Whitehaven Coal cuts output forecast on weather woes, shares slide

A Whitehaven Coal logo is displayed on the front of a lectern at the company’s annual general meeting in Sydney November 1, 2012. REUTERS/Tim Wimborne/File Photo/File Photo

Jan 21 (Reuters) – Whitehaven Coal Ltd (WHC.AX) on Friday warned of lower annual coal output amid a tight export market plagued by supply chain issues, unfavourable weather conditions, and COVID-19 pandemic-related labour shortages, dragging its shares about 10% lower.

While Australia’s biggest independent coal miner was bullish on demand and prices for thermal and metallurgical coal in 2022, flooding in some parts of the country in November and pandemic-led labour shortages weighed on its output expectations.

Aiding the supply tightness further, Indonesia — the world’s top thermal coal exporter — banned coal exports earlier this month to fend off blackouts due to low supplies to local power plants. read more

The ban forced coal buyers in the global market to accept inferior quality product for the upcoming quarter, while some tenders attracted zero bidders, the company said, adding that this was a “strong indication that supply is very tight, and incremental supply is almost non-existent.”

Large parts of Queensland and New South Wales witnessed floods, cutting off Whitehaven’s access to key sites, with its CEO Paul Flynn saying its woes were further heightened due to the pandemic’s impact on workforce availability.

Whitehaven on Friday trimmed its fiscal 2022 managed run-of-mine coal production outlook to between 19 million tonnes (mt) and 20.5 Mt, as it expected flooding to have delayed about 600 kilo tonnes (kt) to 700 kt of run-of-mine production at its flagship Maules Creek operation.

The company’s managed saleable coal production for the December quarter was 3 million tonnes (mt), compared with 3.9 mt a year ago.

Its shares pummelled over 10% by 2345 GMT, tracking its worst day in over two months, while the broader market traded over 1% lower.

Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath and Uttaresh.V

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