China trade tension a risk to economy: BHP mining boss

Original article by Emmaline Stigwood
The Australian – Page: 13 & 16 : 21-May-21

China’s unofficial ban on coal imports from Australia has forced local producers to find alternative markets for metallurgical coal. BHP Minerals Australia president Edgar Basto notes that this has resulted in the price falling by up to 50 per cent; he says this is unsustainable and action to improve Australia’s relations with China will eventually be needed, given that China is a major market for coal used in steel-making. Basto says that both nations must take action to "rebuild trust".

CORPORATES
BHP GROUP LIMITED – ASX BHP

Emerging Asia’s appetite for coal may be fading

Original article by Elouise Fowler
The Australian Financial Review – Page: 17 : 15-Jan-21

A report from the Global Energy Monitor on future demand for thermal coal in Asia may have implications for one of Australia’s biggest sources of export revenue. The report concludes that developing nations in the region may build just 25 gigawatts of new coal-fired power stations in 2021, compared with the 125GW that was planned five years ago. Australia’s thermal coal exports to developing countries in Asia have increased significantly in recent years, offsetting a decline in demand from traditional buyers in the region as they adopt net zero emission targets.

CORPORATES
GLOBAL ENERGY MONITOR

China coal ban an FTA breach

Original article by Geoff Chambers
The Australian – Page: 1 & 4 : 16-Dec-20

Prime Minister Scott Morrison says the federal government has received no "official information" from China about restrictions on coal imports from Australia. He says that any such move would be in breach of both the free-trade agreement between the two nations and World Trade Organization rules. China’s state-owned media has reported that Australian thermal coal will be blacklisted in favour of coal from countries such as Indonesia, Russia and Mongolia. Morrison contends that a ban on higher-quality Australian coal would increase China’s carbon emissions. He has also emphasised that Japan and India are bigger markets for Australian thermal and coking coal respectively than China.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

80 coal ships in China stand-off

Original article by Perry Williams, Will Glasgow
The Australian – Page: 1 & 4 : 27-Nov-20

Australia’s coal exports to China fell by 96 per cent in the first three weeks of November. Industry sources have indicated that 82 bulk carriers are currently in Chinese waters and awaiting permission to unload 8.8 million tonnes of Australian coal. China’s ban on coal imports from Australia has forced producers to find alternative markets for their coal, often at a discount. Meanwhile, North American coal is now being sold to China at a premium to Australian coal.

CORPORATES

Whitehaven won’t alter dividend policy despite setbacks

Original article by Peter Ker
The Australian Financial Review – Page: 16 : 26-Oct-20

Whitehaven Coal’s lenders recently agreed to relax its debt covenants after the company sought relief due to a severe downturn in coal prices. However, a condition of that relaxation will constrain the company’s ability to pay dividends until its debt levels fall below certain thresholds. Whitehaven had paid out a record final dividend of $298 million in August 2019, and chairman Mark Vaile says he has no regrets about the payment. He says the company may need to be a bit more conservative about capital management in the future, while he notes that the 2019 payout followed two successive years of record profits.

CORPORATES
WHITEHAVEN COAL LIMITED – ASX WHC

New Hope cuts jobs, dividend after loss

Original article by Perry Williams
The Australian – Page: 16 : 23-Sep-20

Coal producer New Hope Corporation has posted a net loss of $156.7m for the year to 31 July, following a $210.4m profit for the previous financial year. The latest result was marred by writedowns totalling $346m, including a $110.7m impairment charge against its New Acland thermal coal mine. New Hope has also retrenched 175 workers at the New Acland mine, whose proposed expansion is subject to a legal challenge from environmentalists. A total of 23 jobs have also been cut at its head office and Brisbane coal terminal, while shareholders will not receive a final dividend.

CORPORATES
NEW HOPE CORPORATION LIMITED – ASX NHC

Cbus silent on coal in new carbon reduction policy

Original article by James Fernyhough
The Australian Financial Review – Page: 18 : 1-Sep-20

Industry superannuation fund Cbus is seeking to reduce the carbon footprint of its investments by 45 per cent by 2030, while aiming for a net zero emissions investment portfolio by 2050. Fellow industry funds HESTA and First State have been explicit about their intention to divest thermal coal assets, but Cbus has declined to follow their example. Cbus has links to the Construction, Forestry, Maritime, Mining & Energy Union, which has members working in the coal industry. Cbus’s chief investment officer Kristian Fok says its decision not to specifically divest coal assets was in part based on insight gained from members working in the coal sector.

CORPORATES
CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, FIRST STATE, CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION OF AUSTRALIA

Price collapse burying 31pc of coal mines

Original article by Peter Ker
The Australian Financial Review – Page: 14 & 16 : 11-May-20

The coronavirus pandemic has resulted in a sharp fall in demand from major thermal coal buyers such as Japan and India. This has in turn seen the price of top quality coal from New South Wales and Queensland falling by 27 per cent and 30 per cent respectively. Rory Simington of Wood Mackenzie estimates that about 31 per cent of Australia’s thermal coal exports are unprofitable at current prices. He adds that a significant proportion of Australia’s coal output is sold via long-term contracts. However, the recent price falls will eventually flow through to future contracts.

CORPORATES
WOOD MACKENZIE

Coal vital to post-virus boost: minister

Original article by Peter Ker
The Australian Financial Review – Page: 10 : 6-May-20

Federal Resources Minister Keith Pitt has stressed the importance of resources projects to the Australian economy as it recovers from the coronavirus pandemic. He has urged banks to continue to support coal projects, as a growing number of lenders move to reduce their exposure to the sector. Pitt has also emphasised the need to address the issue of ‘green lawfare’, which resulted in Adani’s Carmichael coal project being subject to multiple legal challenges.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES, ADANI MINING PTY LTD

Whitehaven puts off Vickery mine decision

Original article by Nick Evans
The Australian – Page: 16 : 17-Apr-20

Whitehaven Coal has advised that its production fell by 15 per cent year-on-year in the March quarter, to 4.1 million tonnes of saleable coal. Whitehaven’s managed coal sales fell 22 per cent to 4.5 million tonnes, and the group now expects its managed coal sales for the full year to be within the range of 17.5-18.5 million tonnes. Whitehaven has also indicated that challenging market conditions means that a final investment decision on its Vickery project will not be made until at least 2021. It had previously expected a decision to be made by the end of June.

CORPORATES
WHITEHAVEN COAL LIMITED – ASX WHC