‘Phenomenal’ coal prices rise as New Hope profits soar
Mr Bishop said New Hope started its new financial year with coal prices more than doubling from the same period last year.
“Based on us not being too bothered by the rain and the supply chain still working, this year could be another banner year and foreign currencies don’t look set to rise anytime soon,” he said. The Australian Financial Review.
“We are also coming into winter for the Northern Hemisphere, so you can safely say that prices will likely rise before falling as we come to the end of the calendar year.
“When you combine that with the exchange rate which is currently around 66¢, it’s phenomenal.
“I think that will continue when you look at the supply and demand outlook, the supply response is not going to happen like in previous booms and demand seems to be constant and probably even more so now when people look at the current energy crisis.
The windfall dividend is worth about $175.3 million to New Hope’s largest shareholder, Washington H Soul Pattinson.
The payout comes after New Hope returned $249.7 million to shareholders in its half-year results in March.
Tuesday’s huge profit and the promise of another great year to come justify New Hope’s decision to buy the majority stake in the Bengalla thermal coal mine in New South Wales.
New Hope paid $865 million to Rio Tinto for its 40% stake in 2015, then paid $860 million to Wesfarmers for an additional 40% stake in 2018.
Mr Bishop said New Hope had easily made a return on its investment in Bengalla. “We will pay very quickly [it] start again at this rate, ”said Mr. Bishop.
The comments come after Yancoal’s 2017 acquisition of Rio’s key NSW thermal coal assets paid for itself in five years.
Analysts said New Hope was paying a high price for the Bengalla stake it acquired in 2015.
But beyond its belief in the future of coal, New Hope had an additional strategic motivation in that it feared its Acland mine in Queensland would run out of resources before the Queensland government approved an extension. .
This fear turned out to be well placed; Acland has been inactive for much of the year and New Hope must obtain another water extraction license before it can expand the old pit and resume mining.
If approved, the Acland mine will produce approximately 5 million tonnes of coal each year.
Mr Bishop said some of Acland’s potential output was not under contract, meaning European nations scrambling to find fuel for the impending winter could potentially buy some.
“We certainly didn’t block all that coal,” he said.
“We have kept in touch with loyal customers from the past, but I think there are options to provide it to new customers and that can be in Europe. I think it’s fair to say that we won’t have any problem selling the coal.
“But we don’t get ahead of ourselves, we have to get the approval first, get the labor in and get the coal in and get it out.”
Mr Bishop said more than 600 employees had expressed an interest in working at Acland if the mine were to resume.
The strong interest comes at a time when many miners are struggling to find staff amid skills shortages, but Mr Bishop said Acland’s appeal was that workers could live in residence in Brisbane, Toowoomba or Dalby and didn’t need to work on the fly. in, fly-out list.