On the face of it Whitehaven Coal (WHC) had a very good 2012-13 financial year. Production and sales jumped sharply, and the company moved closer to getting its huge Maules Creek mine to the starting block.
But that could be stalled for a while longer after legal action post June 30 from environmentalists to try and stop the $700 million plus project in North Western NSW.
But the company reiterated in yesterday’s June quarter and financial year production report that it still expects to be producing coal from Maules Creek next year, as planned.
But while that confidence is heartening, the company will continue to battle the impact of weak world prices on its finances in the current financial year.
Demand from Asia, the major market for coking and thermal coal, remains weak and prices are under pressure, especially in the Chinese market, although the weaker Australian dollar is providing some relief.
Whitehaven produced 8.2 million tonnes of coal in the 2012-13 financial year, up 67% on 2011-12, while total coal sales for the year rose 34% to 7.4 million tonnes.
WHC 1Y – Increased production, lower coal prices
The benchmark price for Whitehaven’s metallurgical coal fell to $US113.50 per tonne in the June quarter, and is expected to fall to about $US102 per tonne in the three months to September, Whitehaven said yesterday.
Thermal coal prices have also dropped, hitting $US77 a tonne in July, from $US93 a tonne in December.
"Whitehaven’s realised value for its thermal coal in the second half has been affected adversely by the continued weakness in the market price, adverse foreign exchange rates, and lower energy of Narrabri thermal coal," directors said yesterday.
"With the recommencement of longwall production at Narrabri, and the commissioning of the bypass crusher over the coming weeks, thermal coal energy is expected to improve in the next quarter as described in the operations report.
"Significant progress has been made in resolving the issues with off-take contracts, with only one contract remaining to be resolved."
Whitehaven also said it expects to make its first sales from the Maules Creek project in the December quarter of next year, a more specific target than its previous forecast of first sales in the second half of 2014.
The company is continuing to work on construction of the mine, despite proceedings being launched in the federal court by an environmental group.
"Pending any findings by the court, the company is relying on the minister’s approval to proceed with construction," Whitehaven said.
"In the event of an adverse finding against the minister, one remedy could entail the minister re-approving the project."
Whitehaven shares dropped 3c to $2.10.
