Whitehaven Coal faced a mixed performance in the December 2023 quarter, marked by a 6% decline in run-of-mine (ROM) production and a decrease in the average coal price. The Australian coal miner’s ROM production for the quarter reached five million tonnes (Mt), reflecting a 300,000t reduction from the previous quarter, coupled with an average coal price of $216/t, 4% lower than in September.
Despite these challenges, Whitehaven achieved a 21% increase in total equity sales, reaching 3.7Mt. Managed coal sales also saw a 20% uptick.
Notably, Maules Creek and the Gunnedah open-cut mines delivered strong operational performances, while Narrabri faced setbacks due to geological challenges and equipment reliability issues in the current longwall. Whitehaven’s Managing Director and CEO, Paul Flynn, expressed confidence in the company’s overall ROM production and sales guidance for the 2023–24 financial year (FY24), noting that the production and sales mix is expected to reflect stronger performances at the open cut mines and lower volumes from Narrabri.
In a strategic move, Whitehaven acquired BHP’s Daunia and Blackwater metallurgical coal mines during the December quarter for up to $US4.1 billion. Flynn highlighted the achievement of an average realised price of $216/t for the quarter, with thermal coal sales realising a 5% premium to the gC NEWC index of $US135/t.
Flynn also pointed out the resilience of high CV thermal coal prices in the range of $US120–150/t and the strengthening of HCC metallurgical coal prices to approximately $US300–350/t. These developments are expected to bring benefits for Whitehaven following the completion of the acquisition.
Whitehaven’s financial position remains robust, with a net cash position of $1.5 billion as of December 31. This includes a $833 million tax payment for FY23 in December and a $US100 million cash deposit made for the Daunia and Blackwater mines acquisition.
The completion of the acquisition is anticipated in early April 2024. With a $US1.1 billion five-year credit facility, $1.6 billion in cash, and ongoing cash generation, Whitehaven is well-positioned for future growth.
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