Whitehaven Coal : Dec 21 Quarterly & FY22 guidance - La Nina & COVID impacts

QUARTERLY REPORT

only21 January 2022

December 2021 Quarterly Report; Updated FY22 guidance - La Niña and COVID impacts

Highlights

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Whitehaven achieved coal pricing averaged A$211/t for the quarter (FY21 A$94/t, Q2 FY21 A$86/t)

December quarter managed run-of-mine (ROM) production 3.2Mt

December quarter managed saleable coal production 3.0Mt

Comments from MD and CEO Paul Flynn

"Coal prices continued at attractive levels through the December quarter and remain well supported for the near future given strong underlying demand and persistent supply-side disruptions.

∙December quarter total managed coal sales 4.0Mt,	"Cash generation has been strong, with the
personal	managed own coal sales 3.5Mt, total equity coal sales
business expected to be net cash in the March
3.3Mt and equity sales of own coal 2.9Mt
	quarter.
∙ Managed coal stocks 2.1Mt as at 31 December	"Whitehaven has unfortunately not been immune
∙ Whitehaven expects to fully repay its senior debt facility	to recent heavy rains that impacted large parts of
regional NSW and QLD as La Niña made its
	in February 2022 and be in a net cash position in March
	presence felt for the second Australian summer
	2022
	in a row.
∙ Narrabri longwall relocation from panel 109 to 110	"While we remain very confident about ongoing
	successfully completed in December
	favourable supply and demand dynamics, there
∙ Weather events across the Gunnedah Basin and	is elevated uncertainty associated with COVID's
	Hunter Valley have impacted operational productivity	impact on workforce availability and resourcing
	and road access, resulting in a cumulative impact on	through our supply chains.
	production and sales volumes for the quarter. FY22	"The strong balance sheet and robust market
	guidance has been updated to account for the effects of
	environment is an appropriate backdrop to
	significant rainfall associated with La Niña and COVID-
	provide an update on our capital management
	related labour shortages.
	strategy with our half year results."
For
Safety

The safety outcome for the Group for the 12 months ending 31 December 2021 was a total recordable injury frequency rate (TRIFR), on a 12 month rolling basis, of 6.1.

Whitehaven Coal Limited ABN 68 124 425 396

Level 28, 259 George Street, Sydney NSW 2000 | 02 8222 1100 | [e-mail] | www.whitehavencoal.com.au

Whitehaven Managed Production, Sales and Stock Volumes

Unusually heavy rain in the quarter caused local flooding that saw road access to the mines and Gunnedah CHPP cut off for up to two weeks. Flooding is estimated to have caused approximately 600kt - 700kt of ROM production at Maules Creek to be deferred and 100kt - 200kt of ROM production at the Gunnedah open cuts to be deferred.

The spread of COVID throughout NSW has resulted in an increase in the number of workers self-isolating, with associated production impacts of 200kt in the December quarter. FY22 guidance update on page 7 includes an assessment of COVID related impacts.

only				Quarter Ended				Year to Date
	Thousands of tonnes		Dec 2021 Dec 2020	Change				Dec 2021	Dec 2020	Change
	Managed ROM Coal Production			5,138	(37%)			8,398	9,622	(13%)
3,235
use		Managed Saleable Coal Production	3,024	3,949	(23%)			7,683	8,806	(13%)
	Managed Sales of Produced Coal	3,520	3,924	(10%)			7,740	9,537	(19%)
	Managed Sales of Purchased Coal	451	537	(16%)			877	955	(8%)
	Total Managed Coal Sales	3,971	4,461	(11%)			8,617	10,492	(18%)
	Managed Coal Stocks at period end	2,148	2,276	(6%)			2,148	2,276	(6%)
	Whitehaven Equity Production, Sales and Stock Volumes
personal
		Quarter Ended					Year to Date
Thousands of tonnes		Dec 2021	Dec 2020	Change				Dec 2021	Dec 2020	Change
Equity ROM Coal Production		4,105	(36%)				6,728	7,727	(13%)
	2,643
Equity Saleable Coal Production		2,438	3,221	(24%)				6,181	7,161	(14%)
Equity Sales of Produced Coal		2,862	3,198	(10%)				6,287	7,775	(19%)
Equity Sales of Purchased Coal		451	537	(16%)				877	935	(6%)
Total Equity Coal Sales		3,313	3,736	(11%)				7,165	8,710	(18%)
Equity Coal Stocks at period end		1,741	1,855	(6%)				1,741	1,855	(6%)
Maules Creek Open Cut Mine
Whitehaven 75%
		Quarter Ended				Year to Date
Thousands of tonnes - Managed		Dec 2021	Dec 2020	Change				Dec 2021	Dec 2020	Change
For
ROM Coal Production		3,251	(39%)		4,935	5,218	(5%)
1,996
Saleable Coal Production	1,786	2,094	(15%)		4,224	4,299	(2%)
Sales of Produced Coal	1,804	2,160	(16%)		4,332	4,606	(6%)
Coal Stocks at period end	1,339	1,248	7%		1,339	1,248	7%
Maules Creek delivered ROM production of 2.0Mt in the December quarter, 39% below pcp for the reasons outlined above.

December quarter saleable coal production of 1.8Mt was 15% below pcp, reflecting reduced processing days due to the loss of access to site.

Sales volumes for the quarter of 1.8Mt were 16% below pcp reflecting saleable coal volumes.

Equity metallurgical sales of semi-soft coking coal for the December quarter were 0.25Mt, representing 18% of Maules Creek sales volume.

Coal stocks for the end of the period were 1.3Mt, reflecting the draw down of ROM stock being offset by a build in product stock volumes due to slippage of sales caused by logistics issues. Refer to the Logistics update on page 6 for more details.

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Narrabri Underground Longwall Mine

Whitehaven 77.5%

only		Quarter Ended			Year to Date
Thousands of tonnes - Managed	Dec 2021	Dec 2020	Change		Dec 2021	Dec 2020	Change
ROM Coal Production		978	(58%)		1,940	2,624	(26%)
415
Saleable Coal Production	619	908	(32%)		1,981	2,537	(22%)
Sales of Produced Coal	1,004	926	8%		1,756	2,921	(40%)
Coal Stocks at period end	319	487	(34%)		319	487	(34%)

The longwall was relocated from panel 109 to 110 during the quarter and managed ROM production at Narrabri was 0.4Mt. Longwall production recommenced on 22 December. A tight labour market restricted the availability of contract labour to

usecomplete the longwall move necessitating redeployment of mine development labour. The step around from panel 110A to panel 110B is scheduled to commence in May 2022 and be completed in late June 2022.

Saleable coal production of 0.6Mt for the quarter was 32% below pcp, reflecting ROM production partially offset by the draw down of ROM stocks.

Managed sales volumes for the quarter of 1.0Mt were 8% above pcp. Sales were supported by the drawdown of stockpiles, which resulted in a 34% decrease in coal stocks of 0.3Mt when compared to pcp.

There were no equity metallurgical sales of PCI during the quarter, reflecting the mine plan. PCI sales will recommence in Q3 FY22 with mining of panel 110A.

The commencement of cut and flit mining of panels 201 and 202 is expected in late Q3 FY22 due to contractor and supplier labour shortages.

The next longwall move from panel 110 to 203 is scheduled for late Q3 FY23. Relocation of the longwall to panel 203 will see the return to mining in shallower ground, and is expected to bring improved production, improved productivity and lower unit costs.

Gunnedah Open Cut Mines

Whitehaven 100%

personal		Quarter Ended			Year to Date
Thousands of tonnes	Dec 2021	Dec 2020	Change		Dec 2021	Dec 2020	Change
ROM Coal Production		908	(9%)		1,523	1,779	(14%)
824
Saleable Coal Production	618	947	(35%)		1,478	1,970	(25%)
Sales of Produced Coal	712	838	(15%)		1,651	2,009	(18%)
Coal Stocks at period end	489	542	(10%)		489	542	(10%)
For
For the December quarter, Gunnedah open cut mines achieved managed ROM coal production of 0.8Mt. See below for
	production and sales details per mine.
	Tarrawonga Mine
	Whitehaven 100%
		Quarter Ended			Year to Date
	Thousands of tonnes	Dec 2021	Dec 2020	Change		Dec 2021	Dec 2020	Change
	ROM Coal Production		564	(2%)		1,054	(6%)
	551		990
	Saleable Coal Production	355	466	(24%)		801	967	(17%)
	Sales of Produced Coal	403	490	(18%)		883	1,063	(17%)
	Coal Stocks at period end	299	224	34%		299	224	34%

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Tarrawonga's December quarter ROM production of 0.6Mt was in line with pcp despite the impact of flooding and COVID.

Saleable coal production for the December quarter of 0.4Mt was down 24% on pcp. As previously mentioned, localised flooding restricted road access in the Gunnedah area. As a result, coal haulage between the mine and the coal handling and preparation plant (CHPP) in Gunnedah was restricted. Refer to the Logistics update on page 6 for more details.

	In response to the record price differences between 6000CV and lower grades of thermal coal, Whitehaven's marketing
	strategy has been to wash Tarrawonga ROM coal harder to produce higher quality coals that can be used to blend up lower
	grade coal. This strategy trades off lower yield and higher costs for improved coal quality to support increased blending
	opportunities within the group, to lift overall coal quality to maximise profit margins.
	Tarrawonga sales for the quarter of 0.4Mt were 18% below pcp due to the interruption of coal supply to the CHPP.
	There were 0.2Mt of equity metallurgical sales of semi-soft coking coal during the quarter.
	Coal stocks at the end of December were 0.3Mt, 34% above pcp reflecting an increase in ROM stocks at mine site due to
only
use	the previously mentioned impact of weather events on road access to CHPP.
Werris Creek Mine
Whitehaven 100%
		Quarter Ended		Year to Date
Thousands of tonnes		Dec 2021	Dec 2020	Change	Dec 2021	Dec 2020	Change
ROM Coal Production		273	344	(21%)		533	725	(26%)
personalFor
Saleable Coal Production		263	481	(45%)		677	1,003	(33%)
Sales of Produced Coal		310	348	(11%)		768	946	(19%)
Coal Stocks at period end		190	318	(40%)		190	318	(40%)

During the quarter, wet weather events interrupted operations. December quarter ROM production of 0.3Mt was 21% down on the pcp.

Werris Creek's ROM coal production is 100% bypass, which means the coal is crushed in preparation for transport and blending, but no washing of coal is undertaken. Saleable coal production for the quarter of 0.3Mt, 45% below pcp, reflects the current quarter ROM production profile and the pcp being supported by a drawdown of ROM stocks.

December quarter sales volumes of 0.3Mt, 11% down on pcp, reflect the saleable coal production profile supported by a stock drawdown. All sales for the quarter were thermal coal.

Coal stocks at the end of December were 0.2Mt, 40% below pcp, due to the draw down of stocks to support sales over the past two quarters.

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Equity Coal Sales and Realised Pricing on own coal sales

				Quarter Ended
only			Dec 2021	Sep 2021	Jun 2021	Mar 2021	Dec 2020
Total Equity Coal Sales	Mt	3.3	3.9	3.7	4.0	3.7
	Sales of purchased coal (thermal)	Mt	0.5	0.4	0.5	0.6	0.5
	Equity Own Coal Sales	Mt	2.9	3.4	3.2	3.4	3.2
	Coal sales mix (own coal sales)
	High CV thermal Coal	%	61%	65%	61%	53%	58%
	Other thermal coal	%	27%	23%	27%	27%	24%
	Metallurgical coal	%	12%	11%	12%	20%	18%
use	Pricing
gC NEWC Index	US$/t	184	168	109	89	67
JSM Quarterly (SSCC)	US$/t	218	149	93	92	87
	Price achieved (own coal sales)
	Average coal price 1	A$/t	211	189	122	101	86
	Thermal coal	US$/t	155	142	94	76	62
	Metallurgical coal	US$/t	201	134	103	92	77
	Premium/Discount (own coal sales):
personal	Thermal to gC NEWC Index	%	(16%)	(15%)	(14%)	(15%)	(8%)
Metallurgical to JSM Qtrly	%	(8%)	(10%)	10%	(0%)	(11%)

Note: Figures may not add due to rounding; 1 Before applicable royalties

Whitehaven achieved an average price of A$211/t1 for sales of own coal during the quarter, 144% higher than pcp.

The gC NEWC (6000 CV) index averaged US$184/t for the December quarter, up 10% from the September quarter average of US$168/t. The gC NEWC index price posted an all-time record high in October of US$222/t, falling to US$159/t in November before rebounding in December to US$170/t. The rebound was caused by a combination of strong Asia based end user demand and production constraints due to wet weather and flooding in the Hunter Valley and Gunnedah Basin. This is reflected in full year coal throughput from the Port of Newcastle of 157Mt, down 2Mt from 2020 and 9Mt from 2019. Strong ongoing demand for all fuel types has also continued to buoy the coal market. Even at record prices, coal remains a more attractive and less expensive alternative to LNG.

Whitehaven achieved a December quarter realised average thermal coal price of US$155/t, with the following factors impacting Whitehaven's pricing outcomes:

∙ Approximately 50% of Whitehaven's thermal coal book in the December quarter was priced in prior periods.

	Realised coal prices reflecting prior periods occurs under a number of scenarios. Firstly, some of the thermal coal
	contract book is priced on a lagging gC NEWC index basis such that realised prices lag the average gC NEWC
	index. The benefit of these rising prices will be seen in the coming quarters. Secondly, some sales have been
For	delayed from prior quarters as a result of weather events earlier in the calendar year. Thirdly, a number of fixed
price sales set in a prior period were fulfilled during the December quarter.
∙ Approximately 27% of thermal coal sales were priced with reference to sub gC NEWC 6000 CV pricing structures.
This was almost exclusively the higher ash Narrabri fault-affected coal, where price differentials between the gC
NEWC index and the API5 index have widened to average US$68/t in the quarter, a similar level to the September
quarter.

Equity coal sales for the December quarter, including purchased coal, were 3.3Mt, 11% below the pcp. Equity coal stocks at 31 December were slightly lower than pcp at 1.7Mt.

Sales volumes of Narrabri non-gC NEWC index coal product in the December quarter were similar to those in the September quarter. Some fixed price non-gC NEWC index coal product sales slipped from the December quarter into January. However, price realisations for Whitehaven's thermal coal are expected to return to above gC NEWC index in the second half of FY22.

Metallurgical coal represented 12% of sales for the December quarter. Spot demand for semi-soft coking coal has been limited.

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