Copper and gold miner Straits Resources Ltd says its coal spin off will achieve record production and sales in its 2008 and 2009 calendar years, underpinned by continued strong demand for thermal coal amid constrained supply.

Straits Resources expects to complete the de-merger of its 47 per cent held subsidiary, coal miner Straits Asia Resources Ltd, by mid October, leaving the parent entity to focus on metals production.

Straits Asia, which is listed on the Singapore Stock Exchange, will dual list on the Australian stock exchange and its interest will be distributed to Straits Resources shareholders.

"The outlook for Straits is very positive," the parent company said.

"The next few months will be dominated by the de-merger of the group and with the formation of the global coal vehicle and diversified metals group."

Straits Resources chief executive Milan Jerkovic said in a statement today that the spin-off "should unlock further value for shareholders".

The dedicated coal vehicle expects to sell at least nine million tonnes (Mt) in the 2008 calendar year and install additional infrastructure to allow production to expand to 19 Mt per annum (Mtpa) with a sales target of 11 Mtpa in 2009.

Straits Resources, which today booked a second half loss, said it would continue to invest in restructuring and expanding its base metal and gold operations until the first quarter of the 2009 calendar year.

It posted a bottom line loss of $6 million for the six months to June 30, reflecting the impact of exploration write-downs, the close out of copper hedges and significant transaction costs.

Those one-offs included a $20.5 million writedown of exploration interests and $16.1 million for the hedge book close-out.

Revenue for the half year was $1.51 billion, down from $1.85 billion for the same time last year, while earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $94.2 million, up from $22.9 million for the prior corresponding period.

Straits Resources did not supply any direct comparables for its latest result, because it is changing its reporting period from a calendar year to a traditional financial year, to bring it into line with its peers.

It instead offered results for the 2007 calendar year, when it made a net loss of $16.1 million.

Straits Resources said it would focus on expanding its Tritton copper mine in New South Wales to over 30,000 tonnes per annum.

The mine produced 18,549 tonnes of copper in concentrates during calendar 2007.

It said it would also focus on commissioning and ramping-up production at its Hillgrove antimony/gold mine in NSW after experiencing lengthy construction delays due to "widely reported industry shortages and manufacturing problems".

"These investments will deliver a significant increase to Tritton's copper production and see the addition of a new revenue stream from the sale of antimony metal and gold from Hillgrove," the company said.

It said its Whim Creek copper mine in Western Australia continued to face challenges, namely the availability and cost of labour, and other services and consumables.

The company expects the mine's leachable ores will be exhausted by early 2009 but it will continue producing copper until mid-to-late 2010 when remaining copper stockpiles will have run out.

The directors did not declare a dividend for the six months to June.

Shares in Straits Resources closed three cents higher at $5.59. – Associated Press