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Why are the shares of Whitehaven Coal (ASX:WHC) trading higher today?  

  • January 14, 2021 02:47 PM AEDT
  • Kunal Sawhney
    CEO Kunal Sawhney
    2226 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Why are the shares of Whitehaven Coal (ASX:WHC) trading higher today?  

Summary

  • Total managed coal sales stood at 4.5Mt for December 2020 quarter, including 3.9Mt of own saleable coal production.
  • Managed saleable coal production increased by 29% in the quarter from the previous corresponding period.
  • The Company continues to advance its three primary development projects.
Gold MTF non-AMP

Australian miner Whitehaven Coal Limited (ASX:WHC) has released its quarterly activities report for December 2020 and provided an update on its operations.

The Company achieved total managed coal sales volume of 4.5Mt, 2% higher than the previous corresponding period. Managed coal sales stood at 3.9Mt, 15% higher than PCP while run-of-mine production shot up by 64% to 5.1 Mt in December 2020 quarter.

 

Whitehaven Managed Totals – Continuing Operations (ASX update, dated 14 January 2021)

 

The realised price of thermal coal from sales for the Company stood at US$62/t. Due to the presence of an increased volume of thermal coal from competitors sold at a fixed price, Whitehaven’s realised coal price was around 8% lower than the average globalCoal Newcastle Index.

The globalCoal Newcastle Index coal prices showed some recovery. From the lows of August to average US$67/t for December quarter, the coal prices ended the year at US$80/t. The price recovery reflects growth in demand in the Asian market.

The sale of metallurgical coal increased from the September 2020 quarter. The Company realised lower spot prices for its coal production due to restriction imposed by the Chinese government on import of coal from Australia.

Important Update: China turns up the heat on trade war, bans Australian coal

Coal Production and Guidance from Individual Mines

 

  1. Maules Creek Open Cut Mine

The saleable coal production from the mine stood at 2.094Mt, 32% up from PCP. The Company, which controls a 75% interest in the project, has provided production guidance in a range of 11.8-12.4 Mt for the financial year 2021.

 

  1. Narrabri Underground Longwall Mine

Whitehaven controls a 77.5% interest in the project. The saleable coal production from the mine stood at 0.908Mt, 9% up from PCP. The production guidance has been lowered for the project to 5.4-6.0 Mt for FY21.

 

  1. Gunnedah Open Cut Mines – Continuing Operations

The saleable coal production was 0.947Mt for December 2020 quarter. The production guidance has been set at 3.8-4.2 Mt for the financial year 2021.

 

  1. Tarrawonga Mine

For the 100% owned mine, the saleable coal production increased by 8% from PCP to 0.466Mt.

 

  1. Werris Creek Mine

The saleable coal production nearly doubled from PCP and reached 0.481Mt. The mine is also fully controlled by Whitehaven.

Image Source - ©Kalkine Group 2020

 

Whitehaven is engaged in the development of three mines, which are at advance stage of their development. They are the Narrabri Stage 3 extension, Winchester South and Vickery extension projects.

Read More: Whitehaven Coal (ASX:WHC) issues exciting update on Winchester South Project

The Company has submitted the Environmental Impact Statement (EIS) for the Narrabri Stage 3 and Winchester South. Whitehaven has also upgraded the Resource Estimate of Winchester South to 1,100 Mt.

Share Price Movement

The excellent quarterly report was well received by the market. The share price of the Company jumped nearly 6% during early hours of trade. The Company traded at A$1.8 on 14 January 2021 (AEDT 1:57 PM).

 

 


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