Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — UBS Iron Ore and Coal Conference 2014
27 slides from Whitehaven Coal's conference presentation, Dec 3, 2014
Slide 1: Conference Presentation announcement
3 DECEMBER 2014 CONFERENCE PRESENTATION Whitehaven Coal Limited (ASX: WHC) advises that the attached presentation will be delivered by Paul Flynn, Managing Director and CEO, at an industry conference today. FOR FURTHER INFORMATION, PLEASE CONTACT: Michael Van Maanen – Media Ian McAleese – Investor R
Slide 2: Whitehaven Coal Limited – UBS Iron Ore and Coal Conference
Whitehaven Coal Limited UBS Iron Ore and Coal Conference Sydney 3 December 2014
Slide 3: Disclaimer
Disclaimer 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 4: Agenda
Agenda Whitehaven Introduction Coal and its future Coal Industry Developments Narrabri Maules Creek Vickery Costs & Margins Financing and Growth Conclusion UBS Conference 3
Slide 5: Our goal: Creating Australia's premier ASX listed coal company
Our goal Creating Australia’s premier ASX listed coal company UBS Conference 4
Slide 6: Introduction to Whitehaven
Introduction to Whitehaven Whitehaven is headquartered in Sydney and currently employing over 650 people with about 75% living in the Gunnedah region around its operating mines Whitehaven owns 3 open cut mines, 1 large underground mine and is currently developing another large open cut mine producin
Slide 7: Where we operate
Where we operate Maules Creek (75%) • Reserves to support ~ 30 years • Permitted & Planned : 13 Mtpa ROM • SSCC, PCI and high energy thermal Narrabri North (70%) • Reserves to support ~ 25 years • Permitted : 8 Mtpa ROM • Planned : 6 Mtpa ROM • PCI & low ash thermal coals Tarrawonga (70%) • Reserves
Slide 8: Coal in today's world
Coal in today’s world UBS Conference 7
Slide 9: Coal's growing role in global energy
Coal’s growing role in global energy Nearly 3.5 billion people in the world have limited or no access to electricity World Demand for Coal (Mtce) Coal is the lowest cost source of electricity for many 8000.0 countries around the world 7000.0 6000.0 5000.0 BP expects word coal demand to increase by 1
Slide 10: Australian political support
Australian political support “Energy is what sustains prosperity and coal is the world’s principle energy source and it will be for many decades to come” and “Coal is good for humanity, coal is good for prosperity, coal is an essential part of our economic future, here in Australia and right around
Slide 11: Capex falling
Capex falling The downturn in the mining industry from weaker coal prices has lead to a significant fall in capex by companies The surge of new capacity brought on in response to the high prices of three to four years ago is ending By late 2015/2016 capex will decline to about normal sustaining leve
Slide 12: Industry costs
Industry costs Over 50% of seaborne thermal coal producers are currently losing cash on a delivered basis to China With the thermal coal price so deep into the cost curve production cuts are likely to occur in the months ahead 6000kcal-adjusted export supply curve 120 USA Colombia Delivered S.China
Slide 13: Indonesian situation
Indonesian situation Exports from Indonesia have grown strongly while coal quality has deteriorated significantly High grading by lowering strip ratios may have ended Mine lives based on current reserves are declining with HRUM at 6.2 years, ITMG at 8.5 years and ADRO at 15.9 years implying a reduct
Slide 14: Demand growth
Demand growth India expects to add significant new thermal generating capacity which will lead to strong growth in coal imports Planned generating capacity of about 18GW to be added in Korea over the next 7 years will require an extra 45Mtpa coal demand from the seaborne market Japan is also conside
Slide 15: Industry context - productivity
Industry context - productivity All Australian producers are working to improve their productivity levels with success becoming evident Productivity from Whitehaven’s mines has consistently outperformed the NSW average in recent years When Maules Creek is fully ramped productivity across Whitehaven’
Slide 16: Narrabri performing strongly
Narrabri performing strongly Productivity in FY2014 was about 17,000t/m/y (ROM basis),expectations for FY2015 are for a further 10% improvement Average monthly production has improved with each longwall panel Longwall coal production in LW04 has commenced, production in FY2015 forecast to exceed ear
Slide 17: Narrabri beyond FY2015
Narrabri beyond FY2015 The introduction of a wider longwall panel face was found to be superior to top coal caving Key benefits of a wider panel face (400 metres) - Increases annual productivity of mine (lower costs) - Low risk option - Less road development required over LOM (60km) - Ensures SCOTA
Slide 18: Maules Creek construction "S" curve
Maules Creek construction “S” curve Revenue from coal sales will commence in January 2015, several months before the project is completed Whitehaven expects to have spent about $600 million at the time of the first coal shipments from Maules Creek Commissioning of the by-pass circuit is underway wit
Slide 19: Maules Creek mining progress
Maules Creek mining progress Ultra class equipment is operating in the open cut by Whitehaven employees Sufficient equipment to operate at 6.0Mtpa ROM rate will be on site and operating from early in CY2105 Project likely to be declared commercial from 1 July 2015 with positive EBITDA generated in t
Slide 20: Maules Creek – rail progress
Maules Creek – rail progress Laying ballast for the rail Cut 3 Rail in place Rail line will be completed shortly UBS Conference 19
Slide 21: Maules Creek – By-pass system
Maules Creek – By-pass system UBS Conference 20
Slide 22: Vickery approval
Vickery approval Approval granted by NSW Government in September Vickery Project Key Elements Details Location About 25kms north of Gunnedah Reserves of 204Mt contained within a Resource of 508Mt with Resources and Reserves significant upside potential on contiguous tenements Whitehaven 100%. Consid
Slide 23: Costs continue to fall
Costs continue to fall Sep Qtr H2 H1 FY2015 FY2014 FY2014 (1) FY2014 Whitehaven increased its EBITDA margin during Coal Sales (equity basis, excl. the September quarter '000t 2,388 3,913 4,302 8,215 purchased coal) Average revenue (excl. purchased coal & $A/t 71 77 81 79 Strong production from Narra
Slide 24: Refinancing progress
Refinancing progress Maules Creek construction is fully funded by the current debt facility and the project is being de-risked each day as first coal sales move closer to fruition The syndicate banks in the current facility are fully supportive of Whitehaven and have shown the ability to be unanimou
Slide 25: Whitehaven's low cost growth
Whitehaven’s low cost growth Saleable Coal Production by Mine (Mt) 25.0 Production is expected to more than 125% Growth double by FY2018 as Maules Creek 20.0 ramps up to its full capacity 15.0 Saleable production in FY2015 is expected to be about 14Mt on a 110% Growth 10.0 100% basis (includes 2.5Mt
Slide 26: Targets for FY2015
Targets for FY2015 Aiming for ongoing improvement in safety performance at all operations Ensuring construction of Maules Creek remains ahead of schedule and under budget Developing long term markets and sales contracts for all Maules Creek production Recruiting and training the workforce to operate
Slide 27: Thank you
Thank you www.whitehavencoal.com.au
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