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Whitehaven Coal Limited : Annual Report 2013
Dear shareholder, It has been an extremely eventful and challenging year for Whitehaven Coal and our team. As the leading, independent, listed coal business, we are uniquely positioned in the Australian coal mining industry. Our underlying open cut business is performing well; our modern, world-class Narrabri underground operation is approaching its full production rates; and our Tier 1 Maules Creek asset has received all approvals required to commence construction. Our growth trajectory is ambitious, but very achievable, and we have assembled a serious team of the most highly-skilled and experienced professionals in the industry to ensure we deliver these coal resources to our customers in the most sustainable, e cient and cost- e ective way possible. The development of our major green eld projects is not without its challenges. Our team is methodically nding innovative solutions to these challenges, while ensuring the broader perspective remains in sight. Coal markets and their impact on our business Global coal markets continue to su er. Low prices, combined with a generally high Australian dollar have forced us to review all aspects of our business. Given both prices and currency are beyond our control, we are left with no option but to reduce costs, improve e ciency and optimise our operations. Notwithstanding the Australian dollar is now moving in the right direction for our business, the focus on costs is being maintained. There is no doubt that external factors have seriously impacted our nancial performance for the year. Our overall nancial result of a loss of $82.2 million was disappointing, although in line with expectations. Notwithstanding the recent pressure on coal prices, we believe coal has an important long-term role in the global energy mix, and that Whitehaven will remain a competitive participant in the industry. Our semi- soft coking coal is increasingly being sought after as a viable alternative to hard coking coal in the steel making process. Coal is not only one of Australia's largest export industries, but one of the world's most reliable sources of cost-e ective energy -- underpinning economic growth and increased standards of living in many countries around the globe. Our coal is relatively clean and high in energy with low trace elements, low ash, low sulphur and low phosphorous. As the world moves towards cleaner sources of coal it actually bene ts both Whitehaven and Australian coal producers more broadly. Our management team has responded well to these challenges, making a number of di cult decisions. We have placed our Sunnyside operation on care and maintenance and increased production at Werris Creek, revised mine plans at our Tarrawonga and Rocglen mines have reduced strip ratios and a shared services facility has been developed to reduce corporate costs. Maules Creek Securing government approval for our Maules Creek project was a key milestone in the Company's development. It will see us more than double in size, and will lower our overall cost of production. One of the best things we can do to future proof our business in these di cult times is to bring on stream the lowest cost production we can. Maules Creek achieves this objective. As has been widely reported there was a legal challenge to the Federal Minister's approval decision. The challenge does not prevent work commencing on the project. We are working vigorously to have rst coal by the rst quarter of CY2015. Our Maules Creek team remains extremely focused on putting the appropriate planning in place to facilitate an on-time and on-budget construction process. Our underlying open cut business is performing well; our modern, world-class Narrabri underground operation is approaching its full production rates; and our Tier 1 Maules Creek asset has received all approvals required to commence construction. 4 Whitehaven Coal Limited Annual Report 2013 Chairman's Letter
Annual Report 2012