spoke about at the time of that revised guidance. Now, these are events which bring over our site, not produced by us, but bring over our site a level of elevated dust and particulate matter which exceeds the threshold that we're able to operate within. And so that's caused numerous stoppages.
In fact, we've caused some 30 stoppages over two months, leading up to the revision of our guidance that we had back today in continuation of some of this into the second half. Now, that's an unusual thing to say. If you look at the city today talking about these sorts of events when there is actually rain outside our window, but we need rain at our sites, obviously not in the city, in order to be able to minimize the impacts of these regional dust events. But overall, Maules Creek, Maules Creek at 2.2 versus 4 for the previous corresponding period, it's 44% down. But we are making very good progress on the manning of our fleet, so we have a program in place to drive a short-term recovery of manning levels.
As far as our forecast goes for that recovery plan, which is embedded in the revisions to our guidance as we go on the 5th of December, we are exceeding the progress that we had planned in terms of the number of people we are able to put in trucks between now and 30 June. So that is very positive to see. As I mentioned briefly, if the dumping has occurred, and you will see this start to transition the cost profile, but also the haulage profile for overburden over the next couple of years, that is positive to see. We are pushing very hard into that southern domain for those who recall there is that little triangular corner at the southern end of our pit, which is the most significant in-pit dumping opportunity for us in the short term.
We are driving hard into that area to ensure that we can open that up as soon as possible. Implementation of AHS continues to roll ahead as we've planned. There's nothing unusual to report there, but we are looking to the next quarter in order to start the first fleet rolling out in autonomous form. So over to Narrabri now. Narrabri total of tonnes, as you can see, 233 tonnes. There's not a lot of tonnes, obviously, for the quarter. Impact, of course, in that slightly bumpy end to Longwall Panel eight, where we did find an unplanned intrusion, out-of-seam dilution in that tail end of Longwall Panel eight, which causes lower production.
And then, of course, there's the arduous process of bolting up and pulling on mesh as you complete a panel, obviously, which produces less tonnes, and then we swung heavily into the change-out for the period. So the change-out's gone very well, so the chock shielding upgrade has gone well, and as many of you know, we chose to also replace the drift belt at the same time. And we've been able to commission the wall back in at Panel nine, ahead of schedule, so a week ahead of schedule than it had to be. And thus far, things are looking pretty good. The goaf has formed as we've been advancing, maybe a little early, which is also very positive to see. So whilst some risks such as that have now diminished as you commence the new panel.
So we're looking forward to certainly hitting our straps and continuing to ramp up into our forecast production. We have got a big second half, as you can all acknowledge from the numbers that we've tabled, and there's certainly nothing we'll see today that says we won't be able to proceed on that basis. Coal quality has resumed, as you would typically see at the top of our panels at Narrabri. Narrabri Ops, 657,000 tonnes versus 1.1 for the previous corresponding period. This is in accordance with our plan. Both Tarrawonga and Werris Creek had a slower half in the first half. There's no doubt about that. So this quarter was indeed of that. Werris Creek, typically, as you know, when we hit those seams at the bottom of the Werris Creek pit, always has a bigger half.
Tarrawonga, we are in the process of addressing the area of elevated strip ratio in the hill, as for those of you who visited Tarrawonga, will know. So there's a lot more work being moved at the moment in this quarter, which will swing back and reverse and moderate in the second half. But they're both on course with their plan, and of course, the rollout of our new fleet at Tarrawonga will see us producing around the 3 million tonnes annualized run rate at the end of this financial year. From a logistics perspective, there's nothing particularly to make there. Of course, the drought is having a severe effect on other uses of the rail.
So as you all know, we do have a big second half, and we do want to take advantage of surge capacity in the line to be able to rail at the levels that we want to in order to meet our second half targets. And there's nothing that we can see that says we're not going to be able to do that. The water update's importance has been a particularly focus for us for the last 15, 18 months, and during the course of the past 12 months, we've been doing a lot of work in essentially transitioning Maules Creek, the most important piece of that puzzle, away from its dependency on the river, which has been dry since December of 2018.
We're over a year into that now since the river stopped running, transitioning away from dependency on the river to other water sources, which has been quite successful. It does involve this work a heavy interaction with the regulators, as you can imagine, but we've been able to navigate our way through that successfully during the course of the year. And in this last quarter, further approvals have arrived, also in time to allow us to continue to supply Maules Creek with the water it needs necessary for its current level of production. There is more work to be done here, and so this will be an ongoing exercise for it for the next 6-12 months.
We're thankful for the work that looks like it's going to appear over the next four or five days at the mine sites, but we do feel this is necessary work that we need to continue to ensure that we have essentially a waterproofed position for Maules Creek in particular. Now, I will go to this new section in here. This is not a recurring section, but it's just, I thought we'd talk about just how we're going about preparing ourselves for the future. Now, it's not just the existing mines, obviously, and then management of them that we're responsible for, but we obviously have different interests to start coming. So to that end, we have brought about some changes in our management structure. We've drawn out and created two new roles that haven't had this importance and prominence in our management structure in the past.
It's really the function of the company maturing and readying itself for that next stage of growth. Those two new roles have just seemed to be enough for the creation of a role. We do now have an Executive General Manager for People and Culture, and Leigh Martin has joined us and is on the ground. This is her first week, and we're very pleased to have her with us. We have created a role where the search is currently underway for an Executive General Manager of health, safety, and the environment. Again, two roles that were previously under our COO, which we've now pulled out and elevated and we're investing further to ensure our business can manage the growth going forward. That recruitment process is ongoing.
We've returned to Brian Cole, who remains with us in the business and, as Brian's transitioned to a more consulting role and remains responsible for the approval of Maules Creek. We have hired, and in another two weeks' time, Mark Stevens will join our ranks out of our Brisbane office to take responsibility for our project in the red area. Now, this is a change from our previous structure whereby you've got Vickery, Winchester South, and Stage three, and Narrabri, three very large projects that all come under Mark's responsibility, and we'll drive consistency and approach across these three major projects and any other major projects we undertake from time to time until we find its way into his scope. Now, that did cause some change, of course, for the previous COO configuration of that role, and Jamie Frankcombe, as many of you know, has left our business.
We are very fortunate that we've been joined by Quintin Granger in an increased capacity for the EGM Operations who joins us here in the call today, as does Kevin Ball, our CFO, as you know, and of course, Ian McAleese. But Quentin's been doing a great job on the ground, and we expect to have him here with us while the recruitment process for the EGM Operations role is fulfilled. If you want to, if you're curious about the details, the credentials of each of these new additions to our team, you can go to our website, and there's a link there. Onto the Vickery project, which, frustratingly, the government hasn't cocked up its Whole of Government Report yet, and that is annoying for us, although we're told it's very close to hand.
There have been some early indications of that there are no particular issues that they're grappling with. It's just administratively tidying up the report for its publication in the public. But we are expecting that soon, and we're certainly expecting that. And then the consequent IPC hearing to be called, and then the determination we've estimated within or by 30 June, essentially. But there's nothing particular that the Department of Planning is raising with us that's new, different, or concerning from the whole of government report preparation. It's really just a matter of them handing it over. Winchester South has been a flurry of activity during the course of the period, but it's all been about not just optimization of the mine plan, but then also organising the various pieces of the infrastructure puzzle necessary in this new area.
The most important piece of that being, obviously, water and electricity, both of which have important interrelationships with our neighbors around who have been very cooperative, it's hard to say. So there has been good progress made on securing water supply and also looking at a pathway for electricity supply on site. There has been a delay in the publication of the JORC Reserve for Winchester South. We would have liked to have that a little earlier, but we are working closely on. And the central question here is how much of the Fort Cooper Coal Measures do we put into the reserve? If you wanted to publish a reserve based on the existing Rangal Coal Measures, you could have done that already by now. So the light upper Vermont section of our overall coal resources are very well understood.
But the Fort Cooper Coal Measures will certainly look into putting as much of that as we can into the reserve, and that is the final piece of this puzzle necessary to table our reserve. The Narrabri underground Stage three project continues to progress, and there's nothing particularly to bring to your attention from this, other than the fact that you all know it's a life extension of the project, but an important one, which does require a significant investment from a capital perspective that we talked about on our investor day. It is a life extension out to 2045, which would be great for the Narrabri investment. In terms of markets, I think we are into a relatively quiet period of the market. I think let's see what happens with trade tensions now that there appears to be some trade deals having been tabled.
I think, again, Chinese New Year will be interesting also, just to see that get out of the way and see what the Chinese market does when it comes back into full swing. I think we've seen, as we've noted, oil and gas prices change for the better for the sales of LNG. I think it was unsustainably low in the past, so I think that's logical that that has moderated, and let's see what's happened with the April settlement for Japanese thermal coal, but otherwise, we are seeing strong demand, and every coal tonne that we can get out of the ground, we've got to buy it for. As you can notice back there at Maules Creek, despite the overall -2% realizations for our thermal coal product, we have at Maules Creek realized a 17% premium over above the benchmark for our sales at Maules Creek.
So that brings us to the end of that. Other than to note again that we have concluded the sale of the EDF piece of Narrabri. We are, as we noted in this release today, still subject to pre-empts against us from our remaining joint venturers. But our expectation isn't that they're particularly interested in acquiring their respective piece of that 7.5, and our view is that we're likely to end up with the 77.5 total. But for the purposes of helping you assess what the implications that would be, if they were to exercise their pieces, we would have the 75.7, as noted in the release. So with that, we have tabulated the guidance we want to give for you, and we are happy to continue with that guidance. It's been the basis of which we'll run through the second half of the year.
With that, I might hand over to Rachel, the operator, for an opening up for question and answers. Thank you.
Thank you, Paul. Thank you, and welcome to the Q&A session. To ask a question, please press star one on your telephone keypad and wait for your name to be announced. We'll now pause a minute to assemble a question queue. Your first question comes from Kaan Peker from Jefferies. Please go ahead, Kaan. Hi, Kaan. We can't hear you at the moment. You may have muted your phone.
Yeah, I do that all the time. But yeah, sorry about that. Thanks for taking my question. Just quickly, the first one on Winchester South. So just wondering if you could share a little bit more information or if you have further information around coal quality, washability, yield, etc.? And the second one is more around trying to get an understanding of surge capacity on rail. So is there a certain quantum or percentage that you have an understanding of? Thanks.
Thanks, Kaan. Looking for resources, sort of amongst like-hearted seams, you should—I mean, there's plenty of representative mines in that region mining those seams. And the coal quality work that we've done certainly highlights that our presentation of those seams, if you like, on our lead, are consistent with what you're seeing our neighbours produce. So the coal quality is good, and the recovery is consistent with what we're seeing other mines do. Now, those will range from about 75%-80%, say, recovery from the washing of those two seams. But the question here, as I mentioned earlier, and I know lots of people have talked about this, is Winchester South is a very interesting project because the Fort Cooper Coal Measures are only a meter or two below the bottom of our Vermont seams.
And that's really the closest to anybody's minable section that anybody has a presentation of those seams. So it's incumbent upon us to have a good look at this because there's nothing to get at it. Now, the Fort Cooper Coal Measures everybody knows have some very nice coking qualities in them, but everybody knows also that it's a very low-yielding coal measures. And most people don't attack it because there's usually a big gap between their bottom seam that's minable and where their representation of the Fort Cooper is to protect themselves. We're unique in having it only a meter or two below our bottom seam. So we must look at it because it's obviously very cheap to get at it. And even if it is low-yielding, it will add to the reserves of the project.
We're very keen to make sure we take the time to study this properly, and we want to put as much of that into the project as we can. We'll take the time to do that. But they are typically very low-yielding, Kevin. And it's just how much of that do you want to take, given how cheap it is to mine, versus the low-yielding outcome? And what's the benefit of bringing some of those coking properties into those two seams above? That's the puzzle that we're solving currently. Surge capacity on the rail, look, we're not concerned about that because, unfortunately, for the agricultural users of the line, they're not taking up their respective pathways on the line. We're not seeing any blockages at all here.
Our contracted position for the second half is a lot lower, in terms of our fixed contracted position than what we're going to use. But we have surge capacity in those contracts that allow us to take the available path as and when they're there. So we're not concerned that we won't be able to get that capacity in the second half unless there's some dramatic change around the agricultural prospects, which is not going to happen quickly. And so yeah, that part, we don't see a blockage there in the system at all for us. We're just going to produce the tonnes, as you know, is going to be a weighty second half.
Great. Thanks.
Thank you, Kaan. Your next question comes from Paul Young from Goldman Sachs. Please go ahead, Paul.
Yeah, hi, Paul and team. Happy New Year. First question with regards to Maules Creek. Paul, your guidance for the full year, although it's unchanged, it actually implies that the June half will be effectively a record half for that operation, even when you're looking at, I guess, the lower end of the implied run-of-mine guidance range. I'm just curious about the fact that if the labor impact puts you behind an overburden removal during the quarter, just step us through how you actually man that, the operation back up, and actually achieve effectively a record half based on the fact you're actually behind on your stripping. Thanks.
Yeah, thanks, Paul. Yeah, look, there's no doubt that that's a solid second half that we've got to deliver. I mean, you've certainly seen us in the past deliver some pretty big and lumpy outcomes when you hit some of the thicker seams, such as the grain ones we've discussed in the past. I know if you flip back over to the big table that we put at the back of our announcements, the quarter-on-quarter analysis in terms of what the individual mines have done, not necessarily a record, if you like, but it's going to be close there too if you add up those quarters. We have done it in the past, and we'll do it again. The key, as you mentioned, is really the labor initiatives.
When we formulated the guidance, we obviously set out a recruitment pathway in terms of how quickly we could put people on the ground in seats with a decent level of efficiency to be able to operate the trucks and excavators at a rate to get us where we need to go. And generally, we're slightly ahead of that, which is good. So we are seeing a positive impact of new leadership on site, a different approach to recruitment, a refined approach in terms of the people that we're using for the recruitment drive as well. And so that is delivering results at this early stage. So we need to continue on that pathway in order to deliver the tonnes, no doubt about it. But we certainly have run at that rate when you go back and reflect on those previous quarters in the past and can't do it.
So Quentin, is there anything more you wanted to add on the people side of things at Maules Creek?
No. Paul, other than the fact that certainly our revised labor strategy seems to be hitting its strap at the moment. The numbers I've had a look at just in this last week would tend to indicate that January is also going to be a positive month from a labor recruitment perspective. So the way we're going right now, we've got a high level of confidence that we can deliver on H2.
There you go. Maybe just a bit further information for everyone. How many people are you looking to hire? Where are you? How many people have you hired? Where are they coming from? And what sort of rates or salaries or bonus structures are you having to try to better incentivise this new labour to join Maules Creek?
I think in all of our previous conversations, we've mentioned that there's some 50-60 people that we were looking for in order to achieve the totals that we wanted. Look, part of it is it's not all about money, so we don't want to talk about rates and things. It's not all about that. It's about the whole proposition that we represent as a site here at Maules Creek. And so part of that change, and I think the improvement that we're seeing also, has been about the change in leadership and the different cultural setting that that's bringing. And so I think it's not just about rates. I think if we rely solely on rates, that would be a challenge. There's a couple of strings to this. You've obviously got to get people on site in the short term.
But I think the site has drifted away from their investment in the Cleanskin program to bring local people into the mining sector. And because they're looking for essentially the management team we're talking to, obviously, immediate results, which we all are. Don't get me wrong. We all want that. But by the same token, you have to be able to do two things at once: get those people on the ground to deliver an outcome now, but also continue to fill the local complement of our workforce over time. Narrabri has done this very successfully, and as far as our operators go, it's fully manned. And they've done that by investing in local people over time, people who want to be in that area. As we know, Maules Creek was assembled by people from broadly outside the area in the initial phase.
And then in more recent times, the local recruitment process has drifted away. We've reinvigorated that because that has to be the longer-term solution. Yeah.
And I think in the numbers, again, that I'm seeing, it's quite encouraging to see the number of sort of new starters within our business. And of course, we understand that that required an investment in training requirements, and we've been able to beef that up in the short term to get us over this hump in training that will, of course, come about through that strategy. Yeah, I think the other thing that we're doing is we're not ruling out other alternatives. And so we're looking at everything else under the sun in terms of what else can we do to attract people into our operation there. So we're not just restraining ourselves to the cleanskin employment process.
We've been quite successful in the last month and a half in terms of attracting some other people into Maules Creek as a result of that.
There you go. And last question on Maules, just with the update you've given on the water strategy, those measures as bullet points you've outlined in the quarterly, is there any major cost impacts involved? I presume that's in your cost guidance, but can you maybe just quantify that? And also, let's say if it does rain, but Paul, if it doesn't rain, how long can you run Maules Creek? What's your allocation at the moment? Can you run to—I guess the question—when would you actually have to start curtailing production if it doesn't rain?
Yeah, thanks, Paul. And I think that's three questions requires a meeting. Generally, we'd like to just see how the rain's over somebody else in a second, you know. But water costs, we haven't called those out separately. They are in our guidance. There's no doubt that's been factored in already. I think for the half year, I think it will be—we'll go back, and we're not obviously spending our CapEx at the moment in line with what our guidance has been at the beginning of the year. So that's not happening. Iterate's been obviously delayed, and so any CapEx associated with that's been delayed also. But we might just actually refresh our CapEx at the half-year numbers, and we'll call out the amount of money we've spent on water because it is important. It's not particularly material from an optics perspective, but we've bought some properties we mentioned.
We've made some pipelines, as we've mentioned, and so these are things that are not without some cost, so perhaps we'll table that up for everybody as part of the half-year as a review of CapEx. Kevin, maybe. As far as water security goes, look, we've got a reasonable basis at the moment to continue to operate. Our view is not, we're not just trying to buy time here waiting for rain. Our view is that we do need to secure Maules Creek's water resources without rain. Now, that's a big ask, and we've done pretty well thus far, and we continue to work on this. It does mean we do need the right support and responsible administrative processes from the government to be able to achieve this.
Thus far, I have to say they have been responsive to the needs of people in the community, not just us, but everybody else is making applications to put a new bore down or deepen their bore or whatever it is they're doing, and thus far, the government has been responsive to this, but our outlook does entail more regulatory interaction here and more regulatory outcomes that we're dependent upon, so we're fine for water security, Paul, to answer your question, but if there were to be any change there, we will make a statement about that.
Okay. Great. Thanks very much.
Thank you, Paul. Your next question comes from Peter O'Connor from Shaw and Partners. Please go ahead, Peter.
Hi, Paul, and Tim. Happy New Year as well. Two questions, Paul. Firstly, on Maules Creek, you talked last quarter about the ash premium, the dollar value as opposed to the percentage price that it runs at. And you talked about it's quarterly, and it can be adjusted quarterly or yearly. Just wondering where you're at in that repricing cycle. Has Maules stepped down now on a new calendar year, or is it a fiscal year basis, those premiums? So how should we think about that change in the next quarter to ahead?
Yeah. And your second question, Peter?
The commentary about Narrabri, Paul, you used two scary words: out-of-seam dilution. What exactly was that? Was it a floor roll, or was it a major intrusion? Some of the things you'd like to hear on a coal mining call.
Yeah. Look, it was actually, to be honest, I got one personally. It was just a real localized quality impact, Peter. So it wasn't a big thing, and it certainly wasn't something that we blew out. It was quite localized. But unfortunately, it did blow out the quality there just at the back, the stub end, if you like, of the longwall. And that's now passed. Unfortunately, as you know, a lot of the ash here is elevated obviously when you go through these silted areas, as we're cutting a bit of stone. So it wasn't an intrusion as such. It was actually a fault. But it is a localized thing, and it's now passed, so. In terms of the premiums, that is important. We haven't actually changed any or had to change any of our premiums, our fixed price premiums. That 17% that you see realized is actually reflected with those premiums holding.
They are not set on an annual basis- per- se. They are set on a contract-by-contract basis, depending on what the duration of that contract is. Now, yeah, this is obviously a quality product, and we think the attributes associated with it, for which we demand that premium, don't vary just because the underlying price of the ton may vary. And so we're holding onto these premiums as long as we can. In fact, as demand turns, and we've seen a little bit more demand turning in more recent times, that gives you the opportunity to actually continue to move those premiums upwards. So we're not giving any guidance on reduction of those. We think we'll hold those and, in fact, can improve those over time, Peter.
So, just to the benefits on the call for modeling, when you say the duration of contracts stay extendable, are we talking multiple years? And those, should we be using as premiums on ash for an extended period? And maybe looking into those.
Look, so we have different variations. As many customers as we have, we have different terms for the contract. So I mean, you can essentially treat most of those as evergreen anyway. So look, Maules Creek Coal, thankfully, sells itself. There's no problems about selling Maules Creek Coal. And the premiums are a very strong indication of why that's the case.
Thanks, Paul.
Thank you, Peter. Just a reminder, to ask a question, please press star one on your telephone keypad and wait for your name to be announced. Your next question comes from Rahul Anand from Morgan Stanley. Please go ahead, Rahul.
Thanks for the opportunity. Hi, Paul and Team. Happy New Year. I've just got one question, but it's got a few subparts within it for Maules, so I apologize in advance. Vermont Seam, have we hit it now? I mean, you did talk about some modest in-pit dumping. Does that imply that we're there now? I asked the question not particularly with regards to ROM coal production, but also in terms of yield and also met and thermal coal splits going forward. That's the first part of the question. And then the second part of the question is, given current market dynamics, do you expect to continue your skew towards thermal as opposed to met, or once you've hit the right targets, you do expect to go to that 40%-50%? Thanks.
Yeah. Thanks, Rahul. I'll try and answer that before I hand over to Quentin. The Vermont, I don't believe we're into the Vermont now, but it does actually pop up again in our mining sequence later on in the second half. Quentin's not in his head there as to that. It'd be dumping a steep modest. The proportion of dumping that we've been able to access there is relatively modest. We always said it would be in the first half of this year. It's the second half where we're going to access a little bit more of that. Overall, Quentin, I think we're talking about perhaps 15%-20% of volume in the second half.
Yeah. I mean, it's being tight leading up to the end of December.
But as we open up the bottom of pits and remove more of those coal seams down the bottom, we open up more areas, certainly in Box Cut 3 area. So we certainly anticipate to see more of that eventuating in the second half.
And Rahul, your question on market dynamics, you can see the spot price for semisoft as much as we can. And obviously, the semi price and adding on top of that our premiums. Currently, as we sit here today, we're not chasing incremental sales of semisoft, as you would imagine the economics of that aren't compelling. But in terms of long-term strategy, we still believe that more needs to be sent. There's no view that that changes or no variables that we can take into account at the moment which causes us to believe we should change that.
I think with the recent improvement in hard coking pricing, clearly that's recovered quite off its lower reaches in the last two quarters. I think you'll certainly see that drag the semi-soft number up, which will bring it back into contention. But as it currently stands, we're not chasing that incremental spot sale. It's easier and better for us, more productive to sell at $74, say, today, plus our premium on top to the fill.
Okay. So just one follow-up there, Vermont. I mean, is there a delay then in hitting Vermont, or is that per plan? Because I thought it was going to be hit in the third quarter. I may have not kept on top of it. Sorry.
No, Rahul, that's definitely as per plan. The intention is to get to the bottom of the pit as quickly as we possibly can so that we can improve on our in-pit dumping, and to do that, you're chasing coal to the bottom of the pit and not advancing overburden coal mining in advance, so that's very much the plan for the second half of this year.
Okay. That's clear. Thank you very much for that.
Thank you, Rahul. Your next question comes from Kaan Peker from Jefferies. Please go ahead, Kaan.
Hi. Hi, guys. Just a follow-up from me. Just on the water conditions, so we've heard that there's been some sporadic rain around sort of the Tamworth region. I know it's not exactly where Maules is, but there has been some water inflows to some of the key dams like Chaffey and Keepit. Has there been any impact on sort of that Namoi River area? And what does it mean for Maules Creek? Yeah. Could you please maybe give it a little bit of explanation on that ? Cheers.
Yeah. Thanks, Kaan. Yeah. Look, in terms of pop-up on our screen at the moment here in our boardroom, the BOM satellite shows rain falling in that region. Look, we are expecting over the next three or four days some pretty good rains there, which is nice to be able to see that. But it's still early. We're not relying on that as being returned to average rainfall. We've got to be able to shore up Maules Creek's water continuity to be able to run when good rain's happening and when it doesn't. So that's the only responsible thing to do here. Average rain, there's no doubt we'll capture some good flows both into our dams. And then there'll obviously be recharge into the aquifers from which we're drawing currently with our borewater, which is great for all concerned.
When rain falls in the area, everybody feels a little bit better about the world, there's no doubt. Look, I think this will be positive all around. Our view is, despite the immediate relief that is forecast for this next week or so, we're going to continue to be fine under all scenarios.
Okay. Thank you.
Thank you, Kaan. Your next question comes from Lyndon Fagan from JPMorgan. Please go ahead, Lyndon. Hi, Lyndon. We can't hear you at the moment. You may have muted your phone.
Can you hear me now?
Yes.
Yes. Please go ahead.
So thanks for that. Look, the first question, Paul, is just on achieved pricing for thermal. When do you expect that to return to the premiums that we saw for the group overall? Is it a gradual kind of return to that, or is it more related to destocking some of the inventory affected? I guess there's not too much of it at Narrabri by that intrusion.
Yep.
I've got another question after that.
Yeah. We do have an equity limit because we zeroed out the stocks at Narrabri, it's all gone. All that high-ash material, that's gone. So you should expect that to revert to our traditional premium pathway that's in that chart from this new quarter onwards.
Okay. Great. And then the second question was really just about trying to understand the labor issue at Maules a bit better. So there's obviously 50-60 people that left the business. You mentioned it's not all about money, and there's now a different cultural setting coming through. But I guess I'm just trying to understand what the root cause of all of that was and trying to get a view on, I guess, how easy it is to resolve.
Okay. I mean, it's one of those things where it's hard to actually pull or to allocate from an attribution perspective what gave rise to this and what gave rise to that. The reality of it is at Maules Creek, it was, as I mentioned before, a workforce that was assembled initially from outside the region. We got it up and running quickly. There were no jobs available at the time we did that. So we've got all these people who were looking for a job who couldn't find one closer to their home. They came to Boggabri, Gunnedah, and Narrabri, and they stayed for a few years. Those jobs turned up back again in places closer to home. Those from outside the region who didn't put their roots down have migrated back to where they came from.
And essentially, look, my view is that management on site didn't respond quickly enough to that trend. And they were caught a little bit napping, I think, just in terms of the investment in the local hires because they don't give you the immediate impact that you want from a skilled hire recruitment. Everyone would understand why that's the case. You take a taxi driver and you turn them into a truck driver, it takes a few months to get them up the curve so that they become a productive member of the team. And so it takes some time. So I understand at a level as to why they're pursuing the sugar hit of hiring only skilled workers, but that means you're getting them from outside the region only. And at a time when jobs are available closer to home, you're going to be back on that one.
So you just got to balance these particular issues with each other. And I think, look, culturally, I think there was a requirement for some change there. I won't go into the nuances of that. In particular, all I can say is that the new leadership has done a very good job in resetting the culture. I certainly can steer them out there. Quentin, I'm sure you can make your own observations about what's going on there. But it certainly feels a lot better, and people are a lot more enthusiastic about the prospects going forward now that they've seen the change that's been brought about.
Even the change that I've been seeing in the last six weeks at the end of the organization has been quite phenomenal. So it's a breath of fresh air as far as Maules Creek is concerned.
The management team out there are certainly changing direction and steering the ship in a far more better direction, let's put it that way.
Great. Thanks for that.
Thank you, Lyndon. Your next question comes from Sam Webb from Credit Suisse. Please go ahead, Sam.
Okay. Paul and Team, happy New Year. Look, just two quick ones, please, if I can. Just on dust, you just spoke to the 30-odd stoppages before your release earlier in December. Just trying to get a sense of the conditions now. I mean, is that still running at that kind of rate? Are you still seeing stoppages today? Just trying to get a sense of what it's like outside at the moment, and second question, workers' comp, just wondering, a lot of moving parts this half. Would you be prepared to give us a net debt figure at the end of December? Thanks.
Sorry. A what figure? Net debt. Oh. All right. Well, you'll get that shortly, Sam. So we've got results coming out shortly, though. So just hold your horses, and the half-year results will be with you in all their glory. As far as dust stoppages go, look, there's two things. I'm glad you asked that question because I forgot to mention it a little bit earlier. Obviously, the stoppages, which were significant stoppages that we experienced over those couple of months leading up to October, November, our announcement on the 5th. Fortunately, we've been experiencing less stoppages. We budgeted for a bunch in the forecast. And fortunately, to date, at that time, we have been experiencing less regional dust events. Now, on top of that, and the important piece of that, I suppose, is what have we done about that?
We have been in dialogue with the government about what to do in circumstances where this is not in our making, and what are we to do, or what can we do in the event that there are a cloud of dust, and let's assume it's smoke in this instance because Mount Kaputar has had some recurring fires in it, which has been blowing over Maules Creek. What can we do? Now, we have been able to find a path through there that allows us to continue to operate, some of our equipment during these times, so the stoppages that we contemplate as part of the forecast, even when they occur, are less onerous now because of this new arrangement that we've put in place when we've got elevated dust in the region that's not in our making.
So there is some relief there, Sam, through all that, which is good. And the events themselves are not occurring as frequently as what they were. Now, the key driver for that was the fire in Mount Kaputar. Not only was dust blowing from South Australia, in fact, unfortunately, people's stocks are all turning up over our place from South Australia. But the immediate fire in our vicinity was adding to those particular levels, which was sending our online monitoring through the roof. The government has acknowledged that that is not solely a factor which needs to cause us to stop in all circumstances. Of course, there are safety-related considerations. If visibility is low, you need to stop anyway, regardless of who's making the dust. But it's less bad than what we contemplated in the forecast.
Okay. Thanks, Leigh. It's good talk. Thanks, Paul.
Thank you, Sam. We have no further questions at this time. I'll now hand back to Paul for any additional or closing remarks.
Thank you, everyone, for taking the time. It probably took a little bit more time today than we probably planned, but it's been a good quality discussion. If there are any areas which we didn't get to touch on today, then you know where the time is, and we're more than happy to talk about any of these issues further. Thanks very much. Appreciate you all taking the time, and of course, happy New Year to you all.
Thank you, Paul. That concludes the Whitehaven Coal 2019 Quarter Production Call. Thank you once again for joining us today. We may all disconnect.