Suddenly things (especially prices) are looking up for NSW and Queensland coal miner New Hope Corporation (which is controlled by the Washington H Soul Pattinson investment group).
When it released its interim results in April, the company was guardedly optimistic about a recovery, especially in the price of thermal coal which is under pressure from the rise of renewables and China’s ban on buying Australian coal.
Though the company had seen a 48% jump in thermal coal prices from October to the end of January, its after tax result was a $55 million loss, it reported a 34% drop in revenue and a 23% drop in coal sales for the half.
But in its third quarter activities report on Tuesday, the company was far more confident pointing out a 78% jump in the price of thermal coal from NSW since last September.
In late January the price was around $90 a tonne (from $50 a tonne in the depths of the pandemic last April-May. Now New Hope said the price had more than doubled to over $120 a tonne, China ban and all.
(Trade data for April, released yesterday confirmed the rebound by pointing to an increase in coal exports “driven by thermal coal, up $203 million, with an increase of $116 million to India. Australian coal exports to India have been steadily rising since mid-2020, following a substantial reduction in Chinese demand for Australian coal,” according to the Australian Bureau of Statistics).
New Hope said in Tuesday’s update that it was establishing new markets for its coal.
Its major mine is the 80% owned Bengalla operation in the upper Hunter Valley where run of mine production eased 2.8% to 2.3 million tonnes in the quarter because of the heavy rain in March.
But sales were up 5% to 2.58 million tonnes with an average price of $105.41 a tonne from $87.42 a tonne in the January quarter and $78.80 a tonne for the six months to January.
New Hope’s New Acland coal mine in Queensland produced 5.4% less coal than the prior quarter.
The company expects final coal to be extracted in late October or early November this year as the future of the site remains up in the air due to the stalled approval of its stage 3 expansion.
The shares ended steady at $1.34.
