PRIME PO­SI­TION

The Australian Mining Review - - WHITEHAVEN COAL -

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.

CORO­N­AVIRUS CON­TROL

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.

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