Demand for higher-quality coal among developing economies in the Asian region, for example, will continue to grow, driven in part by electrification and new policy settings sensitive to the need to reduce carbon emissions and atmospheric pollutants (particulate matter).
This is especially advantageous for Australia as a key global producer of high-CV, low-ash, low-sulphur coal, and for Whitehaven’s business, which is specifically oriented to supplying demand in our region for coal meeting these specifications.
The IEA forecasts demand for highquality coal from Australia to grow disproportionately to world seaborne growth because of its higher quality. Given Gunnedah Basin coal is at the upper end of the national CV range and with a lower ash component, Whitehaven is well-positioned to continue to supply this market.
The Whitehaven spokesman said the NSW mines supplied metallurgical coal in the form of semi-soft coking coal and high volatile matter (high vol) PCI coal.
“These coals are low in impurities, specifically ash, sulphur and phosphorus, and are important components in our customers’ broader coking coal requirements,” he said.
“Our coking coal sales have a significant exposure to India, which is forecast to experience strong growth in coking coal imports over the coming decades.
“Our customers use low-impurity Whitehaven products in their coke blends to offset impurities in the hard coking coals they purchase, which is an important attribute to the ongoing demand for our coking coals.”
The trend of increasing impurities in hard coking coal, specifically sulphur and ash, is expected to continue, positioning Whitehaven’s business well in terms of future demand for our product.
The seaborne coal market is a large, fluid market and a global perspective is required to understand the direction and volatility of forecast coal prices.
Coal has historically been a cyclical commodity, driven by changes in supply, demand and pricing.
There is little evidence to suggest this cyclical nature will change; in fact there is some evidence it will become more volatile as new influences over supply and demand come to the fore.
STEEL THE ONE
Coal is also crucial in the manufacture of steel, an essential material for modern life.
Manufacturing steel delivers the goods and services that societies need – healthcare, telecommunications, improved agricultural practices, better transport networks, clean water and access to reliable and affordable energy.
It is fundamental to a more sustainable world, helping to build lighter, more efficient vehicles, new highly efficient power stations and in the construction of smart electrical grids.
Steel is a critical component in the construction of transport infrastructure and high energy efficiency residential housing and commercial buildings.
Coking coal is an essential element in blast furnace steel production, making up 70pc of global steel production (the remainder is produced from electric arc furnaces using scrap steel and a tiny share through open hearth). World crude steel production was 1.8b tonnes in 2018.
Steel also has a significant role in delivering renewable energy; each wind turbine requires 260t of steel made from 170t of coking coal and 300t of iron ore. And there are many other applications.
Coal is used to make cement, the key ingredient in the production of concrete, an essential building material for society’s infrastructure around the world, second only to water in total volumes consumed annually.
Cement is essential for building houses, bridges, roads, dams, harbours and airports.
Coal is used as an energy source in cement production to melt raw materials - limestone, silica, iron oxide and alumina. Kilns burn coal in the form of powder and consume around 200g of coal to produce one tonne of cement.
Coal is also a key energy fuel in the production of aluminium – a nonferrous metal known for its lightweight properties and widely used in cars, trains and airplanes to reduce the weight of these vehicles and their energy consumption. In fact, new cars in Europe use, on average, 132kg of aluminium per car, with coal accounting for more than 50pc of the energy used to produce aluminium.
Also dependent on coal are energyintensive materials such as steel, cement and lime used to build railroads, tunnels, bridges and roads.
Coal, because of its relative affordability, is the most widely used source of energy in the manufacturing process of these materials.
Mr Flynn said that as the largest private sector employer in its part of NSW, Whitehaven was well aware of its role in supporting local jobs and the economy against the backdrop of the COVID-19.
“While globally and at home we see economic activity rapidly contracting, it is pleasing that demand for coal from customers in our region remains solid,” he said. The health and safety of Whitehaven’s workforce and community is of utmost priority.
While there has not been any cases of COVID-19 recorded among the Whitehaven workforce, the miner continues to plan for a range of scenarios.
“We are managing risks arising from the virus appropriately and proportionately, including adjusting work practices to facilitate social distancing, increasing health screenings, observing appropriate deep cleaning and sanitation practices, and sourcing additional critical products, PPE and health supplies,” Mr Flynn said.
“We are working largely as normal with no material impact on production, and continue to refine measures to keep our people and communities safe and limit the transmission of COVID-19, while maintaining operations, in compliance with the Resources Sector National COVID-19 Health and Safety Protocols.”
KEY MEASURES HAVE INCLUDED: • Banning non-essential travel.
• Implementing work from home practices for employees in nonoperational or non-business critical roles.
• Restricting non-essential access to mine sites.
• Postponing large gatherings such as the company’s Safehaven conference and contractor safety forums.
• Transitioning face-to-face training and inductions to eLearning packages wherever possible.
• Reviewing cleaning and sanitation, and increasing stocks of cleaning and hygiene products.
• Sourcing additional critical products, PPE and health supplies as required.
• Adjusting operations to practice social distancing wherever possible, including by breaking up pre-starts into multiple groups and/or moving them outside where possible, reducing the number of people in vehicles, and implementing roster changes to stagger start time.
• Sharing new information through a range of channels as it becomes available.
• Offering to credit Special Personal (Sick or Carer’s) Leave to cover selfisolation.
Whitehaven Coal CEO Paul Flynn at Maules Creek.