Controversial miner Whitehaven Coal received a $1.4 billion lifeline in a depressed market, securing refinancing from a syndicate of Australian and international banks at a lower rate than its existing debt.
Whitehaven said new facility’s $1.2 billion drawable line of credit is for general corporate purposes and matures in July 2019.
CEO Paul Flynn said the company was delighted with the support.
“It demonstrates Whitehaven’s improved creditworthiness and the increased confidence that lenders have in our growth plans and in our capacity to execute them ahead of expectations,” he said.
Whitehaven had been locked in legal battles and protests with landholders over its new Maules Creek open cut facility in northern NSW, the largest coal mine under construction in Australia, but the facility began shipping in December, three months ahead of schedule.
The reduced risk on that project has contributed to a better deal.
Last year, environmental activist Jonathan Moylan was given a 20-month suspended prison sentence over a 2013 fake media release that claimed the ANZ Bank was withdrawing a $1.2 billion line of credit to Whitehaven. It wiped $300 million from the company’s value before the forgery was discovered
Initial production at Maules Creek planned at 6 million tonnes per annum from March 2015, ramping up to to 13Mtpa within three years.
The company expects to produce high quality thermal coal, for electricity, and specialist metallurgical coals, for use by steel makers, for the Asian market.
Whitehaven shipped 2.3 million tonnes of thermal coal in the December quarter, at a $US66.07 tonne average.
Coal prices have been flat for the past two years leading to mine closures elsewhere and two months ago, Citi downgraded its forecasts for 2015 by around 10%, with coking coal down $9 to $113/tonne estimate and thermal coal down $12 to $55/tonne
But Whitehaven believes it can get higher prices this year.
The company’s shares are up nearly 9 cents or 5.5% to $1.64 today.