Coronado reinforces positive coal outlook

The company stated that China’s trade dispute with Australia would continue to lower Australia’s coal prices until it’s resolved.

“Although this has had a negative effect on global pricing, over the longer term this may be offset by the positive impact of more global steel producers restarting,” Coronado stated.

Coronado has flagged that improved economic conditions will see Australia remain as the world’s dominant seaborne coal supplier in the future.

The company is expecting coal supply to grow by around 13 per cent from 17 million tonnes in 2021 to 190 million tonnes in 2030, with seaborne metallurgical coal increasing from 298 million tonnes in 2021 to 340 million tonnes in 2030.

This is due to metallurgical coal requirements increasing by over 50 per cent from 2021 to 2030.

The company’s saleable production of coal was down to 17 million tonnes in 2020 compared to 20.2 million in the previous year due to operational impacts.

Sales volume last year was also down by 9 per cent to 18.2 million tonnes compared with the previous period, driven by temporary mine suspensions in Australia and the United States.

Coronado is expecting tight supply of metallurgical coal this year due to weather impacts on Australian mines.

Coronado managing director and chief executive Gerry Spindler said that its assets put the company in good stead when markets recover.

“We are now in the fortunate position of having high quality, well-operated assets with a 20 year plus life span,” he said.

“That means when markets recover, we can get on with business and not be concerned with greenfield or brownfield development risks, project financing, regulatory approvals or permitting.

“We can prudently increase production to meet demand in a scalable manner, with capital expenditure funded from cash flows and facilities.”