Written by Sneha Kumar
(Reuters) – Australia's Whitehaven Coal said on Friday it hoped for further gains in metallurgical coal prices due to supply problems and reported quarterly production ahead of market expectations, sending its shares nearly 8% higher.
Australia's largest private coal miner, which acquired two iron ore mines from BHP last year for $4.1 billion, said a shortfall in global coal production due to long-term production constraints and high offshore demand from India is expected to push up prices.
“There have been ongoing questions about the demand for coal given the global outlook for other energy sources, but for now the numbers from Whitehaven today have provided near-term comfort to investors,” said Tim Waterer, market analyst at KCM Trade.
Whitehaven shares rose as much as 7.8% to A$6.92 by 2332 GMT and were at their best session since mid-August, while the benchmark stock index rose about 0.5%.
Total owned run-of-mine (ROM) production was 9.7 million metric tons in the three-month period ended September, beating the Alpha Visual consensus of 9.1 million tons and up from 5.3 million tons last year.
A major contributor was Queensland coal mines, which Whitehaven bought from BHP and said it would expand its exposure to Indian and Southeast Asian markets.
In its second quarter of production, Queensland mines reported ROM production of 5.3 million tonnes, up 11% from the June quarter.
“In Queensland, we are seeing productivity gains and cost improvements,” CEO Paul Flynn said.
Meanwhile, ROM production fell by 18% at the New South Wales coal miner, and both output and sales are expected to moderate further in the second half of the year.
Coal prices rose slightly to A$238 ($157.89) per tonne, compared to A$224 last year.
($1 = 1.5074 Australian dollars)
