Whitehaven Coal plans to continue growing its production profile in the Gunnedah Basin in New South Wales as demand for high-quality coal increases.
The company yesterday reported it had produced 22.9Mt of coal and recorded 22.1Mt in sales during the 2018 financial year, results that were in line with and 7 per cent higher than the previous year.
Whitehaven’s performance was driven by a ramp-up in production at the Maules Creek mine, which delivered a 13 per cent increase in output with 10.95Mt.
Production at Maules Creek will continue to grow in the 2019 financial year towards its approved rate of 13Mt/y. Whitehaven also expects to increase production at the Narrabri mine, which delivered 6.3Mt in the 2018 financial year.
Whitehaven also sees growth at Maules Creek and Narrabri beyond the next fiscal campaign. It said there were opportunities to increase production at both mines in the near and medium term, while prospects also exist for life-of-mine extensions.
Managing director Paul Flynn said Whitehaven’s 2018 performance was a compelling and tangible illustration of how it had successfully set about building a portfolio of quality assets and executing against an agreed strategy.
“We are at an exciting stage in the company’s evolution in that we are bringing together quality production assets and a development pipeline offering greater scale and geographic diversity, against a backdrop of coal prices at historic highs and a track record of successful delivery,” Flynn said.
“The strength of our future prospects is reflected in the board’s decision to recommend a final dividend of 14 cents per share and a special dividend of 13 cents per share. This brings the total cash returned to loyal shareholders to $595 million in the space of 12 months.”
Whitehaven remains bullish on the demand for its product as prices for thermal coal have strengthened to six-year highs in recent weeks.
The company reported a 30 per cent increase in profits ($525.6 million) and a 27 per cent increase in sales revenues ($2.26 billion) of the back of improved prices.
It said demand for thermal coal in the seaborne market was being driven by strong economic growth in Asia and the ongoing deployment of coal-fired power stations in the Asian region.
Supply, meanwhile, was being constrained in a number of exporting countries, including South Africa and Australia, Whitehaven added.
“FY19 is shaping up as another strong year for the company with the outlook for coal demand in Asia set to remain strong across both established and emerging markets,” Flynn said.
“For example Japan, Whitehaven’s largest thermal coal customer, has plans to build up to 30 new ultra-super critical power stations as sub-critical generation capacity is retired.”