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Whitehaven Coal Limited : Annual Report 2011
WhitehavenCoalLimited–AnnualReport2011 19 In addition, Whitehaven and Pacific National (PN) entered into a long-term agreement for rail haulage in December 2009. The new coal train ordered by Whitehaven in 2009 was delivered and put into service in the September 2010 quarter. This train is being operated by PN under lease from Whitehaven. A second new train was delivered by PN in January 2011 and a third new train will be provided by PN in October 2011. A Capacity Framework Agreement for providing access to additional port capacity at Newcastle was agreed by Newcastle Ports Corporation, PWCS and NCIG in April 2009 and subsequently approved by ACCC. Under this agreement, Whitehaven will have access to approximately 10.2 Mtpa of port capacity from PWCS and NCIG. Stage 1 of the new NCIG coal loading terminal (Whitehaven owns 11%) is continuing to ramp up to its 30 Mtpa capacity. Construction of the second stage (2AA) of NCIG is underway and is expected to be commissioned in mid-2012, taking the capacity of NCIG to 53 Mtpa. Final feasibility of the last stage of NCIG (2F) is complete and commitment to construction is expected in August. This will take the port to its full capacity of 66 Mtpa in late 2013, of which Whitehaven’s share will be approximately 6 Mtpa. CORPORATE As widely reported during the year, in October 2010, following numerous approaches to the company over several months, Whitehaven announced that it was commencing a formal process to enable selected interested parties to conduct due diligence and submit proposals for a potential corporate transaction with the company. In April 2011 we advised that the formal process was reaching a conclusion with shortlisted parties having completed due diligence and submitted formal proposals. After further negotiation of these proposals, the Whitehaven Board determined that no proposal was sufficiently attractive to warrant recommendation to shareholders. The process was then terminated, allowing the Board and management to continue to focus on our existing high quality coal assets and to examine attractive growth opportunities. CARBON TAX The Federal government recently announced details of a proposed carbon tax commencing on 1st July 2012. The proposal is for a price commencing at $23 per tonne of CO2 equivalent. At this price, the company’s current estimate of the impact of the tax is approximately $1.60 per tonne of saleable coal from the company’s open cut and underground mines. Further work is being undertaken to firm up the impact of the carbon tax on Whitehaven business and we will advise as more information becomes available. OUTLOOk Whitehaven has emerged from FY2011 with a strong financial position, low-risk open cut production base and attractive growth profile. Careful management and investment in our infrastructure requirements means we have appropriate infrastructure in place to support planned future production. Strong fundamental growth in demand for both metallurgical and thermal coal remains, although supply continues to be constrained by infrastructure and regulatory issues. Tony Haggarty Managing Director
Annual Report 2010
Annual Report 2012