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Whitehaven Coal Limited : Annual Report 2012
CHAIRMAN'S LETTER 2 Dear Whitehaven Shareholder, 2012 OVERVIEW It has been a transformative year for Whitehaven Coal. The successful merger with Aston Resources and the acquisitions of Boardwalk Resources and Coalworks have secured our position as one of Australia's leading independent coal miners. We now have a business with enviable growth potential, with our existing production of around 5 Mtpa expected to grow to more than 20 Mtpa by 2015, subject to the appropriate approvals being received. The merger of Whitehaven Coal and Aston Resources, and the acquisition of Boardwalk was announced in December 2011 and finalised in May 2012. From the time the transactions were announced, significant focus was directed to the integration of the businesses, and planning to ensure the appropriate management resources and infrastructure capacity were available to support the anticipated growth. This effort has now been rewarded with the Whitehaven, Aston and Boardwalk businesses, as well as the recently acquired Coalworks business, now operating as one company, with a highly experienced management team and a clearly defined future. OPERATIONS At an operational level we have seen the successful development of our $500 million Narrabri underground operation. Our first longwall coal was cut in June 2012 and production is continuing to increase. Our open cut mines performed at similar levels to last year, with production hampered by exceptionally wet weather in the December and March quarters. The lower production levels had an adverse impact on overall costs, with this being exacerbated by the mine scheduling changes required to address related water management issues. As outlined previously, we are still awaiting NSW Government approval for our Maules Creek development. The economics of this project are compelling, with an extremely competitive cost structure vis-à-vis global competitors. The project brings very large employment and economic benefits to North West NSW with up to 1000 construction jobs and 500 permanent jobs as well as annual operating expenditure in the local region of more than $500 million a year for at least 25 years. NSW Royalties are projected to be in the order of $100 million a year. Subsequent to balance date, the Director-General of the NSW Department of Planning and Infrastructure has issued a recommendation to the Planning Assessment Commission that the project's benefits outweigh its residual impacts and that it is in the public interest and should be approved, subject to a recommended series of conditions. We remain confident that approvals will be forthcoming, and continue to plan for efficient and timely development of the project on that basis. SUSTAINABILITY We are highly aware that with our expansion comes the need for unwavering corporate responsibility. First and foremost this responsibility is for the health and safety of our employees. We have invested significantly in our safety resources and processes during the year, including seeking broad feedback and input from our workforce as to how we can further improve. You can read more about our safety performance and initiatives, as well as our other sustainability initiatives, throughout this report. Additional resources have also been allocated to our expanding environmental team. As mining becomes more prominent throughout the region it is clear to both mining companies and the community more broadly, that cumulative impacts need to be monitored and managed. This process is currently in its infancy but Whitehaven continues to work with government agencies and other mining companies to develop a monitoring framework that can be expanded as development increases. In terms of our involvement with the community there is a valid expectation that we will not only engage with communities through our ongoing consultation program, but continually seek and listen to the views of a wide spectrum of community groups and organisations. Given the majority of our workforce and senior managers live in the region, this engagement is happening on a constant basis. There is a valid expectation that we will not only engage with communities through our ongoing consultation program, but continually seek and listen to the views of a wide spectrum of community groups and organisations.
Annual Report 2011
Annual Report 2013