Coal prices boost Whitehaven despite disruptions

coal prices

Whitehaven Coal has seen coal prices soar for its operations, increasing by 144 per cent in the past year.

Coal pricing averaged $211 per tonne (t) for the December quarter of 2021, compared with $86/t in the December quarter of 2020.

“Coal prices continued at attractive levels through the December quarter and remain well supported for the near future given strong underlying demand and persistent supply-side disruptions,” Whitehaven Coal chief executive officer and managing director Paul Flynn said.

“Cash generation has been strong, with the business expected to be net cash in the March quarter.”

In 2022, demand for seaborne thermal coal remains strong and ongoing constraints from both Australia and Indonesia have seen thermal prices soar once again.

The December quarter saw wet weather cause flooding in the Hunter Valley and Gunnedah Basin which impacted mining operations, including cutting access to some mines.

This is reflected in full-year coal throughput from the Port of Newcastle of 157 million tonnes (Mt), down 2Mt from 2020 and 9Mt from 2019.

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

The 2022 financial year guidance has been updated to account for the effects of significant rainfall associated with La Niña and COVID-related labour shortages.

“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.”

Both thermal and metallurgical coal prices are expected to be well supported over 2022.

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