Gunnedah Basin coal miner Whitehaven Coal (WHC) has posted an operating loss of $87.3 million for the 2020-21 financial year.
- Whitehaven received less money per tonne of coal in the 2020-21 financial year
- It’s put the loss down to the high Australian dollar and the low coal price
- The company is optimistic demand for coal will remain stable until about 2040
The result is down from a $30 million profit in the 2020 financial year and a more than $560m profit in the 2019 financial year.
WHC’s annual financial report revealed the average price the company received for its coal fell by $9 per tonne in the last year.
It has put the decrease down to the high value of the Australian dollar in the past year and the low price of coal in late 2020, which has since recovered.
The company will not pay a shareholder dividend.
“The financials we’ve just released reflect a difficult year,” managing director Paul Flynn said.
Geological issues hampered coal production at the Narrabri Underground mine, while production at the Maules Creek mine rebounded after difficulties in the previous year.
The company has also written down the value of its assets by more than $450m after tax.
It said the complications at Narrabri led to a reduction in the coal reserves, reduced the mine’s value by $384m.
“We’ve reconfigured the mine plan, which gives rise to the change in the reserves,” Mr Flynn said.
The financial report referred to estimates from the International Energy Agency (IEA) that said demand for coal in Asian economies would remain consistent.
“Coal demand in Whitehaven’s key export market, Asia, will remain stable until at least 2040,” it said.
But the IEA has also warned that no new fossil fuel projects should be approved if the world is to limit global warming to 1.5 degrees Celsius.
Mr Flynn said there had not been any immediate reactions from customers in response to that warning.
The results come ahead of an decision expected next week from federal Environment Minister Sussan Ley on whether to approve the company’s Vickery Extension Project near Gunnedah.
It was the subject of a legal challenge in which the Federal Court ruled the Minister had a duty to consider the potential harm to young people from climate change when approving fossil fuel projects.