Coal producers reap the benefits of energy crunch

The energy-market shockwaves from Russia’s invasion of Ukraine mean the world is only getting more dependent on thermal coal as an alternative to gas, says Gavin Wendt, Director of Mine Life Report. He says as demand expands and prices surge to all-time highs, it means blockbuster profits for coal producers. Today, Whitehaven revealed a FY net profit of $1.95B, up from a loss of $544 million just a year ago, a 459% jump. It comes on revenue of 4.92 billion dollars, a 216% lift on last year. Shareholders will be rewarded with a final dividend of 40 cents per share. On the outlook it points to the continuing impact of energy security on the price of the commodity and points to demand for its high quality coal as the world decarbonises. Gavin says to put things into perspective, surging coal prices have seen Glencore generate its biggest coal profit in its history and this is just in the first half of its financial year! Elsewhere, Gavin says the lithium pricing environment is highly supportive of record profits. Prices of lithium in China are close to a record high, as a power crisis impacts EV battery production in an already-tight market. This has seen Pilbara Minerals generate a strong, maiden full-year profit for the company. The company posted a 577% increase in revenue to A$1.2 billion, which underpinned EBITDA of $814.5 million.