Whitehaven Coal looks to the Bowen Basin for diversification and growth opportunities Paul Flynn, Managing Director and Chief Executive Officer Whitehaven Coal
A
little over 12 months ago, my contribution to this Yearbook reflected on the opportunities and challenges the industry was encountering, driven in large part by ongoing trade sanctions, labour constraints and the cyclical nature of the industry.
While many of these remain, and likely will for some time, it has been a productive year for Whitehaven Coal. Like many of our peers, we benefitted from high coal prices to deliver a record financial performance in FY23. This helped to provide us with a platform to pursue growth opportunities and deliver on our long-held strategy to diversify our portfolio and geographic exposures. Daunia and Blackwater mine acquisitions Announced in October 2023, our acquisition of the Daunia and Blackwater metallurgical coal mines in the Bowen Basin marks a significant milestone for Whitehaven and reflects our 42
BBMC Yearbook 2023
commitment to evolving the business to align with changing market demands. Whitehaven has a long and proud history of producing premium-quality coal in the Gunnedah Basin in Northern NSW and we are excited to bring our track record of safe, sustainable operations and long-term community investment to Queensland. The opportunity to acquire both the Daunia and Blackwater mines will enable us to transform Whitehaven into a metallurgical coal producer, doubling our saleable production and opening the door to new and critical market segments across Asia where demand for both metallurgical and thermal coal will continue for decades to come. In addition to being the largest acquisition in our corporate history, the deal represents our biggest investment in Queensland and takes Whitehaven from a company that is developing in the Bowen Basin (via our Winchester South Project) to one that will be immediately operational from financial close. The Bowen Basin is a globally-renowned coal region with a rich history and a proud record of innovation. We are thrilled to be establishing a larger local presence, and we look forward to greater opportunities to engage and share expertise with our industry peers in years to come.
Diversifying risk and operations In making the decision to acquire Daunia and Blackwater, Whitehaven conducted extensive due diligence, assessing alternative capital allocation opportunities and strategic growth options. Ultimately, we determined the acquisition provided a unique opportunity to accelerate our growth while diversifying and de-risking our business. In light of the challenges our industry has and will continue to face, the need to consider greater diversification is becoming an increasingly prominent discussion among Boards and management teams looking to shore up their operational longevity and buttress against exogenous factors as much as possible. The acquisition of Daunia and Blackwater achieves this, providing Whitehaven with greater exposure to long-life, metallurgical coal assets with attractive cost profiles. It will diversify our customer concentration and reduce risk as we expand outside of a single coal basin and a single port, with our operations to increase from four to six operating mines and our exports to be spread across three ports, as opposed to one.
