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Thank you for standing by, and welcome to the Coronado Global Resources Q1 Investor Call. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I would now hand the conference over to Mr. Andrew Mooney, VP, Investor Relations and Communications. Please go ahead.
Thank you, everyone, for joining Coronado's first quarter investor call for 2024. Today, we released our quarterly report to the ASX and SEC, outlining our production and sales statistics as well as other information related to safety, coal markets and financials. A more detailed outline of our financial position and results will be released to the market on the 7th of May with our Form 10-Q earnings release. Today, I'm joined by our Managing Director and CEO, Douglas Thompson; and our Group CFO, Gerhard Ziems. Within our report, you'll see our notice regarding forward-looking statements and reconciliations of non-U.S. GAAP financial measures. We encourage all listeners to review these statements in conjunction with our other filings with the ASX and SEC. We also remind everyone Coronado quotes all numbers in U.S. dollars and metric tonnes unless otherwise stated. With that, over to you, Douglas.
Thanks very much, Andrew, and thank you, everybody, for joining. I'm pleased to report that the Coronado team continues to deliver according to our plan. In the first quarter, our safety results are ahead of plan. Our investments in productivity improvements at Buchanan and Curragh are on track in delivering and coding to our plan. All our cost reduction actions identified in our plan for the first quarter have been actioned. Our sustainability plan is on track, and our growth projects on plan and budget. We have successfully pivoted our mine plans at Curragh South and Curragh North mines early in the quarter to mitigate the full year impact of the heavy rain in late December, which was followed by 2 cyclones in the quarter. We did this by pulling forward annual maintenance in our 2 processing plants at Curragh. We took advantage of having 2 processing plants by running one while we maintain the other in February and March. Thereby, the full year's result impact is reduced, as we have now completed maintenance that was planned in later quarters, and we're starting to see the benefit in April. We'll gain time and productivity in the quarters to come. We've also been working on our strategic plans, and we delivered several strategic milestones in the first quarter. To list a few, we reported previously that we commenced mining operations in our newly developed southern section of Buchanan in this quarter. Our development sections are ahead of plan in the Northern District and once complete, this will offer more mining flexibility and productivity in H2 of this year as we balance operations between the North and South. And once the second set of skips are operational in H1 2025, we will draw full benefit from the productivity gains, and increased volumes we can host the surface. In the quarter, we also commenced high-well mining at our Logan operations, which provide incremental tonnes. And we successfully demobilized 4 contractor fleets from the Curragh complex in late March according to our plans again. And our dragline productivities are improving. At Curragh in accordance with our plans following the investment in 2023 made on strike length improvements and pit geometries. During the quarter, we also continued to invest simultaneously in organic growth and emission reduction projects without being to raise additional capital. Our organic growth investments are unlocking substantial value found within our 100% owned 838 million tonne reserve base, a substantial reserve base that we're tapping into. The investments into our newly named Mammoth Underground and our Buchanan expansion projects at multiple substantially lower than the recent market opportunities and demonstrates the cheapest and best use of our capital, which we expect will create significant value for our shareholders over time. Before I elaborate on our operational results, I'll turn our focus to safety and give you an overview. I'm pleased to advise that the reportable rates in Australia and the U.S. remain at well below relevant industry rates. Looking at Australia, the 12-month rating average rate being the total recordable incident frequency rate as of the 30th March was 1.63 compared to 3.18% same time last year, which is a 49% improvement year-on-year, and actually is the lowest safety rate since May 2018 in Australia. In the U.S., the 12-month rating average of the total recordable incident rate as of the 30th of March was 2.12 compared to 2.83 the prior year. That's a 25% improvement year-on-year. So, looking at the group level, the total recordable instant rate is $1.01 compared to 1.36 this time last year, that's a 26% improvement year-on-year. In addition to these strong results, I'd like to take the opportunity to congratulate our Logan complex for achieving several safety rewards for their performance in 2023. All of Logan surface and Underground operations achieved the West Virginia Joseph A. Home Safety Association Award, and 3 of these operations also received the Mountaineer Garden Award. Turning to operations. Coronado completed the March quarter with group ROM coal production of 6 million tonnes and saleable production of 3.4 million tonnes, and sales volumes of 3.6%. In Australia, ROM coal production from the core complex was 2.7 million tonnes and saleable production was 2.2 million tonnes. Coal production rates were lower during the quarter, primarily due to the impact of heavy rain in late December, which was followed by the 2 cyclones as reported in the quarter. To mitigate the impact of the significant weather in late December, which reduced the mine start of the year planned ROM coal inventories, we brought forward the maintenance of our processing plants. As a result, both CHPP of Curragh have completed their annual shutdowns with no further maintenance planned for the rest of the year. Curragh is also exceeding planning total waste movements and drill meters during the quarter. This will set pits up for enhanced coal availability in subsequent quarters. At the end of March, the mine has successfully completed historic pre-strip. And this was a deficit in the past. And as a result, we've managed to demobilize 4 contractor fleets from site. The removal of these fleets, followed by the pit rectifications on the one current plan reflects a significant milestone for the mine. A consolidation of contractor has also been undertaken with a reduction on resources proportionate to the fleets reduced and consequently, the required maintenance thereof. As a result of these actions from April, Curragh complex expects to see a material reduction in the cost per tonne. In addition, as a return on investment, Curragh's dragline fleets have achieved planned productivity improvements with ratios of waste moved by draglines versus truck and excavator increasing to 44%, up from 37%. This is according to our plan and demonstrates that the investment in the plan is working. In addition, in late March, we introduced a new PC7000 excavator, which will further increase productivity rates of our excavator fleets. All these actions are in accordance with our plan to drive productivities and improve margins in a sustained manner. Curragh finished the quarter well with strong performance with elevated stockpiles and had a strong momentum that has continued into April. The mine is on track to deliver 1 million tonnes of salable production in this month. Turning to our U.S. operations. ROM production for the month of March quarter was 3.3 million tonnes and sellable production was 1.2 million tonnes, a strong quarter ROM production, which was 20% higher than the December quarter. This was achieved as the Buchanan Mine commenced mining in the newly developed Southern District. The close proximity of the horse and the underground bunker to the Southern District has contributed to the higher ROM delivery in the quarter and is something that we can expect in future reporting cycles as we mine these new panels. During the quarter, we conducted maintenance on the host, which was planned to be done later in the year. We will gain from this works for the balance of the year. Our skip counts are trending to the best rates in the last 2 years, and our conveyor system downtime is at record lows. Saleable production levels mirrored December quarter during the temporary lowering of yields out of the Southern District. This is according to our plan. And we expected that the yields will increase in the June quarter to more normalized levels. Production from Logan complex was on plan. In the quarter, as I mentioned earlier, Highwall mining commenced in late March, and we also reentered the Pelton underground mine in April. Looking ahead to the June quarter, April performance from Coronado's operations has been strong, with improved coal mining and lower cost per tonne being realized at Curragh, and we're realizing improving yields at the Buchanan in April, and solid incremental tonnes have been achieved at Logan. So as a result, we reaffirm our previously noted 2024 market guidance. I'll now hand over to Gerhard, who will talk through our finance and market outlook.
Thank you, Douglas, and good day from back in West Virginia today. Our March quarter group revenue was USD 668 million, down 2% compared to the December quarter, mainly due to lower sales volumes quarter-on-quarter. 95.1% of all coal sales revenues in Q1 came from metallurgical coal sales. The group realized met coal price for the quarter was $24 per tonne, which is a mixture of FOB, FOR, and U.S. domestic pricing contracts, which is reflecting a 3% increase over the prior December quarter. At quarter cash flows for the group were negatively impacted by the additional payment in March to the Queensland revenue office of USD 52 million, which equates to AUD 79 million relating to Coronado's acquisition of the Curragh Mine in March 2018. This payment, which reflected in our full year results release was made prior to the company officially lodging its appeal to the Supreme Court of Queensland on 11 March this year against the QRO's assessment of the stamp duty payable. And the balance to the cash outflows related to working capital as we missed a few customer payments worth more than USD 46 million that were officially due, just on Good Friday, the last day, almost in March, and we received that money in the first week of April. So, there's a significant impact from working capital. If you added both up, then it's about $100 million of cash, the same duty and the late customer payments. So as of 31st March '24, we had a net debt position, therefore, of 18 million. So, if you add back the 46 million that I just mentioned, it would be 28 million net cash, and then that's consisting of a closing cash balance of 225 million, 242 million senior secured notes outstanding. And we maintain available liquidity of USD 375 million comprised of available cash, and then the short-term deposits and ongoing borrowings under the ABL. In relation to our costs, the Q1 average mining cost per tonne sold for the group were $125.6 per tonne. The higher mining cost per tonne due to the impact on production from the wet weather events early in the quarter and the temporary lower yields being realized at Buchanan as Douglas highlighted. However, as Douglas just mentioned before, we are expecting to see a meaningful reduction in cost per tonne in the second quarter following the mob of 4 contractor fleets at Curragh and following the completion of the pre-strip deficit words and higher yields at Buchanan, and improved productivities being realized across Coronado. On coal markets, both the Australian and U.S. met coal index prices decreased in the first quarter. The benchmark or the premium lower hard coking coal FOB, Phoenix price was $300 per tonne, down 8% compared to the December quarter of USD 333 per tonne. In the benchmark average index price was $256 per tonne, down 3% compared to the prior December quarter average as 264 per tonne. The benchmark declined from about $307 per tonne in early March to $245 at the end of the month, with increased supply coming from Finland and also combine them with weaker spot demand from China and India. And that's, of course, impacting prices. The seaborne supply of Australian met coal increased during March from drier conditions following the heavy rainfall experienced across the born Basin earlier in the quarter. March shipments from the Queensland industry increased 20% relative to January and February average weekly shipments. The stronger supplier position along with ongoing reduced global steel demand, ultimately, has led to additional spot market availability and the drop in prices and in margin also in are. The global economic environment and weak short-term steel demand outlook continues to put pressure on steel margins with steelmakers continuing to manage lower demand through lower hot metal production and reducing demand for raw materials. However, I anticipate that the June quarter prices will stabilize at current levels as India imports will increase on the back of strong demand for pre-monsoon restocking that usually happens in May and June. And the latest data from the SGX forward curve, the latest data from today is projecting the benchmark index to be USD 277 per tonne throughout this calendar year. These pricing projections continue to signal. We are really in an environment of higher pricing for longer, and the pricing environment is expected to be well above the long-term average of $198 per tonne. And before I hand back to Douglas to discuss the status of our growth projects. I would like to mention that we recently welcomed representatives from one of our largest customers, JFE Steel Corporation to celebrate 40 years of continuous supply of high-quality, reliable met coal from our Curragh complex to the Japanese steel industry. And as we commemorate this milestone, we affirm our commitment to deliver great products to all of our customers on 5 continents, and continue to look forward to shaping a good future together. I hand back now to Douglas. Douglas?
Thanks, Gerhard. Great relationship and long-standing and a good future together. So now I'll turn my attention to look over the horizon to some of our strategic growth projects that I mentioned earlier. So, in the first quarter, our business continued to invest simultaneously into organic growth projects, our mission reduction projects demonstrating significant progress in both without the need to raise additional debt or equity. And as I mentioned earlier, the investments into Mammoth Underground and in our Buchanan, expansion projects at multiple substantially lower than recent market opportunities, which we expect will create significant value for our shareholders into the future. Turning to the Underground project, which is now officially named the Mammoth Underground remains on budget and on schedule, and this is subject to environmental approvals, as we've mentioned previously. Power readiness is on track for completion and handover to the underground teams in the June quarter. During the March quarter, progress continued on the critical path requirements of the environmental approvals. Mammoth Underground mine offers Curragh complex several strategic improvement opportunities, mainly, it will give us diversified coal production. The underground mine will not be exposed to wet weather production interruptions. So, we'll derisk production continuity. Reduced cost per tonne, our cost projections for an underground is forecasted to be in the second quarter, which will reduce the overall cost per tonne for the complex. And then quality products, which are in demand, Mammoth Mine has substantial high-quality met coal, a resource base of 441 million ROM tonnes and a coal quality expected to mirror the existing Curragh North opencut. And it offers us increased production capacity. Once fully operational, the project is expected to produce 1.5 million to 2 million tonnes of saddle production in the first phase. This is subject to the environmental approvals, and our forecast is to have first coal produced for Mammoth mine in the month of December of 2024. Organic growth plans in the U.S. also remain on budget and on target. Good progress has been made in the construction of our second set of skips in this quarter. As at the 31st of March, 95% of the shaft excavation works and concrete lining works are complete, with the balance expected to be completed by mid-June. And the construction of the new surface raw coal storage areas to increase the mine storage capacity is progressing to plan, with excavation works to be complete in the June quarter. And the surface infrastructure and production hoists are also progressing to plan. Full completion of both projects is on track to be complete in early 2025. Ultimately, the hoisting capacity and storage area will reduce the risk of bottlenecks, allowing the Northern District and the Southern District longwalls to grow at higher capacity and improved productivities. Turning to our emission reduction projects. We continue to make progress on our gas pilot project at Curragh. This project is targeting to capture and beneficial use of the open cut waste mine coal gas from our operations with primary downstream cases being power generation and uses a diesel substituting our fleets. I can report that production from Aropo-1 and 2 wells commenced in March with dewatering leading to gas flows from both wells. As we continue to dewater the wells, gas flow is steadily increasing and mirroring our modeling for this reserve. We plan to monitor gas flows in the near-term and build upon our monitoring of the reservoir, understand each well's performance and resultantly the optimal use of this waste gas going forward. And in the June quarter, we'll also be running a new trial on an updated conversion of the gas truck to test the visibility of converting more trucks to this dual fuel solution. Turning to the U.S. Given the proven success of the ventilation air methane unit at the Buchanan Vent Shaft #16 and reducing our emissions, the business commenced the installation of a second VAM unit at Vent Shaft #18. Coronado considers itself to be an industry leader in the implementation of VAM emissions reduction technology, and we continue to share our learnings with the industry. We made substantial progress on construction works during the quarter with construction now complete on the second VAM unit. The VAM unit is now undergoing testing procedures and is scheduled to be online and operational in May, which is actually slightly ahead of our schedule. The establishment of the second VAM unit is expected to further reduce our mission as a business and forms a key building block to our aspirations of a 30% emissions reduction by 2030. I'll now hand over to the operator to take your questions.
Thank you. [Operator Instructions]. Your first question comes from Paul Young with Goldman Sachs.
I hope you both well. First question is on the realized pricing achieved at Curragh in the quarter. I think it was 73% or so of the hard coke and coal price, the FOB price in the period. Even if it was an improvement over the last quarter, but I still thought it should have been a little bit higher. Was that due to mix not improving or a mix issue between semisoft PCI and hard coking? Or is it just a timing around shipments end? Do you expect some sort of benefit to sort of be achieved or flow through in the June quarter?
Yes. Paul, hi. Gerhard here. Look, I think, first of all, it's profoundly better than December quarter, simply also because prices fell and we benefit from the higher prices in the December quarter. That's why it's higher. It's in line with what we have seen in the past, to be quite honest, 70%, 73%. The reason why it might be lower than you expected is we had very low volatilities of PCI, particularly PCI to the benchmark. So that was sitting just above 50%. It's back to above 60%. So, it has improved. And therefore, we expect some positive effects of that flowing through into the following quarter.
Okay. So, does it sound like anything around timing of shipments on high coke and coal?
No. It's predominantly really the PCI relativity that dropped to a low of 50% in this quarter.
Yes, okay. And then maybe on Curragh, and a question for Doug around. Good to see the 4 fleets being taken out of Curragh. Doug, I think 4 of the 16 fleets, truck shovel fleet that is just on a question on the consolidation of the contractors. Can you talk a bit more about this? What are the benefits of consolidating the contract just from terms of the contract structure or any way we should think about the cost benefit there?
Paul, there's a number of things. Firstly, we're trying to execute all of this according to a plan. So, there's a systemic way in which we're working through to address some of the past, and I'm pleased to say that the one Curragh plan has served its purpose. It's now coming to the end with a deficit catch-up where we mobilize additional fleets to catch up deficits. But likewise, in that period with additional maintenance, I think we've spoken through some of the work we've done in the prep plants and the overland conveyor to get the performance of that up. And then likewise, with running these extra fleets. As we take that out, we look at all of our other contracting and support base and reduce costs proportionately. Taking headcount is one of the best ways out of the business to reduce cost because of that second order costs into the business as well. So, we've got a plan that we've been executing to that, and we're constantly measuring our reductions that flow as a result.
Okay. Thanks, Doug. And then maybe just turning to the U.S. and Buchanan, and now you've commenced mining in the Southern District and completed that -- brought forward that scheduled maintenance on the hoist. What sort of benefit do you expect to see on production at Buchanan in the June quarter? Or should I say what run rate should we expect from Buchanan between now and end of the year before the new skips are commissioned?
Paul, I don't want to give guidance before it's appropriate. We'll talk about June at the end of June. But what we're seeing in the month of April is improved performance. We started to see improved over the last 2 years, trending above the performance in the last 2 years on skipping, and then also our conveyor belts. Likewise, out of Buchanan is in this period, we modeled and knew that we'd have a yield reduction, so albeit we've enjoyed good wrong flows. The yield has been down. That yield has now improved through April, and we expect it to continue to improve through the rest of the June quarter. The work that we did in the shaft was primarily driven by a set of ropes that needed to change out. It's routine inspection that we do when we saw a change out was due, it was earlier than what we anticipated. So, we took the opportunity to do other maintenance as well, which we're benefiting from now. And what we're trying to flag is because we've done that maintenance, we win the time back in quarters to come, where the shaft won't go down as per our original schedule, and we'll get the time back. Likewise, at Curragh, because we had low coal flows at the start of the year because of the December extreme wet in that last 1.5 weeks, we just didn't have the wrong stock that we anticipated and faced positions, and then the 2 cyclones. We managed to pivot pretty quickly and do the maintenance in those low coal flows, which means in the second quarter, the June quarter and later, we don't have to do the prep lot maintenance. And once again, you get that time back, but we also enjoy the productivity improvements for the rest of the year that we would only started enjoying later in the year, and we could have seen that in April as well. So, that's how that prevent and maintenance pulling forward will benefit us for the rest of the year.
And the wash plant maintenance at Curragh, what was the duration on that scheduled maintenance for wash plant?
I'd want to come back and give you exact numbers, but we're talking probably 2 weeks. I think, 10 days for the one and just over 2 weeks for the second one, there were 2 both large annual shutdowns.
Your next question comes from Chen Jiang with Bank of America.
Two questions from me, please. Firstly, just a follow-up on your price variation. So, for the PCI discount to the POV hard coking coal, that has improved in the -- I would say, in the recent weeks. I'm just wondering if you can provide any color on that narrowing discount. Is that primarily driven by declining POV hard coking coal price? Or is there anything changed in the Sabine PCI market, such as decreasing supply of Sabine PCI coal or better PCI demand? Any color in the Sabine market appreciated. I have another one after this.
Yes. No, let me respond to that first. Look, in the end, it's because a benchmark, the premium global Australian FOB benchmark came down from the 300s and above 300 down to 245. I think I indicated that in prior quarterly updates, I fear now that these indices have decoupled in a way. The premium lower benchmark was essentially just driven by lower supply in the premium mid-wall segment and high demand out of India for -- in that premium mid-wall segment. So that actually caused this index to be so high, where the PCI product didn't see these dynamics whatsoever. So, PCI at least high prices was sitting at 50% as a benchmark for the premium lower index came down to 245, nearly $100 less than last month or last quarter, the relativity has gone up now to today, 64%. So, essentially, these relativities have decoupled, I would call it, at this point, and that might continue.
Sure. So, you think that the decoupling of PCI and the premium hard cooking coal will continue? So, are you saying the discount will stay at current level?
Well, I mean, no, simply because it's not that dynamic anymore. The PCI price is probably more stable than the premium low-vol benchmark. As the premium low-vol benchmark will most likely go up as India restocks for pre-monsoon restocking reasons, I think that the relativity can drop again to below 60%. The PCI market is not as dynamic as the benchmark for the premium global.
Sure, sure. Great. So, I guess from Curragh price realization perspective, any change in the product mix -- in the product mix that you can achieve higher price from here for the rest of the year?
Yes. Look, we have done some good work. I don't want to be specific color, but in the U.S. and Curragh, we have done some work to mitigate these impacts of lower relativities. But yes, so essentially, what we have seen here in March is a good indicator, 73% for the met coal price is probably pretty good. Mind you, it's also impacted by prices falling in that quarter. There's an element of that in there. But we are pretty confident we can hold the long-term average for met coal realization.
Sure, sure. I have another one for your OpEx reported this quarter. So, by comparing your quota OpEx, it's 27% above the upper end of the FY '24 OpEx guidance. Well, then if I compare your first quarter OpEx with BHP's FY '24 guidance for BMA, it seems like at the upper end of BHP's BMA met coal guidance. Do you think your guidance for FY '24 is too low or too conservative? Well, understand you mentioned a few things to drive the productivity, et cetera, but do you think your cost guidance and basically, what gives you confidence you can achieve the cost guidance?
Yes. No, that's a good question. So, look, I mean, essentially to break that down, what this means is that over the next 3 quarters, we need to see a cost of about $90 per tonne. That's what you are saying. So, at the moment, it's like what was it 125 or something like this. So yes, you have to go back to the volume. So, when we look at the first quarter, we lost a lot of volume because of the rough plant maintenance we work forward, and then the wet weather issues. So, as we have now digested particularly the plant issues, in our own forecast, we are within guidance. So, we don't see any issues there at this point. If there's a major rain event, and we have budgeted and forecasted for rain event. But if there's anything extraordinary outstanding in the fourth quarter, that might impact costs as well as it impacts volume. But at the same time, we are doing a lot of good things that Doug has already highlighted. Pulling out the 4 fleets out of Curragh will yield into cost savings that will ensure that we are within guidance. And to be quite honest, we are looking at further productivity improvements. And these are major, major productivity improvement programs. If you put fleets out of an operation like Curragh, that is massive, three fleets or four fleets. That is a big undertaking, and we continue to look at further productivity improvements. So that will ensure that we are within guidance for the rest of the year, and that's what our internal forecasts are following at the moment.
Look, just building on what you said, and it's exactly right. We've got a plan. We do everything according to plan, and we're diligently executing against it. The team has done everything in the first quarter that we expected within our plan. Some of it was actually delivered a little bit ahead of time in reducing costs and driving productivity, and driving productivity is a true lever. We got to get costs out that are wasteful. We've done that hard work. We will continue to focus on it like the contractor rationalization work, but the productivity gains. The 4 fleets, you can do the math on it, it's substantial. A dragline productivity gain that you're moving 44% of the waste versus 37% with historic, with the dragline is according to our plan, and that also flows into substantial cost reductions. And as Gerhard says, if those play off as we intend, there's further opportunities for us to rationalize our installed capacity at site that will reduce costs again. And then in the U.S., it's been a volume gain that's impacted the quarter from a cost perspective.
Your next question comes from Glyn Lawcock with Barrenjoey.
Maybe just to take that one step further. I mean, we're obviously now all the way through April. Are we actually operating in a free cash flow positive environment now and operating within the guidance that you stated of whatever it was, 90% to 95% to 99% then as we sit here today?
Well, you referred obviously then to April. So, we don't really give outlook on April performance. But yes, when I look at our internal reports, then in forecast, and there's nothing more honest than that, we operate within guidance.
Okay. So, all the benefits are flowing through. So, as you said, if you can deliver the next 3 quarters at guidance, you'll get -- you'll drag that first quarter cost down and there's nothing you've seen in April to suggest that you aren't achieving that, and your free cash flow positive as well now?
Yes. Yes.
And then just a second question, if I can, just on the stamp duty to Queensland. Is that something you could claw back? Is that something that you can debate with the government? Or is that money spent and we won't see it back?
Absolutely.
I'll hand over to Douglas now, but we obviously -- as I said, that we submitted a claim against the Queensland royalty office and made an appeal to the Supreme Court of Queensland on 11 March. So, when you look at the stamp duty that we paid here in addition to what we paid last year, we are disputing a large chunk of this. So, essentially, we just expected, as we had in our balance sheet provided for, expected about AUD 43 million to pay for the stamp duty. And in total, we paid now about AUD 103 million. So, we expected to pay AUD 43 million and we paid in total 103 million. So, there's a good reason we went into a peer at the Supreme Court of Queensland on 11 March.
And you have to pay it all upfront, including the interest and then you can only appeal. So, we've evaluated it, we've decided that's the prudent approach from a shareholder's perspective.
Yes. No, that makes sense. I mean, even worse than paying half your tax upfront and trying to debate that. But is there a time line, Doug, at all to resolve this? Or it's sort of how long is a piece of string?
Unfortunately, the setting of dates in the Supreme Court is not up to us. We've been given indicative dates that it may all be this year. And then it's how quick it works through the system. So, not entirely in our control, unfortunately.
Your next question comes from George Eadie with UBS.
Question first on Curragh. Could we please quantify the elevated stockpiles you mentioned? How much are we talking in volume? And where is it? Is it in pit uncovered accessible coal? Is it at the ROM or the Tilo or a combination?
We don't give out that information because the problem is if we start and we start reporting date initial that's not helpful for you or us. But what I will indicate is we've got good coal inventories exposed because of the elevated and on planned waste movements and drill and blast in the quarter. So, it's input at hand. We've also got decent run stockpiles and we've got decent product stockpiles, partially because there was a range outage during the month of April, where the rail line did some maintenance. So, there's a decent combination of product in all 3 areas.
Okay. No, that's helpful. And maybe just a second one. You mentioned the driveline fleet is now moving 44% of waste, up from 37%. And maybe just to comment on rehandle assumptions for the dragline system going forward. I guess my question is, if more dirt has been allocated to dragline from pre-strip, it might lower unit cost, but does this risk coal on cover and stress the plan or make the drag on the bottleneck going forward?
We're talking prime in those numbers. So, part of the challenge was pit orientation is striking. We were spending a fair amount of time moving our draglines of prime dig and relocating back into getting on blocks, because the strike length wasn't invested in the past. So late '22 and in '23, we did all the box cuts and then set up the pre-strip to be in balance of the pit geometry we set up for optimal dragline performance. And we started to see that in the last quarter of last year and then this quarter, again, the return on the 4 draglines are performing that optimal configuration. We will continue to drive where we've got geological advantage, to drive the prime percentage up with draglines because that's our primary fleet. We engineer everything around that and then back from that and clearly into a business case rebalance on the productivities. Just holding that point while you've raised it, the PC7000 we've introduced is replacing some of the less productive contractor fleet. It's a bigger piece of equipment than what was deployed. So, we've now got our shovel, PC7000 and 800-tonne bigger doing the upper alluvial material, so we can sprint ahead of production of the draglines in the most productive way and reduce the cost per BCM obviously in the process, in the balance.
Okay. No, that's very helpful. So more prime going to drags, that make sense? Just following up on that, how is rehandled trending over the next 2 to 3 years versus last couple maybe?
Rehandled at the stage in our plan is the same, albeit we see opportunities to improve that at this stage in the model, it's the same and probably the best place to stay before the 2 start doing engineering on the call
Mr. Eadie's line is still open.
Yes, that was all for me. Thanks guys.
There are no further questions at this time. I will now hand back to Mr. Thompson for closing remarks.
Okay. Well, everybody, thank you very much for taking the time. We obviously know it's incredibly busy out in the market at the moment. I'd like to point out that we've been communicating for a while now, we have a plan. We're executing our operations in the U.S. and Australia according to the plan for the near-term, and we're starting to see a return on investments in the past in productivity and performance and taking care of some of the legacy items and put them behind ourselves. And we're investing in a substantially attractive future out of our primary operations in the U.S. and Australia. And that will draw value for all shareholders into the future. And we'll continue to report to you against our plans for the year and now improvements and into the future improvements as well. If you do have any follow-up questions, please don't hesitate to contact our Investor Relations team, in particular, Andrew Mooney. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.