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Whitehaven Coal Limited : Annual Report 2012
22 ASTON MERGER AND SYNERGIES The integration of Whitehaven, Aston, Boardwalk and Coalworks is complete with the integration of people, property and systems having progressed smoothly. Since balance date, a new organisational structure was announced, designed to accommodate the needs of our existing business and the needs of the much larger and complex business we are becoming. The restructure included the creation of seven Executive General Manager roles, each filled by existing management. The three companies are now operating as one and the Group remains on track to achieve the synergies as outlined in the Scheme Booklet at the time of the merger. Key short-term synergies will include reduction in costs from the procurement of tyres, fuel, explosives, above rail services, electricity, banking facilities and other corporate costs. Longer-term synergies are expected from extensive coal blending opportunities and integrated rail and port infrastructure synergies once Maules Creek is in operation. COALWORKS TRANSACTION In early May, Whitehaven announced a proposal to acquire all of the Coalworks Limited (ASX:CWK) shares, that it did not already hold, through an off-market takeover bid for $1.00 per share (the Offer). Whitehaven Coal Holdings commenced compulsory acquisition proceedings for all the ordinary shares it did not own in Coalworks on 19 July 2012. Whitehaven announced on 21 August 2012 that the compulsory acquisition process has been completed and that Whitehaven Coal Holdings now holds 100% of the ordinary shares in Coalworks. CARBON PRICING MECHANISM The Federal Government's carbon pricing mechanism commenced from 1 July 2012. With a price of $23 per tonne of CO2 equivalent emissions, Whitehaven's estimate of the impact of the tax is approximately $1.60 per tonne of saleable coal from our open cut and underground mines. OUTLOOK The substantial developments undertaken by Whitehaven in FY2012 have positioned the company well to continue to build its position as one of Australia's leading coal producers. Our merger with Aston and the acquisitions of Boardwalk and Coalworks have improved our operational diversification, creating a large-scale coal producer with significant growth potential. With Narrabri's longwall operations now in ramp-up mode, a substantial increase in coal production is imminent. This adds to our open cut mines which will continue to operate at a capacity of 5.5 Mtpa. Our strong portfolio of development projects also serves to reinforce our future growth pipeline. We have the appropriate infrastructure and organisational management structure to support our current operations as well as the significant increase we expect in production over the coming years. Whitehaven is planning to produce approximately 9 to 10 Mtpa of thermal and metallurgical coal in the 2013 financial year with approximately 4.0 Mtpa expected from the ramp-up of longwall coal production and development coal at the Narrabri mine. Tony Haggarty Managing Director MANAGING DIRECTOR'S REPORT
Annual Report 2011
Annual Report 2013