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The result continues a sobering week for the coal sector, where total losses are headed toward $1.5 billion after Glencore and BHP revealed huge losses on their local thermal and coking coal divisions.
All three companies were hit by extremely low prices for both coking and thermal coal between July and September as coronavirus lockdowns in many nations reduced demand.
China’s ban on Australian coal in the final three months of 2020 also did not help.
A recovery in coal prices over the Australian summer could not offset the financial damage done in the six month period.
Glencore’s Australian coal business lost $US602 million ($776 million) before interest and tax in the six months to December 31.
BHP’s Australian coal business lost a staggering $US478 million ($613.8 million) in the six month period, and that loss did not include tens of millions of dollars spent managing coronavirus precautions such as Queensland’s hard border.
There were further losses for BHP in its Colombian coal assets.
Whitehaven had not been expected to pay a dividend, under the conditions of a deal with lenders that relieved Whitehaven of certain covenants.
In good news for the company, unit costs declined to $70 per tonne during the period, down from $76 per tonne in the same period of 2019.
Unit costs have been one of the focuses of Whitehaven boss Paul Flynn’s “strive” agenda, which has sought to improve operating culture and decision making across the company.
Links
- The World’s Long, Messy Breakup With Coal
- Glencore Is Looking Lonely as Rivals Look to Abandon Coal Business
- EU calls for global coal power phase out
- Banks Shunning Australian Coal Trigger Parliamentary Inquiry
- Black outlook for coal: BHP slashes mine values
- China ban hits BHP coal arm as profits slide
- Coal plants to close by 2025 under WA election renewable energy plan from Liberals
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