Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Shareholder Meeting (November 2012)
33 slides from Whitehaven Coal's shareholder meeting presentation, Nov 1, 2012
Slide 1: ASX cover letter
For personal use only 1 November 2012 The Manager, Listing Australian Securities Exchange Company Announcements Office VIA ASX Online Dear Sir, We attach copies of the Chairman’s Address and Managing Director’s Presentation which will be delivered at the Company’s Annual General Meeting being held a
Slide 2: Chairman's Address
For personal use only WHITEHAVEN COAL AGM 2012 – CHAIRMAN’S ADDRESS Good morning ladies and gentlemen and welcome to the Whitehaven coal limited AGM for 2012. My name is Mark Vaile, I am the Chairman of the Whitehaven Board of Directors and will chair today’s meeting. There is a quorum present and I
Slide 3: Achievements
For personal use only Achievements Tony will shortly give the meeting an update on the status of the business. However, I wanted to touch on some of the key achievements for the year and since balance date. The ramp up of our Narrabri mine is progressing well with 512 kt of coal produced in the firs
Slide 4: Sustainability
For personal use only Sustainability We are highly aware that with our ongoing expansion comes the need for unwavering corporate responsibility. First and foremost this responsibility is for the health and safety of our employees. We have invested significantly in our safety resources and processes
Slide 5: Management & succession planning
For personal use only infrastructure and community initiatives as part of our voluntary planning agreements with local councils. Management & succession planning Now turning for a moment to the team we have in place, we are fortunate to have an extremely experienced and professional management team,
Slide 6: Coal price outlook
For personal use only coal prices have fallen substantially over the last six months and, after rallying mildly in July/August, have fallen to new lows over the last few weeks. The benchmark price of Whitehaven’s metallurgical product, Newcastle semi-soft coking coal (SSCC) has fallen from around US
Slide 7: Delivering Growth – AGM 2012
Whitehaven Coal Limited For personal use only Delivering Growth AGM 2012 Sydney, Australia 1 November 2012
Slide 8: Disclaimer
Disclaimer For personal use only 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 projec
Slide 9: Financial highlights - FY 2012
Financial highlights - FY 2012 For personal use only ► Net profit after tax (NPAT) of $62.5 million1 ► Underlying NPAT (excluding Significant Items) of $57.8 million ► Final Dividend of 3.0 cents per share fully franked, record date 17th September, payment date 30th September ► Average cash cost of
Slide 10: Operating highlights - FY 2012
Operating highlights - FY 2012 For personal use only ► Safety and environmental performance very good across Whitehaven's operations, with a range of initiatives put in place to promote continuous improvement ► Overburden removal quantity as planned for the year, but coal production adversely affect
Slide 11: Saleable coal production increase continues
Saleable coal production increase continues For personal use only Saleable Coal Production - Equity Basis 4,500 4,000 3,500 3,000 000 tonnes 2,500 2,000 1,500 1,000 500 0 4 FY 2012 AGM - 1 November, 2012
Slide 12: Business development highlights - FY 2012
Business development highlights - FY 2012 For personal use only ► Completed the merger with Aston Resources and Boardwalk ► Completed the acquisition of Coalworks to further consolidate Whitehaven’s position in the Vickery and Ferndale projects ► Completed the sale of a 10% JV interest in the Maules
Slide 13: Gunnedah Basin has sustainable competitive advantages
Gunnedah Basin has sustainable competitive advantages Whitehaven has consolidated a very strong position For personal use only Large ► Low ash reserves of ► Low sulphur excellent ► Low phosphorus quality coals ► High energy ► Coking properties (Updated JORC statement issued ► Favourable ash & trace
Slide 14: Substantial near-term production growth from Narrabri and Maules Creek
Substantial near-term production growth from Narrabri and Maules Creek, Vickery to follow For personal use only Planned Saleable Produc.on by Mine – 100% Basis 30000 26 25 25000 22 Note: The FY 2014 plan is based on final EPBC 20000 approval for Maules Creek 000's tonnes being received no later than
Slide 15: A major future supplier of semi-soft coking coal and low-ash thermal coals
A major future supplier of semi-soft coking coal and low-ash thermal coals For personal use only Comments Potential saleable production mix (Mt, 100% basis) ► Metallurgical coal can grow to be up to ~60% Metallurgical coal 23% of managed saleable production by FY2017, Metallurgical coal subject to m
Slide 16: Narrabri fully operational, all infrastructure in place
Narrabri fully operational, all infrastructure in place For personal use only ► Gas drainage well ahead of development, residual gas content low, no issues for LW ► CHPP not yet achieving 1,000 tph, Sedgman addressing this ► Roof caving well, including in un-conditioned area ► Caving of roof coal lo
Slide 17: Longwall installed and operating
Longwall installed and operating For personal use only ► Engineering teething problems being resolved – e.g. shearer set-up, picks & hi-set valves ► Main issue to resolve is automation ► Operator skills improving and CAT/Bucyrus supporting until LW reaches design performance 10 FY 2012 AGM - 1 Novem
Slide 18: Production ramping up
Production ramping up For personal use only ► Current 6 Mtpa target based on 65 cutting hours per week ► Industry best practice is ~90 hours per week, stretching to 100 ► Narrabri has UG coal handling capacity and is approved to 8 Mtpa ► Upgrade to Stage 1 thermal coal crushing system underway to gi
Slide 19: NSW Government approval received for Maules Creek
NSW Government approval received for Maules Creek For personal use only ► Maules Creek project registered with NSW Government in August 2010 ► Environmental Assessment completed and lodged in February 2011 ► Aston expected assessment to be completed and approved by end 2011, based on previous operat
Slide 20: Maules Creek one of the best global coal projects
Maules Creek one of the best global coal projects For personal use only ► Economics of Maules Creek are compelling • Competitive capital development costs • Low stripping ratio • High yield (80-90%) of excellent quality SSCC and/or thermal coals • Very competitive cost structure against global compe
Slide 21: Competitive cost structure in global metallurgical coal
Competitive cost structure in global metallurgical coal For personal use only Global seaborne metallurgical coal - C1 cash cost curve1 2012 (US$/FOB Nominal) 180 160 140 RoW 120 C1 Cash Costs (US$/t) Vietnam USA 100 South Africa N T V Russia 80 M Indonesia Canada 60 Australia 40 20 - 0 50 100 150 20
Slide 22: Competitive cost structure in global thermal coal
Competitive cost structure in global thermal coal For personal use only Global seaborne thermal coal - C1 cash cost curve1 2012, Energy adjusted4 (US$/FOB Nominal) 140 120 100 RoW C1 Cash Costs (US$/t) Vietnam - Energy Adjusted 80 N USA M South Africa W Russia 60 Indonesia Colombia Australia 40 20 -
Slide 23: Newcastle port capacity has grown rapidly
Newcastle port capacity has grown rapidly For personal use only - Around 215 Mtpa port capacity by December 2013 - Shipments of 150 Mt forecast for CY 2013 - New/expanded mines of +60 Mtpa not on horizon - Re-allocation of contracted capacity being explored 100 100 40 40 70 32 32 32 30 30 30 30 PWCS
Slide 24: Infrastructure available to support planned growth
Infrastructure available to support planned growth For personal use only Comments Port capacity and export coal sales (Mt, 100% basis)1 Ø Strategic 11% shareholdings in Newcastle Coal Infrastructure Group Ø Medium to longer term capacity gaps to be secured by accessing surplus capacity from other
Slide 25: Rail track capacity to meet Whitehaven's growth
Rail track capacity to meet Whitehaven’s growth New trains being acquired as needed for growth For personal use only ► Whitehaven has entered into a long term track access agreement with ARTC which provides capacity to meet Whitehaven's planned growth ► Further track upgrades have been identified by
Slide 26: Demand for energy and raw materials is driven by population growth
Demand for energy and raw materials is driven by population growth For personal use only World population growth by region ► The International Energy 9000 Agency (IEA) forecasts population to increase from 8000 Other 6.8 to 8.5 billion by 2035 Other OECD 7000 ► The majority of this growth Europe is
Slide 27: Primary energy demand growth met predominantly from fossil fuels
Primary energy demand growth is being met predominantly from fossil fuels, oil, coal and gas For personal use only ► Nuclear power is not acceptable or available to many people. We are reliant on carbon fuels to generate electricity ► Coal is favoured for generating electricity as it is cheaper, eas
Slide 28: Coal use has increased rapidly over the last years
Coal use has increased rapidly over the last 30 years – and this is expected to continue For personal use only ► World population growth & rapid economic development of the worlds largest nations will drive increasing demand for electricity and steel. ► There is no substitute for coal in making stee
Slide 29: Australia is the largest coal exporter
Australia is the the largest coal exporter and has the competitive strengths to remain #1 For personal use only ► Australia has the world’s best reserves of metallurgical coal and large reserves of high quality thermal coal ► Our mining conditions are generally good and our coal deposits are relativ
Slide 30: Supply competition has increased in 2012
Supply competition has increased in 2012 For personal use only ► Australian supply still somewhat constrained by infrastructure and ever-increasing “red tape” and “green tape”, however Newcastle port capacity now in surplus ► Competition in the seaborne thermal coal market has intensified from: ► US
Slide 31: Prices have fallen sharply in 2012 and the short term outlook is uncertain
Prices have fallen sharply in 2012 and the short term outlook is uncertain For personal use only Thermal Coal Price -‐ 2 years Thermal Coal Price -‐ Last 12 months (US$/tonne) (US$/tonne) 146 130 136 120 126 110 116 100 106 90 96 80 86 70 76 10/11 01/12 02/12 03/12 04/12 05/12 06/12 08/12 09/12 11
Slide 32: Whitehaven's response
Whitehaven’s response For personal use only ► Focussed review of operating costs to identify opportunities for reduction ► Optimise deployment of equipment – including replacement of hire equipment ► Productivity improvement and cost reduction opportunities ► Deferment/cancellation of all non-essent
Slide 33: Delivering Growth – AGM 2012
Whitehaven Coal Limited For personal use only Delivering Growth AGM 2012 Sydney, Australia 1 November 2012
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