Whitehaven defers final investment decisions into expansion projects

WHITEHAVEN Coal is deferring final capital investment decisions on its expansion projects after posting a 15% plunge in saleable coal production in the March quarter to 4.1 million tonnes.
Whitehaven defers final investment decisions into expansion projects Whitehaven defers final investment decisions into expansion projects Whitehaven defers final investment decisions into expansion projects Whitehaven defers final investment decisions into expansion projects Whitehaven defers final investment decisions into expansion projects

Underground at Whitehaven Coal's Narrabri mine in NSW.

The company cited uncertain market conditions as one of the reasons for the delay. 

"These projects underpin Whitehaven's plans to expand managed run-of-mine production in the next 10 years," the company said in its March quarterly report.

"While coal markets in the March quarter have demonstrated their resilience, volatile financial market conditions cause Whitehaven to continue to be cautious in allocating capital to expansion.

"Whitehaven does not expect to consider making a final investment decision in relation to these projects in 2020. Projects will continue to be the subject of Whitehaven's strict capital allocation framework."

Expenditure incurred on expansion and growth projects by Whitehaven during the March quarter was $6.9 million reflecting engineering studies relating to Narrabri Stage 3 Environmental Impact Statement studies and pre-feasibility design work for the Vickery Extension and Winchester South.

Narrabri Underground Mine Stage 3 Extension project seeks to convert Narrabri's existing Exploration Licence into a Mining Lease and use the existing portals, coal handling and preparation plant, rail loop and associated infrastructure to extract, process and ship 80Mt-100Mt of RoM coal using the longwall mining method.

The Vickery Extension project seeks consent from the NSW government to increase the approved Vickery open cut project to operate at up to 10Mtpa with onsite processing and railing capacity.

The proposed Winchester South open cut metallurgical coal mine, situated in Queensland's Bowen Basin, continues to progress through the Queensland government's major project development process.

Whitehaven said year-to-date sales volumes reflected the eight week Narrabri longwall change out, the impacts to production from staffing shortages and regional dust events at Maules Creek in the December quarter and the impact of rain at the Gunnedah open cuts in the March quarter.

Whitehaven CEO Paul Flynn said the company fully met its manning requirements at Maules Creek during the March quarter and was investing in the skills development to achieve full utilisation of equipment and productivity of its workforce.

"As the largest private sector employer in our part of NSW, we are well aware of our role in supporting local jobs and the economy against the backdrop of the COVID-19," he said.

"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."

Autonomous haulage of overburden has also started at Maules Creek. As planned, a fleet of six Hitachi EH5000 trucks and excavator was in operation in March.

During Q4 FY20 additional labour resources will be trained and deployed to allow for seven day operation of AHS by end of the financial year.

A weighting event at the Narrabri longwall operation resulted in 20 lost days of production in March.

The longwall face has since been recovered and normal production has resumed.