For UG coal mining, whether B&P or longwall, unless you do a...

For UG coal mining, whether B&P or longwall, unless you do a major restructure of the running of the operation the costs are largely fixed and variable costs are a relatively minor proportion of overall. Correlation coefficient is typically >95% and I have probably looked at more than 50 Australian operations. Therefore from a unit cost perspective, unit cost is almost solely driven by production (excluding abnormals e.g. new panel conveyor installation and relocation from one panel to another costs or for a longwall operation excluding the LW move cost).

So based on your comment, the impact is 2 fold (double whammy) - both the "fixed" costs are double and they aren't achieving production targets (potentially many reasons for this including (a) production ramp up and/or targets set too high and (b) machinery availability) and so unit cost is significantly above both Prospectus and target level.