Australia’s Whitehaven jumps on positive coal price outlook, Q1 output beat

(Reuters) -Australian miner Whitehaven Coal said on Friday that it was optimistic about further gains in metallurgical coal prices due to supply constraints, and reported better-than-expected first-quarter output, sending its shares nearly 8% higher.

The country’s biggest independent coal miner, which bought two metallurgical mines from BHP last year, said that a shortfall in global coal production with long-term output constraints and higher sea-borne demand from India is anticipated to drive prices up.

Shares of the company rose 7.8% to A$6.92, as of 2332 GMT, in their best trading session since mid-August, while the benchmark ASX 200 index was up 0.2%.

Whitehaven’s total managed run-of-mine (ROM) production for the three months ended Sept. 30 was 9.7 million metric tons, beating a Visible Alpha consensus of 9.1 million tons. This compares with 5.3 million tons a year ago.

The biggest contributing segment, Queensland coal mines — a part of BHP Mitsubishi Alliance (BMA) metallurgical coal joint venture — was purchased last year by Whitehaven for $4.1 billion in a bid that the company said would increase its exposure to markets in India and Southeast Asia.

In its second quarter of output, the Queensland mines reported ROM production of 5.3 million tons, compared to 4.8 million tons in the June quarter.

“In Queensland, we are seeing productivity gains and cost improvements,” said CEO Paul Flynn.

On the other hand, the coal miner’s New South Wales operations posted a 18% decline in ROM output, with both production and sales expected to be weighted more heavily towards second half of the year.

Coal prices realised rose marginally in the quarter with Whitehaven earning A$238 ($157.89) per ton of coal sold, compared to a average realised price of A$224 per ton booked a year earlier.

($1 = 1.5074 Australian dollars)