Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Australia’s Whitehaven Coal Ltd on Wednesday reported a 23% plunge in first-quarter production as severe floods in New South Wales hit operations, including a week-long lock-out of its key Maules Creek mine.
Severe wet weather including floods in Australia’s most populous state, New South Wales, disrupted mining operations as the country suffered for a third straight year from the La Nina induced adverse weather.
“Operations slowed further as a result of labour shortages, absenteeism and seasonal impacts relating to heavy fog and increased noise-related delays in the winter months,” the company said.
The country’s largest independent coal miner, however, maintained its fiscal 2023 output and cost forecast on hopes of a better-than-expected performance at its Narrabri mine.
Whitehaven said while annual output at Maules Creek was on track to be at the lower end of its 11.7 million tonnes to 12.6 million tonnes (Mt) forecast, Narrabri was set to report production at the top end of its 5 Mt to 5.7 Mt outlook and could even exceed it.
The company was also bullish on coal prices after it achieved a record average price of A$581 per tonne in the September quarter, up from A$189 per tonne a year earlier.
“Looking locally, a number of weather events impacted coal producers during the September quarter, which together with the forecasted La Niña weather patterns, has further bolstered support for strong coal prices out of East Coast Australia,” Whitehaven said.
“We continue to view thermal coal prices as well supported throughout FY23 and beyond.”
The company’s managed run-of-mine coal production was 4 Mt for the quarter ended Sept. 30, compared with 5.2 Mt a year ago and brokerage Barrenjoey’s estimate of 5 Mt. Run-of-mine refers to ungraded coal, before it is processed.
(By Upasana Singh and Nausheen Thusoo; Editing by Vinay Dwivedi)
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