Whitehaven Coal has reported a net profit of $7.8 million for its first half of the financial year, with some of its change in fortune due to the high quality coal produced at Maules Creek.
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Whitehaven announced its financial result today for the six months to December 31, 2015.
The company’s result for a year ago was a $12.4 million net loss, excluding significant items.
Whitehaven Coal managing director and chief executive officer Paul Flynn said the result was achieved “in the face of difficult market conditions”.
“The results are particularly pleasing because they have been achieved at a challenging time for the industry, meeting all our commitments we have made to the market,” Mr Flynn said.
“Whitehaven’s high quality coal – which produces more energy and fewer emissions per tonne than almost all competing coals – is being well received in our Asian markets where there is strong and growing demand for cleaner coal.
“Customer feedback on the coal we are producing at Maules Creek is exceptionally positive.”
Among operating highlights listed for Whitehaven was a calendar year production record of 8.3 million tonnes (Mt) ROM (run-of-mine) coal for 2015, and Maules Creek proceeding ahead of schedule.
Maules Creek was producing 8.5 million tonnes per annum by December.
“Capital expenditure for Maules Creek at the end of December 2015 was $701 million and largely complete, with a further $15 million to be spent over the next three years on permanent workshop and administration facilities,” Whitehaven’s “operating highlights” stated.
The mine is expected to ramp up production to 13Mtpa ROM coal in the next two to three years.
Whitehaven’s outlook stated both Narrabri and Maules Creek could go beyond their expected operation.
“Narrabri has a current life of more than 20 years, while Maules Creek has a life in excess of 30 years,” the directors’ report by chairman Mark Vaile and Mr Flynn stated.
“Both mines have exciting prospects for significant life-of-mine extensions.
“These mines form the platform which underpins the future success of Whitehaven and the cash margins that these mines generate will reay debt and fund future growth of the company.”
By December 2015, 333 people were employed at Maules Creek, with 77 per cent of them living locally.
Whitehaven has stated it will not start its new Vickery project at Gunnedah until Maules Creek is fully ramped up to 13Mtpa.
The environmental impact statement for the 10Mtpa Vickery Mine is expected to be finished in June this year.
The coal quality is listed as “similar to Maules Creek”.
Whitehaven also operates the Werris Creek, Tarrawonga and Rocglen mines, as well as the Gunnedah Coal Handling and Processing Plant.
Whitehaven noted costs had been “successfully lowered” at all three of its open-cut mines.
The directors’ report stated strong growth in Asian demand combined with cutbacks from key exporting countries would provide the basis for coal price recovery in 2017.
“Whitehaven remains positive about the medium and long-term outlook for coal, particularly the outlook for the high quality coal we produce,” Mr Flynn said.
“Our coal is highly sought after by customers and countries that have an appreciation for the critical role high quality coal does play in creating an economically competitive, low emissions future.”
Maules Creek Mine officially opened in September last year.
