hunter business chamber - whitehaven coal€¦ · hunter business chamber 40.0 45.0 50.0 55.0 60.0...

Whitehaven Coal LimitedHUNTER BUSINESS CHAMBER

NEWCASTLE, AUSTRALIA

13 MAY 2016

Australian High Quality Coal Fuelling Asia

Whitehaven’s CostsCOSTS HAVE FALLEN SIGNIFICANTLY OVER PAST THREE YEARS

– Whitehaven’s costs are now firmly

entrenched in the first quartile of the

seaborne market

– Fully absorbed costs have fallen by

26% over three years to A$58/t in H1

2016

– EBITDA margin increasing

– Margin per tonne provides strong free

cash flow

HUNTER BUSINESS CHAMBER

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016

Whitehaven ASP and Costs ex Royalties (A$/t)

Average Sales Price Average Cost of Sales

2 //


-200

0

200

400

600

800

1000

1200

Oil Coal Gas Nuclear Hydro Renewables

Growth in Energy Sources 2004 - 2014 (Mtoe)

Source: BP Statistical Review 2015

3 //

Ten Year Demand Growth COAL HAS BEEN THE FASTEST GROWING ENERGY SOURCE OVER 10 YEARS


-100

0

100

200

300

400

500

600

700

800

Oil Coal Gas Nuclear Hydro Renewables

Growth in Energy Sources 2009 - 2014 (Mtoe)

Source: BP Statistical Review 2015

4 //

Five Year Demand Growth COAL HAS BEEN THE FASTEST GROWING ENERGY SOURCE OVER 5 YEARS

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

8.010.012.014.016.018.020.0

Su

lph

ur

(%a

.d.)

Ash (% a.d,)

Thermal Coal - Ash vs Sulphur

Korea

China

Hunter Valley

(Japan)

– Whitehaven produces some of the

highest quality coals sold in the Asian

region

– These high yielding, high quality

coals are sold into the premium Asian

seaborne markets

– As countries strive to reduce their

carbon emissions and use high

efficiency low emissions (HELE)

technology, they need and use higher

quality coals

High Quality Coal

Lower Quality Coal

Whitehaven

HUNTER BUSINESS CHAMBER 5 //

Gunnedah’s High Quality Thermal Coal


-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2013 2040

World Electricity Generation by Source (TWh)

Coal Gas Oil Nuclear Hydro Renewables

Source: IEA World Energy Outlook 2015 – New Policies Scenario

6 //

Global Electricity Demand Growth GLOBAL ELECTRICITY DEMAND FORECAST TO INCREASE BY 50% BY 2040 WITH COAL’S SHARE OVER 25% IN 2040


0

100

200

300

400

500

600

2013 2020 2025 2030 2035 2040

IEA Forecast Coal Fired Electricity Capacity (GW) and Coal Required (Mt)

GW Coal Demand

Southeast Asian Countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,

Philippines, Singapore, Thailand and Vietnam

Source: IEA Southeast Asia Energy Outlook 2015 based on the “central scenario”. If the

IEA “bridge scenario” was used electricity generation would be lower.

– Based on IEA forecasts coal fired electricity

capacity in Southeast Asia will almost

double between 2013 and 2020 and will

more than quadruple between 2013 and

2040

– Australian and more specifically

Whitehaven’s coal is well placed to supply

the growing demand

– Coal demand to increase by over 350Mtpa

from 2013

7 //

SE Asian Growth – Stronger MORE GENERATING CAPACITY BEING ADDED IN THE LONGER TERM


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Subcritical - Lignite Subcritical - BlackCoal

Super-critical Ultra Super-critical

Emissions by Technology (tCO2/MWh)

(18%)(34%)

(22%)

(36%) (49%)

– If Australia converted its lignite fired

subcritical power stations to black

coal fired USC plants then CO2

emissions would fall by about

33Mtpa or about 6% of the current

total emissions for Australia

8 //

Coal – Pathway to Lower Carbon EmissionsUTILISING HIGH QUALITY COALS IN MORE EFFICIENT HELE POWER STATIONS LOWERS EMISSIONS


0

500

1000

1500

2000

2500

All Countries current All Countries current & planned

Asian Coal Fired Power by Technology (GW)

Sub-critical Supercritical Ultra Supercritical

Source: IEA Clean Coal Centre, September 2015. Countries: Bangladesh, China, Japan, Malaysia, Philippines, South Korea, Taiwan,

Thailand and Vietnam

9 //

Deployment of HELE Gathers MomentumTHERE ARE 670 HELE UNITS IN OPERATION IN ASIA WITH A FURTHER 1066 PLANNED OR UNDER CONSTRUCTION


0

20

40

60

80

100

120

140

Large SolarPV

Large Hydro OnshoreWind

CCGT Geothermal SuperCritical Coal

Levelised Cost of Electricity SE Asia (US$/MWh)

– Supercritical and ultra supercritical power

stations provide reliable low cost electricity

to the large populations in southeast Asian

countries

– The intermittent nature of power from wind

and solar are not the answer in these

countries

Source: IEA Southeast Asia Energy Outlook 2015

10 //

Why are SE Asia Countries Deploying HELE Technology RELIABILITY AND LOW COSTS ARE DRIVING ASIAN COUNTRIES TO BUILDING COAL FIRED POWER STATIONS

26%

27%21%

9%

8%

3% 3%2% 1%

Japan COP21 Target Mix 2030

Coal

LNG

Nuclear

Hydro

Solar

Oil

Bioenergy

Wind

Geothermal

– In H1 FY2016, 62% of Whitehaven’s thermal coal

was sold in Japan, to increase as Maules Creek

coal is sold into Japan

– Coal will remain a key fuel source for Japan into

the future

Source: J-Power, Japan Government energy and climate policy July 2015 and Coal in

the 4th Strategic Energy Plan April 2014

Note: 1 The US Greenhouse Gas inventory report advises 2013 US CO2 emissions of

6.7 billion tonnes, 2 United States of America, China and India

HUNTER BUSINESS CHAMBER 11 //

Narrabri Coal Used in Japan’s Most Efficient Power Station IF JAPAN’S COAL FIRED GENERATING EFFICIENCY WAS ADOPTED ELSEWHERE2, CARBON DIOXIDE EMISSIONS WOULD BE REDUCED BY 1.5BT/Y1


– Coal is NSW’s most valuable export commodity

generating $14 billion in revenue in FY2015 and

20% of the value of all exports

– More than 20,000 people are directly employed in

the industry with many more indirectly

– Newcastle is the single largest coal export port in

the world

– Mining disturbs less than 0.1% of the land

surface in NSW

– Exports are growing strongly and will continue to

grow as Asian demand increases0

20

40

60

80

100

120

140

160

180

200

2003/04 2005/06 2007/08 2009/10 2011/12 2013/14

NSW Coal Exports (Mt)

Source: NSW Coal Services Annual Report FY2015

12 //

Coal in NSW COAL GENERATES OVER 85% OF NSW’S ELECTRICITY

– Whitehaven has 850 employees (FTE) with more than

75% living in area of our operations

– Delivered economic benefits with more than $800m

invested into NW NSW region over past 3 years

– Supporting growing communities – Gunnedah LGA

population grew from 11,524 in August 2006 to 12,826 in

2013/14 (11.3% increase).

– Population also increased year-on-year (2013/14) in

Liverpool Plains (0.7%) and Narrabri (0.6%)

– Total employment in Gunnedah Shire increased 16%

between 2001-2011, while agricultural employment in area

declined 22% over same period.

10,500

11,000

11,500

12,000

12,500

13,000

2005/06 2009/10 2013/14

Gunnedah LGA Population Growth


Source: ABS and Whitehaven Coal

13 //

Delivering Real Economic and Social BenefitsSINGLE LARGEST EMPLOYER IN NORTH WEST NSW REGION


– NSW has fallen to the second least attractive state for mining investment in Australia on the Fraser

Institute’s ‘Investment Attractiveness’ Index

– What is the Government’s own view on coal mining and the development of the State’s hydrocarbon

resources?

– Is New South Wales sleepwalking into an energy policy abyss?

– no structured plan for growing our export coal markets, and

– no structured plan to avoid becoming reliant on imported energy from other States

– Will we miss the commercial opportunities in SE Asia?

– What about large scale emissions reductions by promoting the use of our cleaner coals?

–

14 //

NSW Government Support IS THE NSW GOVERNMENT PROVIDING SUFFICIENT SUPPORT TO THIS KEY INDUSTRY?

THANK YOUwww.whitehavencoal.com.au

hunter business chamber - whitehaven coal€¦ · hunter business chamber 40.0 45.0 50.0 55.0 60.0...

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