Australia’s Whitehaven Coal narrowly beat its annual coal production forecast on Thursday, helped by a record output at its Maules Creek mine, and said it expects strong demand and prices in the coming months.
The company was forced cut its full-year output guidance twice in the last four months due to downtime at its Narrabri mine in New South Wales for additional longwall equipment repairs.
On market conditions, Whitehaven said there were no signs of weakening demand for thermal or metallurgical coal despite China’s ban on coal from Australia after the relations between the two nations soured last year.
“Everyone is looking for more coal,” Chief Executive Paul Flynn said in a production call, adding that conditions have “turned quite dramatically” as global economic activity improves after the COVID downturn.
“We are also getting requests to bring cargos forward from our Japanese customers as well, that certainly indicated that the market is a little short and more coal is required.”
Expectation that higher coal prices will benefit the miner over the next year has led to a “buy” rating on Whitehaven by Peter O’Connor, a metals and mining analyst at Shaw and Partners.
The miner reported 2021 run of mine (ROM) coal production of 20.6 million tonnes (Mt), slightly above its forecast of 20.4 Mt, on the back of a record 12.7 Mt output from Maules Creek.
Annual production at Narrabri was 4.1 Mt, in line with its earlier forecast.
Its shares rose 2% to A$2.02 by 0226 GMT in a largely flat broader market.
Source: Reuters (Reporting by Harish Sridharan, Tejaswi Marthi, Shashwat Awasthi in Bengaluru and Melanie Burton in Melbourne; Editing by Krishna Chandra Eluri and Arun Koyyur)