The Blackwater mine
Australia's Whitehaven Coal reported a near 4% rise in quarterly production on Friday, helped by strong performance at its open-cut mines, and said it was exploring a potential stake sale in the Blackwater mine.
Shares of the country's top independent coal miner rose as much as 7.3% to A$8.380 by 00:50 GMT to become one of the top gainers in the benchmark index, which was up nearly 1%.
Whitehaven said it was exploring a potential sell-down of about 20% of Blackwater to global steel producers as strategic joint venture partners.
The miner had acquired the Blackwater and Daunia mines from BHP Group in a $4.1-billion deal last October, and expects the acquisition to complete in early April.
Whitehaven kept its coal production and sales guidance for fiscal 2024 unchanged, but said its Maules Creek and Gunnedah open-cut mines were now tracking towards the top end of its guidance range.
Production at Maules Creek jumped 50% in the second quarter from a year earlier, while Gunnedah output rose more than 6%.
Meanwhile, the coal miner cut its annual production guidance for the Narrabri mine due to greater-than-expected productivity impacts from geological challenges during the second quarter.
Whitehaven now expects Narrabri production to come between 5.1-million tonnes and 5.7-million tonnes for fiscal 2024, down from 6.0-million tonnes to 6.-million tonnes previously forecast.
Given the strong performance of Maules Creek and Gunnedah mines and the weaker-than-expected performance of Narrabri, the production mix is expected to be skewed to open-cut operations in fiscal 2024, Whitehaven said.
"It looks like the company is adjusting to a period of softer demand and sticky cost pressures. It's a move towards greater efficiency amid what's likely to be a cyclical downturn in demand," said Kyle Rodda, a senior financial market analyst at Capital.com.
Whitehaven's managed run-of-mine (ROM) coal production came in at 5.0-million tonnes for the three months ended December 31, compared with 4.8-million tonnes posted a year earlier and a Visible Alpha consensus estimate of 4.7-million tonnes.