Coal miners in NSW say surging COVID-19 infection rates are curbing production and adding to costs, with the virus robbing Whitehaven Coal of 1 per cent of annual production in the past three months alone.
Whitehaven and Yancoal both said the spread of the virus through the NSW coalfields had hurt productivity and exacerbated the larger disruption that came from severe weather and flooding in November.
Whitehaven downgraded its export target for the year to June by more than 4 per cent on Friday after coal production and sales dipped by 37 per cent and 11 per cent respectively in the three months to December 31.
Whitehaven blamed the virus for about 200,000 tonnes of lost coal production in the quarter and said hundreds of workers had been affected.
The absenteeism linked to the virus was expected to cost between $17 million and $34 million in the year to June.
The workforce at the Narrabri mine were significantly affected during the Christmas period, but Whitehaven expressed confidence that the mine was getting back close to normal staffing levels now.
Yancoal’s coal production fell by 2 per cent in the December quarter. The weak output comes after BHP and Coronado Global Resources reported weak Australian coal exports earlier this week and as Indonesia maintains a ban on coal exports.
The myriad disruptions to coal supply have helped drive prices for both coking coal and thermal coal to extremely high levels.
Premium hard coking coal from Queensland hit a fresh record above $US430 per tonne this week according to S&P Global Platts, while top quality thermal coal from NSW was fetching $US217.71 on January 14, according to GlobalCoal.
Top quality NSW thermal coal prices had never risen above $US200 per tonne until October last year and the record high of $US262 per tonne was set in November 2021.
Whitehaven managing director Paul Flynn said supply of coal globally was extremely tight.
“Our customers are screaming out for coal,” he said.
Whitehaven believes the high coal prices will ensure it is net cash by March – an amazing turn-around from late 2020 when the company was forced to seek covenant relief from lenders amid a coal price slump.
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