Australian coal miner hit by climate change chaos
Australian coal miner Whitehaven has blamed heavy rainfall and flooding caused by the La Niña weather event for a sharp cut to its full-year production forecasts.
In a statement to the ASX on Wednesday, the company said relentless rain and localised flooding was hampering production at its Maules Creek and Tarrawonga open-cut mines, with access and haulage roads impacted as dams and rivers continue to spill over in Gunnedah Basin in the north-east of NSW.
The La Nina weather event has disrupted production at the companies open cut mines.Credit:AP
The company said run-of-mine production was lower at all three of if its open cut mines, and it now expected to produce between 19 million and 20.4 million tonnes of coal this financial year, down from a previous range of between 20 million and 22 million.
While it has not experienced any on-site flooding, Whitehaven said it has been forced to transport staff via helicopter to bypass flood-related access issues.
Overall the company’s equity coal sales for the full year are anticipated to drop to between 13.1-14.4 million tonnes. However, the unit cost of coal, excluding royalties, is projected to climb to $95-$102 USD per tonne.
Producers of coal, Australia’s second-largest export, are facing a deeply uncertain long-term outlook as governments around the world sign up to stronger targets to slash their consumption of fossil fuels and curb planet-heating greenhouse gas emissions.
However, as the fallout from Russia’s invasion of Ukraine deepens a global energy shortage, demand and prices are soaring in the short term. High-quality thermal coal at the Port of Newcastle, the benchmark in Asia, has been trading at record average levels of nearly $US400 a tonne, up from an average of $US90 in 2021, putting Whitehaven on track to report record profits.
Whitehaven managing director Paul Flynn said in the company’s September quarterly report that they had been working to counter interruptions and adapt to the extreme weather events.
“We delivered strong operational performance in the September quarter at our Narrabri underground mine, but our open-cut operations were impacted by wet weather and flood related road closures in September,” he said.
“With La Niña forecast to be a feature through the Spring season, we have been working constructively with councils and developing measures to minimise the impacts of weather delays and flood related road closures as much as possible.”
Whitehaven CEO Paul Flynn said operations had been impacted by the wet weather.Credit:AFR
“Whitehaven generated $1.55 billion of cash in the September quarter, and we have a net cash position of $1.93 billion at 30 September.”
The disruptions from La Niña come three weeks after Flynn and Whitehaven chair Mark Vaile fielded questions at the company’s AGM from shareholders about the miner’s ongoing contribution to the climate crisis.
Whitehaven shares were down 6 per cent to $8.83 in early trading.
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