Whitehaven Coal shares were savaged on Friday after the miner downgraded its output number as a result of supply chain issues, unfavourable weather conditions, and COVID-19 pandemic-related labour shortages, impacting the export market.
Despite a positive outlook on demand and prices for thermal and metallurgical coal in 2022, flooding in parts of the country in November and labour shortages causing by the pandemic weighed on the company’s output expectations.
In addition, bans on coal exports were recently implemented in Indonesian, currently the world’s top exporter, in order to mitigate the impacts of low supplies to local power plants. As a result, the company that this was a "strong indication that supply is very tight, and incremental supply is almost non-existent."
Weather events across the Gunnedah Basin and Hunter Valley have impacted operational productivity and road access, resulting in a cumulative impact on production and sales volumes for the quarter.
Whitehaven updated FY22 guidance to account for the effects noted trimming its managed run-of-mine coal production outlook to between 19 million tonnes (mt) and 20.5 Mt, as it expected flooding to have delayed about 600 kilo tonnes (kt) to 700 kt of run-of-mine production at its flagship Maules Creek operation.
After sinking as much as 10%, shares closed the session 6% lower.