Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Energy Mines and Money Australia 2018
30 slides from Whitehaven Coal's conference presentation, Jun 20, 2018
Slide 1: Whitehaven Coal Limited: The Outlook for Whitehaven and Coal
WHITEHAVEN COAL LIMITED AUSTRALIA’S LEADING HIGH QUALITY COAL COMPANY THE OUTLOOK FOR WHITEHAVEN AND COAL ENERGY MINES AND MONEY AUSTRALIA - 20 JUNE 2018
Slide 2: Disclosure
DISCLOSURE STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
AGENDA – Whitehaven Outlook – Coal Outlook – Australian Perspective – Appendices 3 // ENERGY MINES AND MONEY CONFERENCE
Slide 4: Whitehaven Outlook
WHITEHAVEN OUTLOOK
Slide 5: Operations
OPERATIONS – Whitehaven is the largest producer of high quality coal (high CV and low ash and sulphur) from the Gunnedah Basin – Recently acquired the Winchester South metallurgical coal project in Queensland’s Bowen Basin 5 // ENERGY MINES AND MONEY CONFERENCE
Slide 6: First Half Results
FIRST HALF RESULTS RECORD HALF YEAR PROFIT, RETURNS TO SHAREHOLDERS AND STRONG CASH FLOW Safety improved with the Record half year net profit of TRIFR declining to 6.19 at 31 $257.2 million up 63% December Equity coal sales of 9.2Mt Record EBITDA of $460.6 including purchased coal million up 42% on
Slide 7: Margins and Costs
MARGINS AND COSTS COST PRESSURES ARE INCREASING H1 H2 H1 H2 – High coal prices and cost containment FY2018 FY2017 FY2017 FY2016 have produced higher margins over the Coal Sales (equity basis, past two years Mt 8.6 7.7 7.8 8.1 excl. purchased coal) – Recent increases in fuel costs, rising Average rev
Slide 8: Whitehaven's Production Profile
WHITEHAVEN’S PRODUCTION PROFILE MORE PRODUCTION GROWTH EXPECTED OVER THE NEXT NINE YEARS Whitehaven Saleable Production Profile (100% basis, Mt) 45.0 – Managed saleable coal 40.0 production is forecast to grow 35.0 strongly from the startup of the 30.0 Vickery project 25.0 – The recent purchase of t
Slide 9: Strong Production Growth
STRONG PRODUCTION GROWTH WHITEHAVEN IS ONE OF THE FEW COAL MINERS WITH A STRONG GROWTH PROFILE Additional Saleable Recent M&A and Projects Timing Coal (Mt) Acquisition of Tarrawonga JV interest (30%) 0.55 Immediate Increased Whitehaven Annual Equity Production 0.55 H2 CY2018 First coal expected in V
Slide 10: Coal Outlook
COAL OUTLOOK
Slide 11: Setting the Scene
SETTING THE SCENE COAL DEMAND TO INCREASE OVER THE NEXT 20 YEARS – According to the IEA and CRU demand for both metallurgical and thermal coal is expected to continue growing to 2040 and 2035 respectively – Demand growth in Asia, Whitehaven’s key markets, is expected to exceed declining demand from
Slide 12: World Coal Demand
WORLD COAL DEMAND ACCORDING TO THE IEA WORLD COAL DEMAND INCREASES BY 247MTCE BY 2040 World Coal Demand (Mtce) 6000 5000 4000 3000 2000 1000 0 2016 2025 2030 2035 2040 North America Other America Europe Africa Middle East Eurasia China India Japan Southeast Asia Others Source: IEA WEO 2017, New Poli
Slide 13: CRU Forecasts
CRU FORECASTS CRU IS MORE OPTIMISTIC ON GROWTH IN COAL DEMAND World Coal Production (Mt) – CRU forecasts in actual Mt of coal 10,000 production and includes lignite, high and 9,000 low CV bituminous and sub bituminous 8,000 coals 7,000 – CRU forecasts coal demand will increase 6,000 5,000 in contras
Slide 14: Commitment to Coal Use
COMMITMENT TO COAL USE A TOTAL OF 24 COUNTRIES HAVE INCLUDED COAL USE IN THEIR NATIONALLY DETERMINED CONTRIBUTIONS – Three of the largest coal users – China, India and Japan will continue to use coal for decades to come as they install new HELE technology – Many other countries in Asia are also comm
Slide 15: Japan's NDC
JAPAN’S NDC WHITEHAVEN’S LARGEST CUSTOMER CONTINUING TO USE COAL FOR ELECTRICITY Japan Electricity Generation 2015 Japan COP21 Target Mix 2030 3% 1% 1% 1% 8% 4% 2% 26% 8% Coal 2% Coal 33% Oil Oil 1% 9% LNG LNG Nuclear Nuclear Hydro Hydro Biomass 3% Biomass Wind Wind 21% Solar Solar 39% 10% Other Oth
Slide 16: Coal Use for Electricity in China
COAL USE FOR ELECTRICITY IN CHINA COAL REMAINS THE LARGEST SOURCE OF ELECTRICITY IN 2040 China Electricity Generation (TWh electricity sent out) – Coal installed capacity of 1,100GW in 11000 2040 (32% of the total) 9000 – Wind and solar capacity reaches 1,331GW in 2040 (40% of the total) 7000 – Sent
Slide 17: Growing South East Asia
GROWING SOUTH EAST ASIA THE GROWTH MARKET FOR AUSTRALIAN COAL MINERS Coal Demand in SE Asia by Sector (Mt, 6,000kcal) 500 – Coal demand is forecast to grow strongly 450 out to 2040 for both power generation 400 and industrial activity 350 300 – Demand grows from 187Mt to 452Mt, an 250 increase of 26
Slide 18: Deployment of HELE in SE Asia
DEPLOYMENT OF HELE IN SE ASIA DEPLOYMENT OF HELE TECHNOLOGY INCREASES DEMAND FOR HIGH QUALITY COAL Installed Capacity by Technology (GW) – Deployment of HELE technology 180 increases from 7GW in 2016 to a 160 forecast 81GW in 2040 as supercritical 140 and ultra-supercritical power stations 120 are i
Slide 19: Australian Thermal Exports
AUSTRALIAN THERMAL EXPORTS LIMITED GROWTH IN THERMAL EXPORTS EXPECTED Australia Thermal Coal Exports (Mt) – Whitehaven has developed the only new large 250 scale mines – Narrabri and Maules Creek, in Australia in recent years 200 – Brownfield expansions from several mines leads 150 to the modest inc
Slide 20: Response to Higher Prices
RESPONSE TO HIGHER PRICES NEW MINE PROJECTS FACE MANY HURDLES – The development and approval process for new mines is lengthening – Exploration and feasibility work can take several years – EIS work takes at least 18 months in Australia – State and Federal Government approvals can take up to 2 years
Slide 21: Australian Perspective
AUSTRALIAN PERSPECTIVE
Slide 22: Finkel Review
FINKEL REVIEW THE REVIEW DEVELOPED FOUR KEY OUTCOMES Increased Security Installing more intermittent generators cannot provide increased security of the system without the use of firming or base load capacity Future Reliability Replacing retiring coal fired generators with intermittent generators do
Slide 23: Current Electricity Prices
CURRENT ELECTRICITY PRICES EACH CLOSURE OF A COAL GENERATOR HAS LEAD TO HIGHER ELECTRICITY PRICES NSW and SA Wholesale Electricity Prices ($/MW) – Queensland is the only State with HELE 250.00 (supercritical) power stations and is consistently the Northern PS Hazelwood PS 200.00 lowest wholesale cos
Slide 24: A Day in the Life of the East Coast
A DAY IN THE LIFE OF THE EAST COAST REPLACING BASELOAD CAPACITY WITH INTERMITTENCY – WE ARE TOLD WILL LOWER ELECTRICITY COSTS 24 //ENERGY MINES AND MONEY CONFERENCE
Slide 25: Pumped Hydro versus HELE
PUMPED HYDRO VERSUS HELE IS PUMPED HYDRO REALLY CHEAPER THAN HELE? – Kerry Schott, Chair of the Energy Security Board recently commented “the cost of running a clean coal plant is much more expensive than running a combination of wind, solar and gas, or, better yet wind, solar and pumped hydro” Snow
Slide 26: Conclusion
CONCLUSION THE OUTLOOK FOR COAL DEMAND AND WHITEHAVEN IS POSITIVE – Reputable forecasters show coal demand growing until 2040 – Asia is becoming the driving force for coal demand growth – Deployment of HELE technology will drive up premiums for high quality coal – Whitehaven is well placed to supply
Slide 27: Thank You
THANK YOU www.whitehavencoal.com.au
Slide 28: Appendices
APPENDICES
Slide 29: Resources
APPENDICES Whitehaven Coal Limited – Coal Resources – August 2017 Measured Indicated Measured + Inferred Competent Report Tenement Resource Resource Indicated Resource Person Date RESOURCES Maules Creek Opencut* CL375 AUTH346 EL8072 (A) 220 (B) 400 (A + B) 620 (C) 30 1 Mar-17 Narrabri North Undergro
Slide 30: Reserves
APPENDICES RESERVES Whitehaven Coal Limited – Coal Reserves – August 2017 Recoverable Reserves Marketable Reserves Competent Report Tenement Proved Probable Total Proved Probable Total Person Date Maules Creek Opencut* CL375 AUTH346 190 310 500 175 265 440 1 Mar-17 Narrabri North Underground** ML160
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