MELBOURNE (Reuters) - Australian miner New Hope Corp on Tuesday said thermal coal prices would push higher in coming months, extending a rise that helped boost its profits in the last financial year.
The company said its full-year pretax profit climbed 6 percent to A$149.5 million ($107.49 million) from $140.6 the year before, as markets for thermal coal priced in Australian dollars soared on the back of pollution-linked output curbs in major supplier China.
“We are seeing continued (demand) strength for that premium product, and it is attracting a good price because there is no significant increase in supply being driven by the price signal,” New Hope Chief Executive Shane Stephan told Reuters.
“Australian mines are at their capacity and it’s very difficult to get approvals for any new coal mines, and as a result people can’t react quickly.”
Australian spot thermal coal cargo prices in recent months hit their highest in six years, and at $120 per tonne remain a third above lows in seen in April. They were boosted by a heatwave across the northern hemisphere, as well as by the output cuts in China, the world’s biggest consumer of coal.
“We would (usually) be expecting to see lower coal prices than we are currently seeing in markets because right now is shoulder season, so it’s the end of the northern hemisphere summer,” Stephan said.
“(Consumers) don’t really start restocking for winter until the end of October to the start of November, and we are still seeing quite high prices ... These are good signals for the immediate future.”
New Hope, one of Australia’s main coal miners, is waiting on approval to extend its Acland operations in the state of Queensland, with regulators set to consider the move in early October.
The firm said on Tuesday that in the last financial year it lodged a A$132 million impairment on its Colton project, also in Queensland, as part of ‘take-or-pay’ obligations linked to access to the Wiggins Island Coal Export Terminal (WICET).
The terminal obtained court approval last week for a $3.2 billion debt refinancing plan, offering respite to its owners including Glencore and New Hope who would have had to start repayments this month.
New Hope sells most of its coal to Japan and Taiwan, ahead of China. It has also seen a pick up in demand from Vietnam.
The miner has not seen any change to its investor base as a result of environmental concerns, Stephan said.
($1 = 1.3908 Australian dollars)
Reporting by Melanie Burton; Editing by Joseph Radford