Whitehaven Coal (ASX: WHC) is the largest independent coal producer and the leading coal producer in New South Wales (NSW). Whitehaven currently operate five mines in North West NSW; four open cut mines at Maules Creek, Tarrawonga, Werris Creek and Sunnyside and one underground mine at Narrabri. Whitehaven has a market capitalisation of A$3.1 billion.
What are the recent updates in Whitehaven FY20 Guidance?
- Total Managed ROM Coal Production range for FY20 is 20.0 – 22.0 Mt (previous range is 22.0 – 23.5 Mt).
- Managed Coal Sales range for FY20 is 19.0 – 20.0 Mt (previous range is 20.0 – 21.0 Mt).
What is the driver of this development?
The main driver of this lower guidance is due to issues at Whitehaven’s Maules Creek operation (Whitehaven largest operation). This operation Managed ROM Coal Production range has been reduced to 10.0 – 11.00 Mt (previously 12.0 – 12.5 Mt). The cause of this reduction is attributed to skilled labour shortages and impacts arising from dust events related to severe and ongoing drought conditions in NSW.
These disruptions are expected to continue further into the summer. However, these issues are temporary and are expected to pass as FY21 approaches.
What is the market reaction?
The market reaction to Whitehaven’s announcement is negative. Whitehaven share price is down 8% and is currently trading at A$2.75.
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