One fossil fuel will keep enjoying elevated commodity prices well into the New Year, a mineral producer said.
Whitehaven Coal expects the value of coal will continue to soar. The company predicts the Queensland and New South Wales floods, as well as the European Commission’s ban on Russian coal trade, will keep coal prices high throughout 2023.
“Weather events in December impacted NSW and Queensland coal basins including Whitehaven. Whitehaven operations [were] not impacted by March and July weather events like other producers but logistics (rail and port) were impacted,” the company said in its latest full financial year results.
“Approximately 112 million tonnes of high-CV coal in seaborne markets is under threat by embargoes and restrictions on Russian coal. Europe and North Asia face a challenge in replacing Russian coal [as] sanctions are likely to divert high-CV Russian coal to markets that do not typically take high volumes of premium coal.”
The proponent suggested high demand for coal, and the energy crisis, is likely to continue for the unforeseeable future.
“It is likely to take several years before additional supply or alternative energy sources are available to rebalance global supply and demand dynamics,” it said.
The remarks came after Whitehaven reported a $2 billion net profit after tax for the 12 months ending on 30 June 2022. Earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 1401.5 per cent to $3.1B compared to fiscal 2021. This increase was fuelled by the average coal price rising 242.1 per cent to $325 a tonne compared to the previous financial year.
The business also reported an 8 per cent improvement in its total recordable injury frequency rate to 5.4.
“Demand for high-quality seaborne thermal coal is expected to remain strong throughout FY23 and high-CV coal prices should continue to be well supported. We expect to deliver higher ROM production and coal sales in FY23 compared with FY22,” CEO and managing director Paul Flynn said in a public statement.
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