New Hope stays positive on coal demand

New Hope

Image: New Hope Group

New Hope Group executives have epitomised the optimism in Australia’s coal industry, with production at the Bengalla mine in New South Wales underpinning such positivity.

In an address to shareholders at the company’s annual general meeting (AGM), New Hope chairman Robert Millner said the company and industry had staged a remarkable post-COVID recovery.

“During the first half of financial year 2021 (FY21), the impact of the pandemic was ongoing, and the Newcastle coal prices were at a near all-time low of $US50 ($69) per tonne,” Millner said.

“The second half saw a significant turnaround, with prices rebounding strongly, not just to pre-COVID levels, but to levels we had not seen since 2008.”

These levels reached a high of $269 per tonne in early October, before settling around current prices of about $150.

New Hope chief executive officer Reinhold Schmidt said the company was well placed to benefit from its world-renowned resources and high demand for coal.

“Consumption of the high-quality coal we produce is driving demand in our key markets,” Schmidt said.

“As the largest net importer of coal, China continues to have a material impact on the global seaborne trade market.

“Despite Japan continuing to explore alternative energy sources, the domestic recovery and limited availability of alternatives have fuelled higher demand for thermal power generation.”

The company has continued to rely on its Bengalla thermal coal mine in the Hunter Valley of New South Wales, while the New Acland mine moves into care and maintenance ahead of a decision from the Land Court for its expansion or retirement, expected in early 2022.

“Looking ahead, I am very optimistic about the Company’s future,” Schmidt said.

“Bengalla is well placed following major maintenance and upgrades to both the dragline and wash plant.”

Bengalla coal sales increased 5.5 per cent on the previous quarter, taking advantage of the heightened coal prices.

Overall, however, the company produced 928,000 fewer tonnes of coal for the quarter ending October 2021, compared to the July quarter. This was a decrease of 23.4 per cent.

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