Whitehaven extends buyback as hovering coal costs increase coffers

Australian coal miner Whitehaven says it’s primed to pocket a hefty premium for the fossil gas as the worldwide power crunch sends coal costs hovering, however warned that the increase is unlikely to final in the long run.

Costs of thermal coal, used to generate power, have shot to new highs following the beginning of the battle in Ukraine, reaching report ranges of round US$467 a tonne. They have been buying and selling at US$188 a tonne a 12 months in the past.

Whitehaven has publicity to long-term contracts in key Asian markets – its largest prospects are Japan, Korea and Taiwan.Credit score:Fairfax

Whitehaven, which generated $4.9 billion in income final monetary 12 months by coal exports, is one among Australia’s largest unbiased coal producers. Whereas the speedy push to decarbonise superior economies spells the tip of thermal coal, the miner is banking on demand from Asian prospects – Japan, Korea, Taiwan – to stay sturdy.

The $9 billion coal miner’s shares have been on a tear this 12 months, up over 246 per cent. They have been buying and selling at $2.76 in January and closed the session on Wednesday at $9.52.

Whitehaven on Wednesday received shareholder approval to increase its on-market share purchase again, choosing up one other 240 million shares (25 per cent of its issued capital) over the subsequent 12 months. The miner accomplished the buyback of 10 per cent of its issued capital earlier this month.

Whitehaven is riding a wave of near record coal prices.

Whitehaven is using a wave of close to report coal costs.Credit score:Peter Stoop

It informed traders at its annual assembly on Wednesday that the “structural change” of speedy decarbonisation will end in tapering demand for thermal seaborne coal by to 2050. Nonetheless, Whitehaven’s publicity to long-term contracts in key Asian markets ought to present it a buffer.

“We acknowledge the function we play, and might want to play within the coming a long time, together with being one of many few coal producers on the planet that is able to convey on new thermal coal manufacturing by our Vickery growth challenge,” chief government Paul Flynn mentioned

“The youngest fleet of coal-fired energy stations is in Asia, in our yard, and given we’re in an setting of heightened power safety … our prospects are very involved about bodily safety [of supply] not only for right this moment … however the long term,” Flynn mentioned.

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