Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — BAML Global Metals, Mining & Steel Conference 2015
28 slides from Whitehaven Coal's conference presentation, May 14, 2015
Slide 1: Whitehaven Coal Limited
Whitehaven Coal Limited GLOBAL METALS, MINING & STEEL CONFERENCE BARCELONA, SPAIN 12 – 14 MAY 2015
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 Sales Destination and Quality Coal Use Comparison with Global Peers Growth, Productivity & Costs Operations Community Contribution Conclusion 3 // BAML CONFERENCE MAY 2015
Slide 4: Our goal
Our goal To become Australia’s leading independent coal company 4 // BAML CONFERENCE MAY 2015
Slide 5: About Whitehaven Coal
About Whitehaven Coal LOW COST MINES PRODUCING HIGH QUALITY COAL ASX Code: WHC Shareholders – 1025 million shares on issue – Farallon 16.6% – Market Cap $A1.6 billion – AMCI 14.7% – Trading 90 million shares per month – Eastspring 8.0% Whitehaven Operations – Manning & Napier 6.0% – Narrabri U/G min
Slide 6: Where we operate
Where we operate LARGEST PRODUCER IN BASIN Maules Creek (75%) Tier One Mine – Reserves ~ 30 years, Permitted & Planned 13Mtpa – SSCC, PCI and high energy thermal Narrabri (70%) Tier One Mine – Reserves ~ 25 years, Permitted 8Mtpa, Planned 7Mtpa – PCI & low ash thermal Werris Creek (100%) – Reserves
Slide 7: Sales destination
Sales destination NO COAL SALES IN CHINA Metallurgical Coal Sales FY15 (Est) – Thermal coal sold into premium Asian 13% markets India 27% Japan 60% – Coal quality to improve as high quality Taiwan production from Maules Creek ramps up – Sales mix improves as higher margin Thermal Coal Sales FY15 (Es
Slide 8: Whitehaven's markets
Whitehaven’s markets STRONG DEMAND GROWTH IN WHITEHAVEN’S MARKETS – Korea and Japan are adding new coal fired thermal power station Asian Region Thermal Coal Imports (Mtpa) capacity 450 400 – New capacity will reduce carbon 350 emissions by utilising either ultra 300 super critical (USC) or advanced
Slide 9: Premium market growth
Premium market growth INCREASING PRODUCTION CAN BE SOLD INTO GROWTH MARKETS Korean and Japan Incremental Electricity Capacity (GW) – Over the next eight years Korea and Japan will add a further 34.5GW of 40 thermal power station capacity 35 30 – Each GW of generation requires 25 about 2.5Mt of coal
Slide 10: Whitehaven redefining thermal coal quality
Whitehaven redefining thermal coal quality High 1.00 NCV China BTU/lb (kcal/kg) 0.90 Indonesian 4,000 – 8,280 sub-bit 5,200 0.80 Korea Total Sulphur (% air dried basis) 5,400 – NSW High Ash 9,540 0.70 5,500 Surat Basin 5,650 10,170 0.60 Premium Hunter Rolleston 5,700 10,260 0.50 Valley (Japan) Moola
Slide 11: Pathway to lower carbon emissions
Pathway to lower carbon emissions USING COAL MORE EFFICIENTLY Improving efficiency of coal fired power stations will reduce carbon emissions Utilising USC technology or advanced UCS technology will lower emissions by 30% (820gCO2/kWh to 570gCO2/kWh) compared to gas combined cycle plants which emit 4
Slide 12: Whitehaven in global context
Whitehaven in global context INVESTORS HAVE LIMITED OPPORTUNITIES SEEKING COAL EXPOSURE Company Market YTD Coal Coal Market EBITDA Margin Cap Change Prod Quality Margin US$/t US$m's % Mt % Foresight Energy 1,871 -14.2 20.4 Thermal US Domestic 34.9% 18.97 New Hope Corp 1,470 -4.5% 5.7 Thermal Asian S
Slide 13: Delivering production growth
Delivering production growth LOW COST PRODUCTION GROWTH Saleable Coal Production by Mine (Mt) – Production will double by FY2018 25.0 from FY2014 as Maules Creek ramps up to 13Mtpa ROM coal 20.0 – Following an upgrade at Narrabri and 15.0 pre-commercial production from Maules Creek production is exp
Slide 14: Costs into first quartile
Costs into first quartile DELIVERING SUSTAINABLE COST REDUCTION AND MAINTAINING MARGINS – Unit costs down 20% from H1 FY2013 to A$63/t in H1 FY2015 ASP, Costs and Margin (A$/t) $85.0 $80.0 – Costs expected to fall another A$1/t to $75.0 A$2/t in the current half $70.0 $65.0 – Whitehaven has successf
Slide 15: Coal mine productivity
Coal mine productivity PRODUCTIVITY IMPROVING RAPIDLY NSW and Whitehaven Mine Productivity – NSW coal mine productivity 25.0 Maules Creek at 26,000tpmpy improving as companies lower 20.0 numbers and reduce costs Narrabri at 19,000tpmpy 15.0 – Productivity at Whitehaven’s mines 10.0 is higher than av
Slide 16: Capital efficiency
Capital efficiency GROWTH CAPEX COMPLETED Sustaining Capital – For the open cut mines sustaining capital is between $1.0/t and $1.5/t of annual production – At Narrabri sustainable capital is about $2.50/t – Total sustaining capex in the range of $35m to $45m per year Expansion Capital – The capex s
Slide 17: Funding – refi completed
Funding – refi completed REFINANCING COMPLETED, LOW PRICE AND FLEXIBLE Current Facility – The facility $1.4 billion comprises a combination of term loan, revolver and guarantee facilities maturing in June 2019 Flexible Structure – Lower interest rate, longer tenor with appropriate covenants and abil
Slide 18: Maules Creek
Maules Creek PROJECT ALMOST COMPLETED – Construction over 93% complete with capex $25 million less than original estimate of $767 million – Installed capacity at $62/t of product coal, low compared to other recent developments – CPP commissioning underway and coal reclaimers being installed – Projec
Slide 19: Maules Creek production
Maules Creek production SOLD OUT FOR THE FIRST YEAR – Sales in the first three months were 1.0Mt Maules Creek Cumulative Production – Thermal coal sales are priced at the (000's t) GlobalCOAL Newc Index with an energy 1400 adjustment, sold out for first year 1200 – Production expected to total 2.5Mt
Slide 20: Narrabri exceeding expectations
Narrabri exceeding expectations HIGHLY PRODUCTIVE LOW COST MINE – ROM coal production for FY15 upgraded to range of 7.0Mt to 7.2Mt Narrabri HY ROM Coal Production (Mt) – Longwall changeout time to decline to 4.5 five weeks following purchase of 4.0 additional equipment 3.5 3.0 – Decision on moving t
Slide 21: Stable open cut production
Stable open cut production STABLE PROFILE UNDERPINS BUSINESS – Three existing open cut mines Whitehaven HY Open Cut Production produce in the range of 5.2Mtpa to (Mt) 5.3Mtpa 3.0 2.5 – Recent restructure has reduced costs at each of the mines and the 2.0 CHPP 1.5 – Tarrawonga and Werris Creek 1.0 pr
Slide 22: Werris Creek open cut
Werris Creek open cut 22 //BAML CONFERENCE MAY 2015
Slide 23: Vickery – Whitehaven's next project
Vickery – Whitehaven’s next project ANOTHER SIGNIFICANT GROWTH OPTION Approval granted by the NSW Government in September 2014 Location – About 25kms north of Gunnedah Resources and Reserves – Reserves of 204Mt within Resource of 508Mt, same seams as Maules Creek Ownership – Whitehaven 100%, Seeking
Slide 24: Vickery project area
Vickery project area Rehab area Old Mine void 24 //BAML CONFERENCE MAY 2015
Slide 25: Community contribution
Community contribution MAJOR CONTRIBUTOR TO THE LOCAL COMMUNITY – Whitehaven does not support FIFO with over 74% of its employees living in the region around its mines – Wages paid to employees provide significant economic benefits to the region – Recruitment at Maules Creek continues with 215 emplo
Slide 26: The year ahead
The year ahead FOCUSSED ON SAFETY AND PRODUCTION GROWTH Maintaining focus on improving safety performance at all operations Completing construction of Maules Creek and commercial declaration Successfully ramping up Maules Creek beyond current production Improving efficiencies and seeking further cos
Slide 27: Conclusion
Conclusion CREATING AUSTRALIA’S PREMIER ASX LISTED COAL COMPANY Strategically Whitehaven is well positioned for the future – There is strong demand for the high quality coals produced from the Gunnedah Basin – Costs are in the lowest cost quartile – Production growth is being delivered by two tier o
Slide 28: Thank you
THANK YOU www.whitehavencoal.com.au
Whitehaven Coal — BAML Global Metals, Mining & Steel Conference 2015 on 6ix