More coal on the way

Whitehaven Coal has received conditional federal approval to expand or build mines. Most recently it won approval to raise production at its Tarrawonga mine, and last month Environment Minister Tony Burke gave conditional approval for the Maules Creek mine and the neighbouring Boggabri expansion.

The Tarrawonga expansion is planned to increase output from 2 million tonnes a year to 3 million tonnes a year. Whitehaven holds a 70% stake in Tarrawonga, with the remainder owned by Japanese company Idemitsu.

Whitehaven’s chairman Mark Vaile expects the Maules Creek mine to be working next year. The company says Maules Creek will be “super-competitive” and more than double production to about 25 million tonnes a year once operational.

According to the article, Whitehaven Coal is currently making no money because of poor coal prices. Low coal prices are a key factor weighing on the company’s profitability.

Yes. After the federal government announced tougher new coal mine laws aimed at protecting water quality, Whitehaven’s shares fell by 14 cents, or about 5.5%, to $2.39, reflecting investor concern about regulatory risk.

The article notes that former billionaire Nathan Tinkler holds a large stake in Whitehaven. Whitehaven itself owns 70% of Tarrawonga, with the remainder held by Japanese company Idemitsu, which also controls the neighbouring Boggabri mine. Mark Vaile is named as Whitehaven chairman.

Investors should watch the federal government’s tougher coal mine laws designed to protect water quality and the conditional nature of recent mine approvals. These regulatory factors have already influenced the company’s share price and could affect project timelines and costs.

The article states Whitehaven expects to sell about 9 million tonnes of coal this year. Planned expansions include raising Tarrawonga to 3 million tonnes a year and bringing Maules Creek online to push production toward 25 million tonnes a year when fully operational.