But the future of the company’s board and the fate of the 23 contractors retrenched from Sunnyside remain in doubt as its prepares for an annual meeting next week in which major shareholder Nathan Tinkler is expected to ask for the removal of five directors.
This morning chairman Mark Vaile responded to press speculation about the future of managing director Tony Haggarty, saying that “the board holds Mr Haggarty in the highest regard” while admitting succession planning is in place.
“Mr Haggarty has not advised the board of a particular date for relinquishing his executive responsibilities and continues to lead Whitehaven's operations, development projects and assessment of various attractive strategic opportunities,” Vaile said.
The long approval time for the Maules Creek project –which lies in the NSW Gunnedah Basin – and problems with the longwall at Whitehaven’s Narrabri project, are believed to have led Tinkler to push for board and management changes at the company.
"It is clearly difficult to have a high degree of confidence in predicting future coal prices for financial year 2013, particularly at this stage of the financial year," Whitehaven said in a statement today.
Whitehaven’s run of mine coal production during the September quarter was 1.908 million tonnes on a 100% basis, up 42% on the previous corresponding period.
Coal sales for the September quarter were 1.84Mt, down 1% on the previous corresponding period.
The approval process for Maules Creek began in August 2010 and has included extensive community and stakeholder consultation along with specialist expert assessments of environmental impacts, according to Whitehaven.
The project – which is planned to produce more than 10 million tonnes per annum of mostly high-quality, semi-soft coking coal – is now awaiting approval from the Federal Department of Sustainability, Environment, Water Population and Communities.
“The Maules Creek project is one of the best coal development projects in the world with a large reserve of high-quality coal, a low stripping ratio of 6.4:1, relatively low capital development costs and very competitive operating costs, estimated to be $62.50 per tonne FOB [excluding royalties],” Haggarty said.
“Notwithstanding, the stringent environmental conditions which have been placed on the project and the difficult coal market at present, this is a world-class project and Whitehaven will be seeking to bring it into production as soon as possible.”
Greens MP Jeremy Buckingham condemned the PAC approval of Maules Creek, saying the mine would be an “act of environmental vandalism and represented a failure of the O’Farrell Government’s Strategic Regional Land Use Policy”
“This mine will destroy the Leard Forest, an area previously classified as Tier One biodiversity land in the draft Strategic Regional Land Use Plan for the North West,” he said.
Whitehaven said it would redeploy resources from Sunnyside to its more profitable Werris Creek mine.
The approximately 0.4 million tonnes per year of run of mine coal production lost from Sunnyside is planned to be offset by increasing production at Werris Creek, from the current planned rate of 2Mtpa up to the approved rate of 2.5Mtpa.
This would be achieved by the introduction of a larger excavator and trucks at Werris Creek to boost overburden capacity, the company said in a statement.
Werris Creek is Whitehaven’s lowest-cost mine and produces superior quality and value to Sunnyside, according to Haggarty.
“While Whitehaven is a relatively low-cost operator, we are not immune from the continuing falls in global coal prices,” he said said.
“Our objective is always to keep our operations running safely, sustainably and profitably. While the majority of our operations are performing acceptably in the current climate, in the case of Sunnyside, it has become apparent that at current coal prices production it is not viable.”
Approximately 14 Whitehaven employees will be offered positions in other operations and management has informed the CFMEU about the decision, the company said.