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Booming coal prices boost weather-hit Whitehaven

Whitehaven

Whitehaven Coal capitalised on skyrocketing coal prices in the December quarter as an especially cold Northern Hemisphere winter increased the demand for the resource.

Despite being hit by wet weather and COVID-19 labour constraints, Whitehaven enjoyed an average coal price of $211 per tonne for the quarter, more than double the figure averaged during the 2021 financial year.

Whitehaven produced 3.235 million tonnes (mt) of run-of-mine (ROM) coal in the quarter, a 37 per cent drop from the same quarter of 2020 (5.138 mt).

This came as La Niña weather systems caused heavy rain and local flooding proximate to Whitehaven’s mines in New South Wales.

Road access to the mines and Whitehaven’s Gunnedah coal handling and preparation plant (CHPP) was cut off for two weeks as a result of the wet weather.

According to Whitehaven, flooding is estimated to have caused approximately 600,000-700,000 tonnes of ROM production from its Maules Creek open cut mine in NSW to be deferred, while an estimated 100,000-200,000 tonnes of ROM production was deferred from the company’s Gunnedah open cut mines.

With the COVID-19 spread throughout NSW, the effect of workers self-isolating is estimated to have impacted 200,000 tonnes of Whitehaven production in the December quarter.

Whitehaven managing director and chief executive officer Paul Flynn said his company couldn’t evade the weather in the December quarter. Despite this, Whitehaven is in a sound position financially.

“Whitehaven has unfortunately not been immune to recent heavy rains that impacted large parts of regional NSW and Queensland as La Niña made its presence felt for the second Australian summer in a row,” he said.

“While we remain very confident about ongoing favourable supply and demand dynamics, there is elevated uncertainty associated with COVID’s impact on workforce availability and resourcing through our supply chains.

“The strong balance sheet and robust market environment is an appropriate backdrop to provide an update on our capital management strategy with our half year results.”

Whitehaven’s was trading at $2.73 at the time of writing with a market capitalisation of $2.82 billion.

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