TerraCom’s (ASX: TER) Blair Athol coal mine sold its coal for well below what it cost to produce and ship during the March quarter.

The central Queensland operation achieved an average price of A$117.54 a tonne, against free-on-board operating costs of A$148.10 a tonne, excluding royalties.

That left the mine selling coal more than A$30 a tonne below its cash cost, before royalties were even counted.

Blair Athol, one of Queensland’s oldest coal mines, was hit by rainfall and cyclone activity that disrupted mining, rail and port logistics.

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TerraCom said the disruption cut sales and lifted costs, and reflected shipment timing rather than any decline in underlying mine performance or product quality.

Coal sales fell 31 per cent from the previous quarter to 253,000 tonnes, while saleable production dropped 19 per cent to 302,000 tonnes.

The company said costs should moderate as volumes recovered, guiding full-year operating costs to the upper end of an A$105-to-A$115 a tonne range.

It expected higher prices from April and a stronger June quarter of about 550,000 tonnes, fully contracted, keeping full-year sales guidance at 1.6 million tonnes.

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April shipments were forecast at about 229,000 tonnes, reflecting improved logistics availability and the start of a stockpile drawdown.

Thermal coal prices strengthened over the period, with the benchmark Newcastle 6,000-kilocalorie price rising to about US$135 a tonne by March.

TerraCom, which also runs coal operations in South Africa, said customer demand for Blair Athol’s coal remained strong.

The weak quarter came amid upheaval in TerraCom’s leadership.

Managing director Danny McCarthy stepped down after quarter end, with Chris Bourke appointed interim chief executive and Andrew Coles non-executive chairman.

The chief financial officer also resigned, and three directors left the board during the quarter as three others were appointed.

TerraCom completed a fully subscribed A$60 million entitlement offer during the quarter and held A$32.9 million of cash at 31 March.

It declared no dividend, and held a further A$54.4 million in restricted cash for Blair Athol rehabilitation bonding.