Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Sydney Mining Club (December 2016)
30 slides from Whitehaven Coal's conference presentation, Dec 1, 2016
Slide 1: Whitehaven Coal Limited – Sydney Mining Club
Whitehaven Coal Limited SYDNEY MINING CLUB Australia’s Leading High-Quality Coal Company 1 DECEMBER 2016
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 – About Whitehaven Coal – World and Asian Coal Demand Growth – How Whitehaven Benefits – Outlook – Appendices 3 // SYDNEY MINING CLUB 2016
Slide 4: Whitehaven as a Business
Whitehaven as a Business AUSTRALIAN LISTED COAL MINER PRODUCING PREMIUM COALS FROM THE GUNNEDAH BASIN IN NEW SOUTH WALES − Whitehaven Coal is the largest independent coal miner in ASX Code: WHC – 1,026 million shares on issue Australia, producing and selling more than 20 Mtpa – Market Cap $A2.8 bill
Slide 5: Whitehaven's Operations
Whitehaven’s Operations THE LARGEST PRODUCER IN THE GUNNEDAH BASIN Developing and operating mines since 1999 Current Operations – Maules Creek (75%) Tier One Mine – Narrabri (70%) Tier One Mine – Tarrawonga (70%) – Werris Creek (100%) – Rocglen (100%) – Gunnedah CHPP (100%) Development Assets – Vick
Slide 6: Coal Sales and Production
Coal Sales and Production RECORD YEAR IN FY2016 FOR BOTH MANAGED SALES AND SALEABLE COAL PRODUCTION Whitehaven Managed Sales and Production – Managed sales and saleable (000's t) production have increased by a factor 25,000 of 4 times over four years and reached 20Mt in FY2016 20,000 – Equity sales
Slide 7: Cash Costs and Margins
Cash Costs and Margins WHITEHAVEN HAS SUCCESSFULLY REDUCED COSTS IN EACH OF THE PAST FOUR YEARS Whitehaven's Cash Costs and Margins ($/t) – Cash costs have fallen consistently and are 80 now placed in the first quartile for thermal 70 mines 60 – Margins have increased progressively, more than offset
Slide 8: Tier 1 Mines – Maules Creek and Narrabri
Tier 1 Mines – Maules Creek and Narrabri 1ST QUARTILE MINES PRODUCING HIGH QUALITY COAL Maules Creek – Ownership: 75% Whitehaven – Open cut mine using ultra-class mining equipment – Reserves of 510Mt providing a ~ 40 year mine life – FY2017 production expected to be in the range of 9.5Mt and 9.8Mt R
Slide 9: Whitehaven's Growth to Continue
Whitehaven’s Growth to Continue MAULES CREEK RAMP UP AND WIDER FACE AT NARRABRI CONTRIBUTING TO GROWTH Saleable Coal Production (100%, Mt) – Ramping up of production from Maules 25.00 Creek continues and the wider face at Narrabri contributes from H2 FY2017 20.00 – Increased production of higher qua
Slide 10: World & Asian Coal Demand Growth
World & Asian Coal Demand Growth
Slide 11: World Electrical Capacity
World Electrical Capacity IEA WORLD ENERGY OUTLOOK 2016 FORECASTS GROWING COAL GENERATING CAPACITY GROWTH – Under the New Policies Scenario the IEA World Electrical Capacity (GW) expects world electricity demand to grow at 12000 2% annually to 2040 increasing by 66% 10000 over the period – Coal-fire
Slide 12: Asian Electrical Capacity
Asian Electrical Capacity THE REGION IN THE WORLD OFFERING THE STRONGEST DEMAND GROWTH FOR COAL Non-OECD Asia Electrical Capacity (GW) – Total generating capacity grows from 6000 2000GW in 2014 to over 5000GW in 2040 according to the IEA 5000 – Coal’s share of the generating capacity 4000 declines f
Slide 13: Australia's & Whitehaven's Markets
Australia’s & Whitehaven’s Markets COAL DEMAND IN ASIA EX CHINA AND INDIA SET TO GROW STRONGLY Asian Coal Demand ex China and India (Mtce) – Growth in coal consumption is concentrated 900 in Asia and developing countries driven by 800 strong growth in incomes and energy needs 700 – Coal demand in SE
Slide 14: Coal - Pathway to Lower Carbon Emissions
Coal - Pathway to Lower Carbon Emissions UTILISING HIGH QUALITY COALS IN MORE EFFICIENT HELE POWER STATIONS LOWERS EMISSIONS Old and New Generating Technology (kg CO2/kWh) – If the world converted from lignite and 1600 black coal fired subcritical power 1400 stations to black coal fired USC plants t
Slide 15: Deployment of HELE Gathers Momentum
Deployment of HELE Gathers Momentum OVER THE NEXT 25 YEARS A TOTAL OF 730GW OF HELE PLANTS WILL BE BUILT Deployment of Efficient HELE Technology – Global coal demand for electricity (Mtce) generation increases by 463Mtce from 3500 2014 to 2040, predominantly in the 3000 Asian region 2500 – In 2014 a
Slide 16: How Whitehaven Benefits
How Whitehaven Benefits EN WHITEHAVEN COAL
Slide 17: Whitehaven's Growing Customer Base
Whitehaven’s Growing Customer Base WHITEHAVEN GROWING PRODUCTION FULLY ABSORBED INTO PREMIUM ASIAN MARKETS Number of Whitehaven Customers – Whitehaven sells all of its thermal and metallurgical coal (excludes Traders) Japan production into the seaborne market – Whitehaven has become an important sup
Slide 18: Whitehaven's High CV Coals
Whitehaven’s High CV Coals USE OF MAULES CREEK COAL IN POWER GENERATION REDUCES CARBON EMISSIONS Carbon Emission Improvement by Coal Type 0.0% Lignite – Using higher quality coals in USC (2%) (HELE) power stations lowers carbon Improvement in CO2 intensity (%) emissions (4%) Indo, Sub-bit 4000 NAR –
Slide 19: J-Power Case Study
J-Power Case Study WHITEHAVEN’S COAL IS USED IN JAPAN’S MOST EFFICIENT POWER STATIONS – In FY2016 62% of Whitehaven’s thermal coal was sold to Japan – The state of the art Isogo power station uses Narrabri coal and Maules Creek coal – As evidenced by Japan’s COP 21 energy target mix statement coal w
Slide 20: Taipower Case Study
Taipower Case Study WHITEHAVEN’S HIGH QUALITY COAL IMPROVING THERMAL EFFICIENCY – Worlds largest coal power plant at 5,500MW installed – Taiwan's newest coal power plant at 800MW installed – Sub-critical – Ultra-supercritical – Efficiency ~36% sent out (LHV) – Efficiency ~41% sent out (LHV) – Annual
Slide 21: Outlook
Outlook EN WHITEHAVEN COAL
Slide 22: Near Term Seaborne Coal Demand Growth
Near Term Seaborne Coal Demand Growth WHITEHAVEN EXPECTS COAL DEMAND TO GROW OVER NEXT FIVE YEARS Thermal Coal Demand Growth in Whitehaven's Key – Coal consumption is set to grow in Markets (Mt) all of Whitehaven’s current markets 600 and in target SE Asian markets 500 – All of Whitehaven’s current
Slide 23: Market Outlook – China is Important
Market Outlook – China is Important CHINA DOMESTIC PRODUCTION HAS FALLEN AND SEABORNE IMPORTS INCREASED – Policy changes adopted in early 2016 in China (276 working day limit) caused significant production cuts – The NDRC is adjusting the policy following the sharp rise in domestic coal prices in re
Slide 24: Where To From Here For Whitehaven
Where To From Here For Whitehaven POISED TO CAPTURE THE BENEFIT OF HIGHER COAL PRICES − Continue to ramp up production from Maules Creek and Narrabri − Maintain the focus on costs to ensure the business remains placed in the first quartile − Delever the balance sheet so company remains positioned to
Slide 25: A Few Parting Reflections - Industry
A Few Parting Reflections - Industry − The industry has been through some tough times − Climate concerns, ICAC and new versus old industry narrative have coloured the publics opinion − Social media peddling 1000’s of sources of “truth” unhelpful − State government needs to demonstrably “own it” − Pu
Slide 26: A Few Parting Reflections - Whitehaven
A Few Parting Reflections - Whitehaven − Good assets are a start − A great team makes a lot of them − Rebasing costs has been essential − Community education and stakeholder engagement has never been more important − Keep your bankers close by and well informed − Engage earlier with government depar
Slide 27: www.whitehavencoal.com.au
www.whitehavencoal.com.au -N WHITEHAVEN COAL ATO
Slide 28: Appendices
Appendices EN WHITEHAVEN COAL
Slide 29: Resources
Resources Note: See Competent Person Statement on Slide 2 29 // SYDNEY MINING CLUB 2016
Slide 30: Reserves
Reserves Note: See Competent Person Statement on Slide 2 30 // SYDNEY MINING CLUB 2016