Annual Report
2021
Contents
About us
Our strategy
FY21 in review
Chairman’s introduction
Managing Director and CEO’s introduction
Resources and Reserves
Directors’ Report
Operating and financial review
Remuneration Report
Financial Report
ASX additional information
Glossary
Corporate directory
1
2
3
4
5
6
8
18
30
53
110
112
113
This report includes forward-looking statements relating to future events and expectations.
While these statements reflect expectations at the date of this publication they are by their nature not certain and are subject to known and unknown risks.
Whitehaven makes no representation, assurance or guidance as to the accuracy or likelihood of fulfilling any such forward-looking statements (whether express
or implied) and, except as required by applicable regulations or law, Whitehaven does not undertake to publically update such forward-looking statements.
About us
Whitehaven Coal is proud to be the leading Australian producer of premium-quality
coal. We are the dominant player in Australia’s high-quality Gunnedah Coal Basin.
We help power developed and emerging economies in
Asia where there is strong and growing demand for our
product, particularly for use in high-efficiency, low-
emissions coal-fired power stations.
Australian Securities Exchange (ASX), we have
developed a growing reputation for excellence in project
delivery, safe operation, and targeted investment in the
local economy and community.
Our purpose as a company is to support and sustain
regional communities by exporting high-quality thermal
and metallurgical coal from Australia to the world. North
West NSW is the focus of our capital investment and
workforce presence.
We are proudly local, and around 75% of our
2,500-strong workforce lives in the local communities
around our mine sites. We believe in helping
communities grow, ensuring the benefits flowing from
our operations are seen and felt locally.
We operate four mines (three open cut and one large
underground mine) in the Gunnedah Coal Basin of
NSW. Our operating assets are complemented by two
high-quality, near-term development assets: Vickery,
near Gunnedah, and Winchester South, in Queensland’s
Bowen Basin. Over our more than 20-year history,
including 14 years as a publicly-listed entity on the
Learn more about our
Purpose, Vision and Principles at
whitehavencoal.com.au/our-business
Port of Abbot Point
Bowen
Mackay
Port of Hay Point
Moranbah
Winchester South Project
AUSTRALIA
QLD
Moranbah
NSW
Gunnedah
Sydney
QUEENSLAND
Blackwater
Rockhampton
Port of Gladstone
Gladstone
PACIFIC OCEAN
Narrabri Mine
Gunnedah CHPP
Narrabri
Boggabri
Gunnedah
Maules Creek Mine
Tarrawonga Mine
Vickery Extension Project
Tamworth
Gunnedah Coal Basin
Werris Creek Mine
Muswellbrook
Singleton
Gloucester
NEW SOUTH
WALES
Sydney
Newcastle
(PWCS and NCIG Coal Terminals)
Whitehaven Coal shipped
to premium Asian markets
50
km
100
0
Key:
Projects
Current operations
Railway
Whitehaven Coal Annual Report 2020 | 1
Our strategy
Our vision is to be the benchmark coal investment on the ASX.
Our strategy is to own and sustainably operate large, lower-cost mines producing
a mix of high-CV thermal coal and premium semi-soft coking coal, and to increase
our share of the growing market for these products in our region.
Our levers to achieve this strategy are focused on six areas
Premium products
for premium markets
Grow and improve our
portfolio of quality assets
We produce a premium coal thermal product – high-energy, low-ash,
low-sulphur – used in high-efficiency, low emissions (HELE) coal-
fired power stations. In addition, we are rebalancing our portfolio by
increasing our production volumes of metallurgical coal in response
to global demand.
As our smaller mines reach their end-of-life, we are transitioning towards
a portfolio of large scale, long-life assets to build greater efficiencies and
productivity gains. This transition is supported by Whitehaven having
one of the most robust mine development pipelines in Australia. Further
gains will be realised through our investment in technologically advanced
equipment for large-scale operations.
Recruit and
retain top talent
Disciplined deployment
of capital
Embed sustainability
in everything we do
Proactively manage
stakeholder expectations
We are committed to skills development and building
a high-performance culture.
In maintaining a high-quality, large scale, cost-efficient and long-life asset
base, we are able to manage fluctuations in the commodities price cycle.
We aim to remain lowly geared as this allows us to stay nimble.
In our decision making, we ask ourselves: Does this decision strengthen
our sustainability by (i) building a strong, long-life business, (ii) operating
responsibly, (iii) supporting regional growth?
We aim to have free-flowing and transparent lines of communications
with stakeholders.
Learn more about how our strategy
informs the way we create value in
a sustainable way on page 7 of our
2021 Sustainability Report
2 | Whitehaven Coal Annual Report 2020
FY21 in review
Financial headlines
For FY21 Whitehaven Coal reported a net loss after
tax (NLAT) before significant items of $87.3 million
compared to a net profit after tax (NPAT) of
$30.0 million in the prior corresponding period (pcp).
The key factor that contributed to the FY21 NLAT was
the decrease in the EBITDA margin on sales of produced
coal from $21/t in FY20 to $14/t in FY21. This was mainly
due to a $9/t decrease in average realised prices from
$104/t in FY20 to $95/t in FY21, principally driven by
the movement in the average AUD:USD exchange rate
(0.75 in FY21 vs 0.67 in FY20).
The company recognised significant expenses totalling
$650.0 million (FY20: nil). These relate to asset
impairments which were allocated to Narrabri due
predominantly to the reduction in JORC reserves,
Werris Creek due to revisions to its mine plan and
adopting conservative price assumptions which reflect
uncertainties in coal markets, and rail intangible assets
no longer expected to be utilised. This resulted in a net
loss after tax of $543.9 million.
Whitehaven’s stated dividend policy is 20% to 50% of
net profit after tax. As the company reported a net loss
after tax before significant items of $87.3m the Board
has not declared a dividend.
Operational headlines
Equity ROM coal production for FY21 was 16.5Mt,
in line with the pcp, with Maules Creek reporting
record production, Gunnedah open cut mines slightly
above FY20 and Narrabri underground longwall mine
production significantly down on FY20 as a result of
geological challenges encountered during the year.
Equity coal sales, including purchased coal, were
16.4Mt, 3% below FY20 due to a decrease in sales of
purchased coal.
Equity own metallurgical coal sales were 15% of the total
of FY21 sales of produced coal, below FY20 of 17%.
Sustainability headlines
For Whitehaven, sustainability is about how our
financial, physical and human capital combine to deliver
positive outcomes through our entire value chain to our
diverse stakeholders at home and abroad. We deliver
value to customers, our workforce, shareholders, local
communities and suppliers by developing and safely
and responsibly operating high-quality, cost-efficient,
long-life coal assets.
Whitehaven acknowledges that our operations and
consumption of coal generates greenhouse gas
emissions. In order to manage climate-related risks we
continue to assess our business against decarbonisation
pathways and disclose financial risks against the
Task Force on Climate-related Financial Disclosures
(TCFD) framework.
$1,557.0m
Revenue
$204.5m
Statutory EBITDA
Down 10% from
$1,721.6m in FY20
Down 33% from
$306.0m in FY20
$74/t
Unit cost
In line with FY20
unit costs of $75/t
$169.5m
Cash generated
from operations
Down 11% from
$189.9m in FY20
$87.3m
Net loss after
tax before
significant items
Compared to a
$30.0m profit
in FY20
$808.5m
Net debt as at
30 June 2021
Consolidated equity production and sales
16,476kt
ROM coal
production
In line with FY20
2,007kt
Sales of
purchased coal
Down 16% from
2,376kt in FY20
13,692kt
Saleable coal
production
Down 8% from
14,511kt in FY20
16,432kt
Total coal sales
Down 3% from
16,887kt in FY20
14,425kt
Sales of
produced coal
In line with FY20
2,704kt
Coal stocks
at period end
Down 12% from
3,074kt in FY20
Approx. 75%
of workforce based
in regional areas
$344.7m
spent with local
suppliers
5.86
TRIFR
$210.5m
wages paid
9%
of workforce
identifies as
Aboriginal and/
or Torres Strait
Islander
267ha
of land rehabilitated
Whitehaven Coal Annual Report 2020 | 3
Chairman’s
introduction
Against this backdrop, it has been great to see a range
of efficiency and organisational improvement initiatives
begin to bear fruit. This is especially true in relation to
our largest asset, Maules Creek, which achieved record
ROM production and demonstrated consistent and
predictable performance.
We have also seen increased rigour in regard to
safety and environmental compliance, supported
by an increasingly proactive working relationship
with various regulators. This year the Board has
approved an additional environmental metric to the
Executive Short-Term Incentive scheme, to ensure
remuneration outcomes are linked even more explicitly
to performance in this crucial area.
Responding to the challenge of climate change
continues to preoccupy governments and
policymakers globally.
Understandably, there is increasing interest from our
stakeholders about what role Whitehaven can play in a
lower carbon future. Since the release of the company’s
first Sustainability Report in FY19, management has
increased its investment in analysis and communication
in this space. The challenge of addressing climate
change is incredibly complex and changes to global
energy trends will occur over decades, not years. In
a more carbon-conscious world that will need more
energy to support growth, we see a role for high-
quality coal being used in tandem with advanced
generation technology to deliver improved emissions
outcomes. I encourage you to read more on our
perspectives in detail in the FY21 Sustainability Report,
and welcome your continued engagement with me,
my fellow Directors as well as the Executive team on
these matters.
Our perspective on the continuing demand for high-
quality coal in Asia underpin the investment thesis
behind our growth projects. Vickery and Winchester
South will see Whitehaven’s portfolio weighted more
strongly to the demand for metallurgical coal in South
and Southeast Asia. During the year both projects
continued to progress in line with the Board’s cautious
approach to capital allocation.
No dividends were declared in FY21 but historic
highs in coal prices foreshadow a return to dividend
paying status in the near future. I would like to take
this opportunity to thank all our shareholders for their
continued support and assure them of a future for their
company that is full of promise and potential.
The Hon. Mark Vaile, AO
Chairman
Dear shareholders,
This year presented a unique set of
challenges for our business as Australia
and other nations sought to navigate
the way out of the COVID-19 pandemic.
The world grappled with uncertainty about the pace
and nature of the post-COVID recovery. At times
markets were volatile, and this was especially true for
coal markets, which saw cyclical lows replaced by
near-record highs in the space of just 12 months.
In the second half of FY21, global industrial activity
started to pick up with a corresponding increase in
demand for our product. Pleasingly, this demand
has continued to intensify, while at the same time in
Australia we have been forced to implement tough new
measures to control the spread of COVID-19.
Since the start of the pandemic, our operations have
not recorded a single case of COVID-19. Among other
things, this is a reflection of the strict health and safety
protocols we have been observing at our site for nearly
two years now.
Our vigilance has supported continuity of operations
and helped us meet growing demand from our
customers in Asia. As a champion for regional Australia,
I am also incredibly proud of the major role we have
been able to play for our host communities, with
$344.7 million spent with local suppliers last year and
$210.5 million paid in wages to our predominantly
local workforce.
I want to commend Managing Director and CEO, Paul
Flynn, and the newly-configured management team
for their efforts in leading our people and our business
through these uniquely challenging circumstances.
4 | Whitehaven Coal Annual Report 2020
Managing Director and
CEO’s introduction
For FY21 we recorded underlying EBITDA of
$204.5 million, a decrease of 33% on the prior year,
reflecting the impact of a strengthening Australian
dollar and geological challenges at Narrabri affecting
production and coal quality. We recognised significant
pre-tax expenses totalling $650 million, relating to asset
impairments that primarily reflect optimisation plans
at our Narrabri and Werris Creek Mines. For FY21 we
reported a net loss after tax of $543.9 million.
As one of Whitehaven’s STRIVE principles, safety
means our people, workplaces and communities come
first. During FY21, our Gunnedah coal handling plant
and Rocglen site, now in the rehabilitation phase,
achieved recordable injury free records of 3,000 days.
Our Total Recordable Injury Frequency Rate (TRIFR)
at 30 June 2021 was 5.86. While this is an increase
compared to FY20, we continue to observe a decrease
in this metric across the longer term.
Our ongoing investment in people and systems in the
environmental performance and compliance areas
demonstrates the value we place on environmental
management and its relationship to our social licence
to operate. The integration of our Health, Safety &
Environment function, established in early FY21, is
already delivering positive outcomes around compliance
culture and adherence to clear systems and processes.
During FY21 we reached milestones on each of our
development projects. The Vickery Extension Project
received its state-based approval, while the Narrabri
Stage 3 Extension Project and the Winchester South
Project – our first development in Queensland –
are both progressing well through their respective
planning processes.
Looking ahead, our focus is on maintaining solid
production performance and optimising our coal
product offering to make the most of the incredibly
strong seaborne coal price environment. This will ensure
we can achieve our goal of retiring debt in the near term
and returning value to shareholders.
On behalf of management, I would like to thank our
workforce, suppliers and joint venture partners for
their contribution throughout the year, as well as the
Board of Directors for its guidance. I extend my thanks
to all shareholders for your ongoing support and
engagement, and look forward to a successful FY22.
Paul Flynn
Managing Director and CEO
Dear shareholders,
I am pleased to present
Whitehaven Coal’s
Annual Report for 2021.
FY21 was very much a year of highs and lows
both operationally and in terms of factors
outside our control. COVID-19 continued
to present challenges for coal markets
and at home. First and foremost, I want to
acknowledge the way in which our people
have navigated these challenges with great
resilience and flexibility, ensuring we kept our
operations ticking over and our workforce and
host communities safe.
Looking back over the last 12 months, coal
markets were as dynamic as they have ever
been. While we saw cyclical lows in pricing,
towards the end of the year coal prices
reached historic highs as the global economic
recovery picked up pace amid continuing
tightness in supply. During the cyclical lows
our operations maintained production,
ensuring our people had security of
employment and the company was not reliant
on government support.
Operationally, while we had our hands
full putting the more difficult geological
conditions at Narrabri behind us, we also saw
our largest mine, Maules Creek, achieve record
annual ROM production of 12.7Mt. This is a
clear indication of the operational discipline
and consistency we have been striving
to achieve.
Across the Group, our ROM production
of 20.6Mt was in line with the prior year.
Positively, while also contending with port
and logistics disruption, COVID-19 and other
challenges, we managed to contain costs
and chart our way through some difficult
market conditions. It was a great team effort
by our people.
Whitehaven Coal Annual Report 2020 | 5
Resources
and Reserves
Whitehaven Coal Limited – Coal Resources – August 2021
Tenement
Maules Creek
Open Cut*
Narrabri North
Underground**
Narrabri South
Underground**
Tarrawonga
Open Cut
Tarrawonga
Underground
Werris Creek
Open Cut
CL375 AUTH346
ML1701 ML1719
ML1609
EL6243
EL5967 ML1579
ML1685 ML1693
EL5967 ML1579
ML1685 ML1693
ML1563 ML1672
Rocglen Open Cut
ML1620
Rocglen
Underground
Vickery
Open Cut
Vickery
Underground
ML1620
CL316 EL4699 EL5831
EL7407 EL8224
ML1464 ML1471 ML1718
Winchester South
MDL 183
Gunnedah Open Cut
Gunnedah
Underground
ML1624 EL5183
CCL701
ML1624 EL5183
CCL701
Bonshaw Open Cut
EL6450 EL6587
Ferndale Open Cut
EL7430
Ferndale
Underground
Oaklands North
Open Cut
Pearl Creek
Open Cut***
EL7430
EL6861
EPC862
Measured
Resource
(A)
Indicated
Resource
(B)
Measured +
Indicated
(A + B)
Inferred
Resource
(C)
Competent
Person Report Date
359
132
144
34
10
6.5
2
-
230
-
175
7
2
-
103
-
110
-
174
150
169
18
15
0.7
3
3
165
95
533
282
313
52
25
7.2
6
3
395
95
44
-
8
13
14
-
0.2
1
110
135
490
665
435
47
138
4
135
-
54
140
4
238
-
89
24
7
134
73
260
370
580
15
15
33
1
2
2
3
3
3
3
3
2
2
4
3
3
3
3
3
3
3
Mar-21
Mar-21
Mar-21
Mar-21
Apr-14
Mar-21
Mar-19
Mar-15
Jul-15
Jul-15
Dec-20
Jun-14
Jun-14
Jun-14
Jan-13
Jan-13
Jun-14
Aug-20
Total Coal Resources
1315
1882
3197
1700
1. Darryl Stevenson, 2. Jorham Contrerasn, 3. Benjamin Thompson, 4. Troy Turner.
* Maules Creek Joint Venture - Whitehaven owns 75% share.
** Narrabri Joint Venture - Whitehaven owns 77.5% share.
*** Dingo Joint Venture - Whitehaven owns 70% share.
# The Coal Resources for active mining areas are current to the pit surface as at the report date.
6 | Whitehaven Coal Annual Report 2020
Whitehaven Coal Limited – Coal Reserves – August 2021
Tenement
Proved
Probable
Total
Proved
Probable
Total
Recoverable Reserves
Marketable Reserves
Competent
Person
320
120
440
290
100
390
Maules Creek
Open Cut*
CL375
AUTH346
Narrabri North
Underground**
Narrabri South
Underground**
ML1609
EL6243
Tarrawonga
Open Cut
EL5967 ML1579
ML1685 ML1693
Werris Creek
Open Cut
Vickery Open Cut
ML1563 ML1672
CL316 EL4699
EL7407
68
92
22
5.1
4
5
10
72
97
32
0.2
5.4
-
200
200
67
90
18
5.1
-
Winchester South
MDL 183
140
210
350
100
Rocglen Open Cut
ML1620
-
-
-
-
4
5
8
0.2
178
110
-
71
96
27
5.4
178
210
-
Report
Date
Mar-21
Mar-21
Mar-21
Mar-21
Mar-21
Mar-15
Dec-20
Note
1
2
2
1
1
1
1
1
TOTAL COAL RESERVES
647
549
1196
570
405
977
1. Doug Sillar, 2. Michael Barker.
* Maules Creek Joint Venture - Whitehaven owns 75% share. Recoverable Reserves for the Maules Creek open cut mine include approximately 40Mt of coal
located in an area identified in the mine’s project approvals as a vegetated buffer corridor between the mine and the neighbouring Boggabri mine. These
project approvals require a suitable alternate corridor to be approved prior to mining of the coal in this corridor. The company is progressing work on potential
alternatives to this corridor in conjunction with the owners of the Boggabri mine.
** Narrabri Joint Venture - Whitehaven owns 77.5% share.
# The Coal Reserves for active mining areas are current as at report date.
## Coal Reserves are quoted as a subset of Coal Resources.
### Marketable Reserves are based on geological modeling of the anticipated yield from Recoverable Reserves.
Note: Figures reported are rounded which may result in small tabulation errors.
Information in this report that relates to Coal Resources and Coal Reserves is based on and accurately reflects
reports prepared by the competent person named beside the respective information. Darryl Stevenson,
Jorham Contrerasn and Benjamin Thompson are all geologists with Whitehaven Coal. Troy Turner is a full time
employee of Xenith Consulting Pty Ltd. Doug Sillar is a full time employee of RPM Advisory Services Pty Ltd.
Michael Barker is a full time employee of Palaris Australia Ltd.
Named competent persons consent to the inclusion of material in the form and context in which it appears. All
competent persons named are Members of the Australasian Institute of Mining and Metallurgy and/or The Australian
Institute of Geoscientists. They have the relevant experience in relation to reporting on mineralisation to qualify as
competent persons as defined in the Australian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (The JORC Code, 2012 edition).
Whitehaven Coal Annual Report 2020 | 7
Directors’ Report
For the year ended 30 June 2021
The Directors present their report together with the consolidated financial report of
Whitehaven Coal Limited (‘the Company’ or ‘Whitehaven’), being the Company, its
subsidiaries and the Group’s interest in joint operations for the year ended 30 June
2021 and the auditor’s report thereon.
1. Principal activities
The principal activity of Whitehaven Coal Limited and its controlled entities (the ‘Group’) during the period was the
development and operation of coal mines in New South Wales and Queensland.
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during
the financial year that have not been noted in the review of operations.
2. Directors and Executives
2 (a) Directors
The Directors of the Company at any time during or since the end of the financial year are:
The Hon. Mark Vaile AO
Chairman
Non-Executive Director
Appointed: 3 May 2012
As Deputy Prime Minister of Australia and Leader of the National
Party from 2005 to 2007, Mark established an extensive network of
contacts throughout Australia and East Asia. His focus at home was
with regional Australia and particularly northern NSW. As one of
Australia's longest serving Trade Ministers from 1999 until 2006, Mark
led negotiations which resulted in Free Trade Agreements being
concluded with the United States of America, Singapore and
Thailand, as well as launching negotiations with China, Japan and
ASEAN.
Importantly, early in his ministerial career as the Minister for
Transport and Regional Services, Mark was instrumental in the
establishment of the ARTC, which operates the Hunter Valley rail
network.
Mark brings significant experience as a Company Director having
been Chairman of Aston Resources, CBD Energy Limited and
SmartTrans Limited, a former independent Director on the board of
Virgin Australia Holdings Limited and former Director Trustee of
HostPlus Superfund. Mark is currently a Director of ServCorp Limited,
which is listed on the ASX (since June 2011), Stamford Land Corp,
which is listed on the Singapore Stock Exchange, and Chairman of
Palisade Regional Infrastructure Fund.
Former ASX-listed directorships in the last three years:
Director, Virgin Australia Holdings Limited (September 2008 –
December 2018)
Whitehaven Coal Annual Report 2021 | 9
Directors’ Report
For the year ended 30 June 2021
2. Directors and Executives (cont.)
2 (a) Directors (cont.)
John Conde AO
BSc, BE (Electrical)
(Hons), MBA (Dist)
Deputy Chairman
Non-Executive Director
Appointed: 3 May 2007
Dr Julie Beeby
BSc (Hons I), PhD
(Physical Chemistry),
MBA, FAICD, FTSE
Non-Executive Director
Appointed: 17 July 2015
Paul Flynn
BComm, FCA
Managing Director
Appointed:
25 March 2013
Previously Non-Executive
Director
Appointed: 3 May 2012
John has over 30 years of broad based commercial experience
across a number of industries, including the energy sector, and was
Chairman of the company prior to the merger with Aston Resources.
John is Chairman of Cooper Energy Limited (since February 2013),
the Dexus Wholesale Property Fund and the McGrath Foundation, as
well as President of the Commonwealth Remuneration Tribunal. He
was Chairman of Bupa Australia and New Zealand, the Sydney
Symphony Orchestra, Ausgrid (formerly Energy Australia) and
Destination NSW. He was also formerly Chairman and Managing
Director of Broadcast Investment Holdings, as well as a Non-
Executive Director of BHP Billiton Limited, Excel Coal Limited and
Dexus Property Group.
Former ASX-listed directorships in the last three years: Director,
Dexus Property Group (April 2009 – September 2020)
Julie has more than 25 years’ experience in the minerals and
petroleum industries in Australia, including major Australian and US
resources companies, and as Chief Executive Officer of the ASX-
listed coal seam gas producer WestSide Corporation Ltd. Julie has
technical, operations and strategy expertise and has held senior and
executive positions in coal mining, mining services and coal seam
gas, after commencing her career in coal and mineral processing
research. Julie was formerly the Chairman of the Queensland
Electricity Transmission Corporation Limited, and Non-Executive
Director of Gloucester Coal Limited, OzMinerals Limited, CRC Mining,
Queensland Resources Council and Australian Coal Research.
Currently, Julie is a Non-Executive director of Tasmanian Networks
Pty Limited.
Former ASX-listed directorships in the last three years: Nil
Paul has extensive experience in the mining, infrastructure,
construction and energy sectors gained through 20 years as a
professional advisor at Ernst & Young. Paul was formerly Chief
Executive Officer and Managing Director of the Tinkler Group and
was instrumental in the merger of Whitehaven Coal with Aston
Resources. Paul joined the Board of Whitehaven on 3 May 2012 and
assumed the role of Managing Director and CEO on 27 March 2013.
Prior to joining the Tinkler Group, Paul was the managing partner of
Ernst & Young’s Sydney office and a member of its Oceania
executive team. As a partner for over eight years, Paul managed
many of the firm’s largest mining and energy clients across Australia,
Asia, South and North America. Paul has also fulfilled various
leadership roles with large corporations on secondment, including as
the CFO of a top 50 listed company.
Former ASX-listed directorships in the last three years: Nil
10 | Whitehaven Coal Annual Report 2021
Fiona Robertson
MA (Oxon), FAICD,
MAusIMM
Non-Executive Director
Appointed:
16 February 2018
Lindsay Ward
BAppSc (Hons I),
GradDip (Mgt), FAICD
Non-Executive Director
Appointed :
15 February 2019
Raymond Zage
BSc Finance
Non-Executive Director
Appointed:
27 August 2013
Fiona has a corporate finance background, with more than 20 years’
experience as CFO of ASX-listed emerging and mid-tier mining and
oil and gas companies, preceded by 14 years with Chase Manhattan
Bank in London, New York and Sydney in corporate banking, credit
risk management and mining finance roles. Previous Non-Executive
Directorships include ASX-listed oil and gas producer, Drillsearch
Energy Limited, where she chaired the Audit & Risk Committee and
Heron Resources Limited. Currently Fiona is a Non-Executive
Director of Bellevue Gold Limited and 29Metals Limited (since May
2021).
Former ASX-listed directorships in the last three years:
Heron Resources Limited (April 2015 – July 2020)
Lindsay has more than 30 years’ experience across industries
including mining, exploration, mineral processing, ports management,
rail haulage, power generation, gas transmission, transport and
logistics. Having started his career in the mining industry, Lindsay has
held a wide range of leadership and operational roles. He is currently
CEO of Palisade Integrated Management Services, which has nine
diverse infrastructure assets under management. Prior to this, he was
the Managing Director of Dart Mining, a Melbourne-based exploration
company, and a Non-Executive Director of Metro Mining Limited.
Lindsay also has extensive mining experience, having worked with
BHP Australia Coal (Bowen Basin – Queensland), Camberwell Coal
(Hunter Valley – NSW) and Yallourn Energy (Latrobe Valley –
Victoria) in various mine engineering and senior leadership roles,
including Mine Manager and General Manager. Lindsay is a Fellow of
the Australian Institute of Company Directors and is an experienced
Director of both listed and unlisted companies.
Former ASX-listed directorships in the last three years:
Director, Metro Mining Limited (October 2011 – February 2019)
Raymond is the founder and CEO of Tiga Investments Pte Ltd. He is
also senior advisor to Farallon Capital Management, L.L.C., one of the
largest alternative asset managers in the world, an independent Non-
Executive Director of Toshiba Corporation (listed on the Tokyo Stock
Exchange), a Non-Executive Director of PT Lippo Karawaci Tbk
(listed on the Indonesian Stock Exchange), and on the Board of
Commissioners of Indonesian company Gojek. Raymond has been
involved in investments throughout Asia in various industries,
including financial services, infrastructure, manufacturing, energy and
real estate. Previously, Raymond was the Managing Director and CEO
of Farallon Capital Asia, and prior to that he worked in the
investment banking division of Goldman, Sachs & Co. in Singapore,
New York and Los Angeles.
Former ASX-listed directorships in the last three years: Nil
Whitehaven Coal Annual Report 2021 | 11
Directors’ Report
For the year ended 30 June 2021
2. Directors and Executives (cont.)
2 (b) Senior Executives
Paul Flynn —
Managing Director and Chief
Executive Officer
Kevin Ball —
Chief Financial Officer
BComm, CA
Refer to details set out in section
2(a) Directors on page 10.
Appointed Chief Financial Officer of
Whitehaven Coal in October 2013,
Kevin Ball has over 25 years’
experience working in the mineral
and energy industry across coal, oil
and gas, and in complex consulting
practices.
A finance graduate of the University
of New South Wales, Kevin is a
Chartered Accountant, having spent
11 years with Ernst & Young at the
commencement of his career,
predominantly in EY’s natural
resources group. Kevin has a
graduate Diploma in Geoscience
(Mineral Economics) from Macquarie
University.
Timothy Burt —
General Counsel and
Company Secretary
B.Ec, LLB (Hons) LLM
Timothy joined Whitehaven as
General Counsel and Company
Secretary in July 2009. He has more
than 20 years' experience in legal,
secretarial and governance roles
across a range of industries for ASX-
listed companies. Prior to joining
Whitehaven, Timothy held senior
roles at the ASX-listed companies
Boral Limited, UGL Limited and
Australian National Industries
Limited. He holds a Master of Laws
from the University of Sydney.
12 | Whitehaven Coal Annual Report 2021
Daniel Cram —
Executive General Manager –
People and Culture
BComm, M IR
Ian Humphris —
Executive General Manager –
Operations
BE Mining (Hons)
Daniel joined Whitehaven in March
2021 and was appointed Executive
General Manager – People and
Culture in June 2021. Daniel has 25
years’ experience as a HR
professional, including more than a
decade leading large resourcing,
remuneration, workplace relations
and organisational culture functions
for a range of publicly-listed
companies. Most recently, Daniel ran
his own consultancy firm,
specialising in human resources,
employee relations and
remuneration strategy, mergers and
acquisitions and change
management. Prior to this, Daniel
spent over a decade in senior human
resources roles at AGL Energy
covering the industrial aspects of
that business, including its power
generation assets and coal mining
operations.
Appointed Executive General
Manager – Operations in April 2020,
Ian is a mining engineer with more
than 20 years’ experience in the
Australian resources sector, with a
diverse and deep background across
open cut and underground
operations. Ian was most recently
Vice President – Health, Safety and
Environment at Peabody Energy
Australia. Prior to this, he fulfilled a
broad range of senior roles covering
many aspects of Peabody Energy’s
business, including managing the
company’s open cut operations,
supply chain and infrastructure
assets. Ian began his career in
resources as a mining engineer in
various Queensland mines before
transferring to the New South Wales
coalfields and working in senior roles
for a number of mine owners and for
the mining services provider, Thiess.
Michael van Maanen —
Executive General Manager –
Corporate, Government and
Community Affairs
BA (Hons)
Michael has nearly 20 years’
experience across corporate
communications and public policy
roles in both the government and
private sectors. He was appointed
Executive General Manager –
Corporate, Government and
Community Affairs in May 2018. Prior
to joining Whitehaven, Michael was a
founding partner of Newgate
Communications and led the firm’s
mining and resources practice
group. Michael was previously a
ministerial advisor in the Howard
Government and worked in a range
of national security policy roles for
the Departments of the Prime
Minister and Cabinet, Foreign Affairs
and Trade and Defence.
Whitehaven Coal Annual Report 2021 | 13
Directors’ Report
For the year ended 30 June 2021
2. Directors and Executives (cont.)
2 (b) Senior Executives (cont.)
Jason Nunn —
Executive General Manager –
Marketing and Logistics
BEng (Hons), MEMB
Mark Stevens —
Executive General Manager –
Project Delivery
BSc (Hons), MSc, MBA
Sarah Withell —
Executive General Manager –
Health, Safety and Environment
BSc, MEngSc
Jason was appointed Executive
General Manager – Marketing and
Logistics in December 2020. Before
joining the marketing team at
Whitehaven Coal in 2014, Jason held
a range of roles in the resources
sector, primarily in the coal industry,
across research, production and
commercial functions at Yancoal,
White Energy and BHP Billiton in
Australia and the Netherlands. Jason
holds a Bachelor of Engineering
(Chemical) and Master of
Environmental Management and
Business from the University of
Newcastle.
Mark joined Whitehaven as
Executive General Manager – Project
Delivery in January 2020. Mark has
more than 30 years of Australian
and international experience in
project management and delivery
across infrastructure, coal, and oil
and gas. A qualified mining engineer,
Mark has successfully delivered
projects across all phases, from
concept to completion, with a
combined capital cost in the billions,
most recently for the Australian Rail
Track Corporation’s Inland Rail
project and prior to that, for Santos
GLNG.
Sarah joined Whitehaven as
Executive General Manager – Health,
Safety and Environment in July
2020. Sarah has more than 20 years’
experience in the mining and
resources sector with a proven track
record of delivering major mining
approvals, effective safety and
governance systems, and excellent
HSEC performance. Sarah has held
senior positions across open cut and
underground operations in both
NSW and Queensland. Most recently,
Sarah led the HSE function for BHP’s
NSW Energy Coal and BMC division,
and has also held roles at Coal &
Allied and Peabody.
14 | Whitehaven Coal Annual Report 2021
Scott Knights —
Executive General Manager –
Marketing and Logistics
BEcons (Hons)
Scott was appointed Executive
General Manager – Marketing and
Logistics in August 2014. Prior to
joining Whitehaven he was Vice
President – Sales, Marketing and
Logistics for Peabody Energy
Australia. Scott has over 25 years of
experience in a wide range of
commercial roles, including
marketing, sales, logistics,
management and business strategy
in the commodities sector. He has
worked for Peabody Energy, Rio
Tinto, PwC and Renison Goldfields
Consolidated.
Scott left Whitehaven in December
2020.
Leigh Martin —
Executive General Manager –
People and Culture
BA (Psych & Sociology), Grad Cert
HRM, MMgt Leadership, MSc (Psych)
Appointed Executive General
Manager – People and Culture in
January 2020, Leigh joined
Whitehaven from Broadspectrum,
where she managed capability and
culture across a complex workforce
of 14,000 on a range of major
projects and infrastructure assets.
Leigh has also held roles across HR,
talent and organisational
development both domestically and
internationally at UGL, BHP, Tabcorp
and the Queensland Government.
Leigh left Whitehaven in March 2021.
Whitehaven Coal Annual Report 2021 | 15
Directors’ Report
For the year ended 30 June 2021
2. Directors and Executives (cont.)
2 (c) Directors’ interests
The following table lists each Director’s relevant Company-issued shares and options, as notified by the Directors to the
Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001 (Cth), at the date of
this report.
Mark Vaile
John Conde
Julie Beeby
Paul Flynn1
Fiona Robertson
Lindsay Ward
Ray Zage
Ordinary shares
1,509,317
708,620
85,000
1,630,607
75,395
77,500
10,583,134
1111 Mr Flynn held 292,444 Company-issued options as at the date of this report.
2 (d) Directors’ meetings
The following are the number of Directors’ meetings (including meetings of committees of Directors) and the number of
meetings each Director attended during the financial year.
Director
Mark Vaile
John Conde
Julie Beeby
Paul Flynn
Fiona Robertson
Lindsay Ward
Ray Zage
Directors’
Meetings
Audit & Risk
Management
Committee
Meetings
Remuneration
Committee Meetings
Health, Safety,
Environment &
Community
Committee Meetings
Governance &
Nominations
Committee Meetings
A
14
14
14
14
14
14
14
B
14
14
14
14
14
14
14
A
6
6
-
-
6
-
-
B
6
6
-
-
6
-
-
A
7
7
-
-
-
7
-
B
7
7
-
-
-
7
-
A
-
-
4
-
4
4
-
B
-
-
4
-
4
4
-
A
1
1
1
-
-
-
-
B
1
1
1
-
-
-
-
A – Number of meetings held during the time the Director held office during the year.
B – Number of meetings the Director attended.
16 | Whitehaven Coal Annual Report 2021
3. Other
3 (a) Dividends
Paid during the year
There were no dividends paid to shareholders during the
year ended 30 June 2021 (2020: $312,197,000).
Declared after end of year
The Directors resolved not to pay a final dividend with
respect to the year ended 30 June 2021.
3 (b) Share options
Shares issued on exercise of options
During the reporting period no options were exercised.
Unissued shares under options
At the date of this report there were 830,531 unissued
ordinary shares of the Company under options. Refer to
note 5.5 of the financial statements for further details of
the options outstanding.
3 (c)
Indemnification and insurance of officers
Indemnification
The Company has agreed to indemnify, to the fullest
extent permitted by law, all current and former Directors
of the Company against liabilities that may arise from their
position as Directors of the Company and its controlled
entities. The agreement stipulates that the Company will
meet the full amount of any such liabilities, including costs
and expenses.
Insurance premiums
During the financial year the Company paid premiums in
respect of Directors’ and officers’ liability and legal
expenses insurance contracts. Such insurance contracts
insure persons who are or have been Directors or officers
of the Company or its controlled entities against certain
liabilities (subject to certain exclusions).
The Directors have not included details of the nature of
the liabilities covered or the amount of the premium paid
in respect of the Directors’ and officers’ liability and legal
expenses insurance contracts, as such disclosure is
prohibited under the terms of the contract.
3 (d)
Indemnification of auditors
To the extent permitted by law, the Company has agreed
to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims
by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst
& Young during or since the financial year.
3 (e) Rounding
The Company is of a kind referred to in ASIC Corporations
Instrument 2016/191 and dated 24 March 2016 and, in
accordance with that Class Order, all financial information
presented in Australian dollars has been rounded to the
nearest thousand unless otherwise stated.
Whitehaven Coal Annual Report 2021 | 17
Directors’ Report
For the year ended 30 June 2021
4. Operating and financial review
Financial headlines
− Net loss after tax before significant items of $87.3 million
− EBITDA of $204.5 million, a decrease of 33%
− Operating cash flows of $138.8 million, a decrease of 5%
− Net debt of $808.5 million at 30 June 2021
The following table summarises the key reconciling items between the Group’s EBITDA and its (loss)/profit before tax.
Whitehaven Coal Limited – Consolidated
Revenue
Net (loss)/profit after tax before significant items
Significant item – Impairment of assets after tax (refer to note 2.2 Significant items)
Net (loss)/profit after tax
EBITDA
Net interest expense (refer to note 5.2 Finance income and expense)
Other financial expenses
Depreciation and amortisation
Significant item – impairment of assets
(Loss)/profit before tax
Review of financial performance
Whitehaven delivered a strong safety performance with a
TRIFR of 5.86 at 30 June 2021, well below the NSW coal
mining average of 13.41.
In FY21, Whitehaven recognised significant expenses
totalling $650.0 million (FY20: nil). The significant
expenses relate to asset impairments which were
allocated to Narrabri due predominantly to the reduction
in JORC reserves, Werris Creek due to revisions to its mine
plan, adopting conservative price assumptions that reflect
uncertainties in coal markets, and rail intangible assets no
longer expected to be utilised. Refer to note 2.2 of the
financial statements for more information.
The FY21 net loss after tax (NLAT) before significant items
of $87.3 million compared to a net profit after tax (NPAT)
of $30.0 million in the prior corresponding period. The key
factors that contributed to the FY21 NLAT include:
− A decrease in the EBITDA margin on sales of produced
coal from $21/t in FY20 to $14/t in FY21
− An $9/t decrease in average realised prices from
$104/t in FY20 to $95/t in FY21 principally driven by
the movement in the average AUD:USD exchange
rate (0.75 vs 0.67 in FY20).
18 | Whitehaven Coal Annual Report 2021
FY21
FY20
$ million
$ million
1,557.0
1,721.6
(87.3)
(456.6)
(543.9)
204.5
(45.6)
(16.4)
(260.7)
(650.0)
(768.2)
30.0
-
30.0
306.0
(36.0)
(3.1)
(224.6)
-
42.3
− FOB unit costs of $74/t were below FY20 unit costs
of $75/t, with improved production performance and
lower unit costs at Maules Creek largely offset by
higher unit costs at Narrabri.
− Sales of produced coal of 14.4Mt were broadly in line
with the prior corresponding period but fell short of
expectations. This was a result of ROM production
performance during the year:
− Maules Creek equity ROM production increased by
18% from 8.0Mt in FY20 to 9.5Mt in FY21. The
increase reflects improvements in productivity as
labour turnover moderated, leading to an
improvement in overall skill levels. FY20 was
adversely impacted by dust and smoke haze events
which did not recur in FY21.
− The improvement at Maules Creek was offset by the
34% decline in equity ROM production at Narrabri
from 4.7Mt in FY20 to 3.1Mt in FY21. The decrease in
production was a result of encountering unplanned
faults and other geological challenges in longwall
panel 109 which slowed mining production rates and
caused damage to longwall and coal clearance
equipment.
− FY21 Gunnedah open cuts equity ROM production of
3.8Mt was largely in line with the 3.9Mt produced in
FY20.
− Sales volumes were also impacted by storm damage to
one of NCIG’s two shiploaders in November 2020. NCIG
operated at reduced capacity for the balance of the
year. Periods of high seas constrained vessel
movements in Q4 FY21, resulting in a higher than
normal number of loading delays across all coal
terminals.
− Depreciation and amortisation expenses increased by
$36.1 million to $260.7 million in FY21. The increase was
principally driven by depreciation associated with
capitalised major rebuilds on the excavator and haul
truck fleet.
− Financial expenses increased by $22.9 million from
$39.1 million in FY20 to $62.0 million in FY21. The
increase was primarily due to higher interest on the
senior bank debt facility due to a higher average drawn
balance during the year, and higher amortisation of
finance facility upfront costs due to the refinance of the
senior bank debt facility in the prior financial year.
− An income tax benefit of $224.3 million in FY21, in line
with the historical effective tax rate of approximately
30%.
Gross revenue decreased by $164.6 million to $1,557.0
million in FY21. The decrease was driven predominantly by
a decrease in average realised prices from $104/t in FY20
to $95/t in FY21. The key drivers of the decrease in
realised prices during the period are as follows:
− The AUD:USD exchange rate strengthened to an
average of 0.75 in FY21 from 0.67 in FY20.
− The Group realised an average price of US$68/t for its
thermal coal sales in FY21, a discount of US$11/t relative
to the gc NEWC index (FY20: realised average price of
US$66/t, a US$1/t premium to the gc NEWC index).
The discount to the gc NEWC index was driven by:
− The price realised by Whitehaven has lagged the
increase in the gc NEWC index, as a portion of
Whitehaven’s thermal coal sales are priced
referencing prior periods.
− While most thermal coal sales are priced with
reference to the gc NEWC index, there are portions
of thermal coal sales that are priced with reference
to non-gc NEWC 6000 CV pricing structures. Price
differentials between the gc NEWC index and the
API5 index widened significantly during the year.
Whitehaven was more exposed to this market in
FY21 as a result of fault-affected coal from the
Narrabri mine.
− The gc NEWC index price averaged US$79/t for
thermal coal in FY21, US$14/t above the average of
US$65/t in FY20:
− The COVID-19 related softening in coal prices in late
FY20 continued in the early part of FY21 with prices
reaching historical lows of US$49/t in August 2020.
Since that time coal prices have staged a strong
recovery with the gc NEWC index reaching US$132/t
in late June 2021. The recent increase in coal prices
reflects strong demand for high quality energy in a
supply constrained market.
− The Group realised an average price of US$85/t in FY21
for its sales of metallurgical coal products, down from
US$89/t in FY20. The realised price reflects a
combination of sales under quarterly benchmark linked
and index-based contract pricing structures.
− Equity own metallurgical coal sales were 15% of total
FY21 sales (FY20: 17%).
− Sales of produced coal of 14.4Mt were broadly
consistent with sales of 14.3Mt in FY20 (excluding
Sunnyside). This is in line with the equity ROM
production result.
FOB costs of $74/t in FY21 were largely in line with the
$75/t in FY20. Unit costs were impacted by the following
factors:
Maules Creek
− Equipment utilisation improved relative to FY20 as a
result of fewer production interruptions associated with
labour shortages and the dust and haze events that
adversely impacted the mine in FY20.
− Equipment productivity rates improved in FY21 due to
the commencement of in-pit dumping and the
consequent reduction in average haul distance and
elevation. Improving average skill levels, as a result of a
focus on training, also contributed.
Narrabri
− Geological challenges at Narrabri in Q2 FY21 which
continued for the remainder of FY21, resulting in
inconsistent production performance. This contributed
to increased unit costs:
− Lower recovery of fixed costs due to lower ROM
production.
− Incremental costs incurred as a result of the
geological challenges experienced during mining
panel 109, including repairs and maintenance on the
longwall.
Other
− Costs increased at Tarrawonga due to a strategy of
increased washing to increase the availability of high
CV coal to mitigate the coal quality impacts arising at
Narrabri and to minimise exposure to the low CV
market.
− A reduction in the $A cost of diesel used in production
and coal transportation.
Whitehaven Coal Annual Report 2021 | 19
Directors’ Report
For the year ended 30 June 2021
4. Operating and financial review (cont.)
Review of financial performance (cont.)
− Below expectation ROM production performance led
to:
− Under-utilised logistics costs as a result of ROM
Cash flows and capital management
production levels being below the Group’s installed
infrastructure capacity.
− Lower recovery rates of fixed overhead costs.
− Above run-rate demurrage costs.
Cash flow summary
Operating cash flows
Investing cash flows
Financing cash flows
Cash at the end of the period
Capital management
Net debt1
Undrawn syndicated facility
Gearing ratio1,2 (%)
FY21
FY20
$ million
$ million
138.8
(103.6)
(46.7)
95.2
146.4
(268.0)
108.8
106.8
30 June 2021
30 June 2020
808.5
312.0
23%
787.5
362.0
20%
1 Calculated in accordance with the senior facility covenant requirements and therefore excludes lease liabilities recognised under AASB 16 Leases of $88,987,000 (2020:
$130,313,000).
2 Net Debt/(Net Debt plus Equity).
Whitehaven holds a strong capital base to maintain
investor, creditor and debt market confidence and ensure
the business is well positioned to support attractive future
opportunities.
South, Narrabri Stage 3 and AHS) and payment of $16
million of deferred consideration in respect of the
acquisition of EDF’s interest in the Narrabri mine. Narrabri
mains development was minimised during the year.
Operating cash flows
Operating cash flows of $138.8 million decreased by $7.6
million or 5% relative to FY20. This was largely driven by
the decline in the EBITDA result, which was principally the
result of the decline in realised coal prices from A$104/t in
FY20 to A$95/t in FY21.
Operating cash flows were also impacted by expenditure
on rehabilitation activities at Rocglen and Sunnyside, and
the refund of corporate taxation. In addition, there were
timing-related impacts associated with investment in
Narrabri development, overburden in advance and
working capital.
Investing cash flows
Investing cash outflows during FY21 of $103.6m were
$164.4 million lower than the prior corresponding period
as the company focussed on a disciplined approach to
capital expenditure in a challenging coal price
environment.
Capital expenditure was limited to essential items and
focussed on sustaining capital at the existing operations
($34 million) and major overhauls at the open cut
operations ($27 million). There was aggregate expenditure
of $24 million on growth projects (Vickery, Winchester
20 | Whitehaven Coal Annual Report 2021
The reduction in investing cash outflows in FY21 was also
a result of one-off expenditure incurred in FY20, which
included the acquisition of the fleet to underpin the
expansion of Tarrawonga ($75.4 million), replacement of
hydraulic cylinders at Narrabri ($16.5 million), and security
of water supply ($19.3 million).
Throughout the cycle, Whitehaven has continued to
allocate sustaining capital to each of its mines to maintain
safe and productive operations.
Financing cash flows and capital management
Net cash used in financing activities during FY21 was $46.7
million, largely comprised of the following:
− Payment of lease liabilities ($82.7 million), partially
offset by
− Net proceeds from borrowings ($50.0 million).
Net debt at 30 June 2021 was $808.5 million, a minor
increase of $21.0 million from 30 June 2020, while gearing
of 23% was above gearing of 20% at 30 June 2020.
Available liquidity of $407.2 million at 30 June 2021 was
comprised of undrawn capacity of $312.0 million under the
senior bank facility at 30 June 2021 together with cash
balances of $95.2 million.
Review of operations
Safety
The TRIFR increased to 5.86 at the end of June 2021 from 4.13 at the end of June 2020. Our Gunnedah CHPP and
Rocglen operations both achieved recordable injury free records of 3,000 days during 2021. The Company is committed
to achieving zero harm to its people and the environment, and management is striving for better safety performance
across all operations.
Production, sales and coal stocks
Whitehaven share (000t)
ROM Coal Production
Saleable Coal Production
Sales of Produced Coal
Sales of Purchased Coal
Total Coal Sales
Coal Stocks at Year End
FY21
16,476
13,692
14,425
2,007
16,432
2,704
FY20
16,632
14,841
14,511
2,376
16,887
3,074
Movement
(1%)
(8%)
(1%)
(16%)
(3%)
(12%)
Note: The prior corresponding period in the above table includes saleable coal production and sales of produced coal from Sunnyside of 174kt and 232kt respectively.
Tonnages in the table above are presented on an equity basis. Production tables and associated commentary set out in the mine-by-mine analysis are presented on a
managed (100%) basis.
FY21 ROM coal production and sales volumes were in line with FY20, while saleable coal production was down. The key
features for the period include:
− Maules Creek delivering record production, the Gunnedah open cut mines were broadly in line with FY20 while
Narrabri was significantly below FY20.
− Saleable production was down on FY20 due to ROM coal production being weighted to the second half of the year.
− Sales of produced coal of 14.4Mt were in line with FY20 as the drawdown of stocks at the beginning of the year
supported sales. While sales volumes were in line with FY20, they were lower than expected due to the production
performance at Narrabri and port congestion linked to the NCIG coal loader outage. Further details of the outage are
included in the Infrastructure section.
− Equity coal stocks at 30 June 2021 were 2.7Mt, a 12% decrease compared to 30 June 2020 of 3.1Mt, reflecting the
drawdown of stock at Narrabri to support sales while managing production constraints as a result of geological
challenges.
Maules Creek
Ownership: Whitehaven 75% and Operator, ICRA MC Pty Ltd (an entity associated with Itochu Corporation) 15%,
J-Power Australia Pty Ltd 10%
Maules Creek 100% (000t)
ROM Coal Production
Saleable Coal Production
Sales of Produced Coal
Coal Stocks at Year End
FY21
12,664
9,340
9,606
2,316
FY20
10,726
8,190
7,906
1,976
Movement
18%
14%
22%
17%
Note: Tonnages in the above table are presented on a managed basis.
Maules Creek ROM production increased by 18% to 12.7Mt (FY20: 10.7Mt), an annual production record. During the year
the lower seams of the coal reserve were accessed and pit floor was reached. This has allowed for the commencement of
in-pit dumping of overburden.
Saleable coal production of 9.3Mt was 14% above the prior corresponding period, with managed sales of produced coal
of 9.6Mt, 22% above the prior corresponding period. This increase in saleable production and sales reflects the record
annual ROM production.
Whitehaven Coal Annual Report 2021 | 21
Directors’ Report
For the year ended 30 June 2021
4. Operating and financial review (cont.)
Review of operations (cont.)
Coal stocks of 2.3Mt at the end of the period were 17% above the prior corresponding period, reflecting the record annual
ROM production levels weighted to the second half and some of the designated June sales volumes being pushed into Q1
FY22.
Equity metallurgical sales of semi-soft coking coal were 1.0Mt, or 14%, of sales volume in FY21 (FY20: 1.1Mt, or 19%).
The development of the overburden autonomous haulage system (AHS) at Maules Creek is progressing. During FY21 one
AHS fleet was operating. Ultimately, the full implementation fleet of AHS for overburden movement is expected to
include 5 manned EX8000 excavators and up to 45 AHS EH5000 trucks.
Narrabri
Ownership: Whitehaven 77.5% and Operator, J-Power 7.5%, Upper Horn Investments Limited 7.5%,
Daewoo International Corporation and Korea Resources Corporation 7.5%
Narrabri Mine 100% (000t)
ROM Coal Production
Saleable Coal Production
Sales of Produced Coal
Coal Stocks at Year End
FY21
4,059
3,985
4,541
210
FY20
6,111
6,547
6,215
793
Movement
(34%)
(39%)
(27%)
(74%)
Note: Tonnages in the above table are presented on a managed basis.
Narrabri ROM production decreased by 34% to 4.1Mt (FY20: 6.1Mt). The decrease in ROM production was a result of
geological challenges in panel 109 first encountered in Q2 FY21, which resulted in reduced productivity and increased
out-of-seam coal dilution. With ongoing geological challenges and associated equipment damage, key components of
the longwall were required to be overhauled mid-panel which resulted in additional downtime.
FY21 saleable coal production of 4.0Mt was 39% below FY20, with sales of produced coal of 4.5Mt, 27% below FY20. The
decrease in saleable production and sales reflects reduced ROM production, with sales partially supported by the
drawdown of opening coal stocks. Coal stocks of 0.2Mt were down 74% relative to 30 June 2020.
The next longwall move from panel 109 to 110 is scheduled for Q2 FY22.
Gunnedah open cut mines
Ownership: Werris Creek Whitehaven 100%, Rocglen Whitehaven 100%, Tarrawonga Whitehaven 100%,
Sunnyside Whitehaven 100%
Open Cuts 100% (000t)
ROM Coal Production
Saleable Coal Production
Sales of Produced Coal
Coal Stocks at Year End
FY21
3,832
3,599
3,628
804
FY20
3,851
3,624
3,690
978
Movement
-
(1%)
(2%)
(18%)
Note: Tonnages in the above table include the discontinued Sunnyside and Rocglen mines that have both transitioned into rehabilitation.
Gunnedah open cut mines consist of Tarrawonga mine and Werris Creek mine. The combined ROM production of the two
mines for the year was 3.8Mt, which is in line with FY20. Saleable coal production of 3.6Mt and sales of produced coal of
3.6Mt were also in line with FY20 and reflect the consistent ROM production performance.
Coal stocks for the end of the period were 0.8mt, an 18% decrease relative to 30 June 2020, reflecting the sell down of
Werris Creek stocks in early FY21.
Rocglen and Sunnyside mines transitioned into rehabilitation in early FY20. Rehabilitation at these mines is on schedule.
22 | Whitehaven Coal Annual Report 2021
Development projects
Vickery
Ownership: Whitehaven 100%
Open cut and underground mining at Vickery was
previously undertaken by Rio Tinto between 1991 and
1998.
The Vickery Coal Project was approved in September 2014
to produce up to 4.5Mt ROM coal per annum. Works
necessary to maintain the current approval in good
standing have been completed and the existing approval
for the Vickery Coal Project will expire in September 2034.
The Vickery Extension Project seeks consent to increase
the approved Vickery Coal Project to operate an up to
10Mtpa open cut metallurgical and thermal coal mine, with
on-site processing and rail infrastructure. On 12 August
2020, the NSW Independent Planning Commission (IPC)
approved the project. The project is now being reviewed
by the Federal Department of Agriculture, Water and the
Environment (DAWE) for Environment Protection and
Biodiversity Conservation (EPBC) approval.
On 27 May 2021, the Federal Court dismissed an injunction
application seeking to restrain the Federal Environment
Minister from issuing the Project with an EPBC Act (Cth)
approval. The Court also found the Minister has a duty to
take reasonable care to avoid causing personal injury or
death to children ordinarily residing in Australia arising
from emissions of CO2 when making their determination
under the EPBC Act (Cth) in relation to the project. A
declaration to this effect was made by the Federal Court
on 8 July 2021.
The decision of the Federal Court does not prevent the
Minister from determining the project. The deadline for the
Minister’s decision has been extended to 30 August this
year, by which time we expect a determination.
There are broader potential implications of the judgement
for greenhouse gas-emitting projects as a precedent and,
with this is mind, we note the Minister has filed, on behalf
of the federal government, an appeal to the Full Federal
Court against the decision, which we welcome. We are
aware the government is seeking to have this appeal dealt
with on an expedited basis. The appeal proceedings do
not prevent the Minister from discharging her statutory
decision making role.
Winchester South
Ownership: Whitehaven 100%
The proposed Winchester South open cut metallurgical
coal mine is located in Queensland’s Bowen Basin. The
project continues to progress through the Queensland
Government’s Coordinated Project approval process. The
next step in this process is Public Notification of the draft
Environmental Impact Statement (EIS), expected to
commence shortly. This process allows for public
consultation and comment. Whitehaven continues to work
closely with its key stakeholders.
On 16 December 2020 Whitehaven Coal released its
maiden Reserves Statement for the project and an
associated update to the project’s Coal Resources in
accordance with the JORC Code (2012). The project
resources estimate was upgraded to 1,100Mt from 530Mt,
which includes 665Mt of measured and indicated
resources. The project maiden reserves estimate is 350Mt,
with marketable reserves of 210Mt.
Whitehaven has completed the pre-feasibility report and
the project will now move into the feasibility phase.
Narrabri Stage 3 Extension
Ownership: Whitehaven 77.5%
The project seeks to convert Narrabri’s adjacent
Exploration Licence into a Mining Lease and use the
existing portals, CHPP, rail loop and associated
infrastructure to extract, process and export high energy
thermal coal and Pulverised Coal Injection (PCI) coal
products using the longwall mining method. The project
involves extending the longwall panels planned for the
mining lease south of the current main roads into the
contiguous Narrabri South Exploration Licence area, to
extend the approved life of the mine to beyond 2040.
Whitehaven submitted the Stage 3 Extension Project
Environmental Impact Statement (EIS) to the NSW
Department of Planning, Industry and Environment (DPIE)
in November in 2020. The EIS was on public exhibition for
6 weeks and received 63 positive responses, 16 comments
and 3 negative responses. DPIE requested Whitehaven to
prepare a response to submission report to address the
outcomes of the public exhibition. Whitehaven submitted
this report on 31 May 2021 to DPIE and it was made public
on 2 June 2021. The next step will be with the DPIE to
prepare an Assessment Report.
Progress on design work for the CHPP, rail spur and other
site infrastructure continued.
Exploration
Draft management plans, including those required for
Secondary Approval such as water, noise, air quality,
cultural heritage and traffic management, continue to be
refined based on the conditions of approval handed down
by the IPC and will be further updated once conditions of
approval of EPBC have been received.
Whitehaven maintains several exploration and potential
development projects in Queensland and NSW. These are
early stage projects where activity and spend is
undertaken to keep the tenements in good standing.
Whitehaven Coal Annual Report 2021 | 23
Directors’ Report
For the year ended 30 June 2021
4. Operating and financial review (cont.)
Infrastructure
Rail track capacity
Whitehaven contracts its below rail capacity from the
Australian Rail Track Corporation (ARTC). Improved
operating efficiencies, including increased train running
speeds, have reduced operating costs throughout the year
and will provide low capital cost expansion options for
Whitehaven in the future.
Whitehaven continues to actively engage with the ARTC
on maintenance and operational tasks to ensure long-term
rail logistics costs are optimised.
Rail haulage capacity
Whitehaven has capacity within its two long-term rail
haulage contracts for all current NSW based mine
production plans, including the ramp up production profile
from the Vickery Extension Project. Efficiency projects
which commenced in conjunction with our rail haulage
operators and on our mine sites during FY21 have
provided cost benefits for Whitehaven and released
capacity for other producers to utilise.
Whitehaven has a pipeline of improvement projects with
our rail haulage providers that will be progressed through
FY22.
Port capacity
Whitehaven exports coal through the Port of Newcastle
using the two export terminal providers PWCS and NCIG.
In mid-November one of NCIG’s two shiploaders was
damaged as a result of a storm. Since the storm NCIG
operated at reduced capacity using one shiploader.
Prior to the storm, Whitehaven had ~23Mtpa capacity
(managed) across both export terminals. As NCIG
downgraded its capacity, Whitehaven was able to secure
all capacity requirements to meet shipments. NCIG and
Whitehaven maintain insurance policies that address
increased costs arising from the damage to the shiploader.
Whitehaven and NCIG are working with insurers to finalise
the claim.
A number of weather events throughout the second half
of the year adversely impacted port throughput and
increased vessel queues at the Port.
Queensland
Whitehaven continues to refine infrastructure and logistics
options for the Winchester South Project.
We will continue to work with the infrastructure owners in
Queensland to ensure an efficient logistics solution for the
project.
24 | Whitehaven Coal Annual Report 2021
Events subsequent to reporting date
In the interval between the end of the financial year and
the date of this report there has not arisen any item,
transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the Company, to
significantly affect the operations of the Group, the results
of those operations, or the state of affairs of the Group, in
future financial years, other than the following:
Subsequent to the end of the financial period, the Group
repaid $178 million of debt drawn under the senior bank
facility.
Outlook and likely developments
Thermal and Metallurgical Coal Outlook
Coal prices across both metallurgical and thermal
segments have increased significantly from the lows
experienced in mid-2020. The gc NEWC Index has more
than tripled from the low of US$49/t in August 2020, to
US$170/t for August 2021, while the API5 index is
approaching its all-time high at approximately US$97/t.
Spreads between gc NEWC and API5 indices have
exceeded the record high of ~US$65/t in August 2021.
Tendering from Asia-based customers remains active with
increasing interest by customers to secure coal for CY22.
Similarly the PLV HCC Index has more than doubled from
lows of US$101/t in December 2020, and lifted other
components of the metallurgical coal complex. Semi-soft
coking coal has recovered to US$152/t, however at this
level high CV thermal remains a more attractive option.
Availability of high CV thermal remains tight due to the
strong demand from end users and coal
producers/traders for coal blending with lower CV coal.
Strong China coal demand, supported by increased
economic activity and challenges in expanding domestic
China coal production, compounded by China’s ban on
Australian coal, have modified coal flows in the seaborne
market and elevated seaborne coal prices to record levels.
On the supply side, there have been numerous disruptions
recently. Indonesia has experienced heavy rainfall and
equipment availability issues impacting production.
Russian and South African exports have been impacted by
rail and other logistical issues while Colombia has faced
industrial action at Cerrejon in addition to the closure of
Prodeco. Wildfires have also interrupted supply out of
Canada and the USA and Australian supply has
experienced weather events and logistics issues such as
the outage of the NCIG shiploader.
All high quality, high CV thermal coal supply remains tight;
prices are forecast to remain strong through CY21, CY22
and CY23. There are indications that China may cut steel
production in the second half of CY21 which may cause
metallurgical coal prices to soften.
Risks relating to Whitehaven’s future prospects
Whitehaven operates in the coal sector. There are many
factors, both specific to Whitehaven and to the coal
industry in general, that may individually or in
combination, affect the future operating and financial
performance of the Group, its prospects and/or the value
of Whitehaven. Many of the circumstances giving rise to
these risks are beyond the control of Whitehaven’s
Directors and its management. The major risks believed to
be associated with investment in Whitehaven are as
follows.
Volatility in Coal Prices
The Company’s future financial performance will be
impacted by future coal prices. Factors which affect coal
prices include the outcome of future sales contract
negotiations, general economic activity, industrial
production levels, changes in foreign exchange rates,
changes in coal demand, changes in the supply of
seaborne coal, changes in international freight rates and
the cost of substitutes for coal. The Company does not
currently hedge against coal price volatility.
Foreign Currency Risk
As the Company’s sales are predominately denominated in
US dollars, adverse fluctuations in the USD:AUD exchange
rate may negatively impact the Group’s financial position.
The Company uses forward exchange contracts to hedge
some of this currency risk in accordance with a hedging
policy approved by the Board of Directors.
Acquisitions and Commercial Transactions
Acquisitions and commercial transactions undertaken with
the objective of growing the Company’s portfolio of assets
are subject to a number of risks which may impact the
ability to deliver anticipated value. Risks associated with
acquisitions include:
− Operational performance of acquired assets not
meeting expectations
− Anticipated synergies or cost savings delayed or not
achieved
− Adverse market reaction to proposed transactions
− The imposition of unfavourable or unforeseen
conditions, obligations or liabilities.
Whitehaven’s commercial processes are designed to
reduce the likelihood of these risks materialising as a result
of a commercial transaction.
Capital Requirement Risk
There is a risk that insufficient liquidity or the inability to
access funding on acceptable terms may impact ongoing
operations and growth opportunities.
Whitehaven manages liquidity risk by holding a prudent
level of available cash, maintaining adequate committed
credit facilities which have been provided by a diverse
panel of Australian and international banks, and
refinancing committed credit facilities well before they
become current liabilities.
Whitehaven had $407.2 million in liquidity (cash and
undrawn facilities) available as at 30 June 2021.
Capital Allocation and Development Risks
There is a risk that circumstances (including unforeseen
circumstances) may cause delays to project development,
exploration milestones or other operating factors,
resulting in the receipt of revenue at a date later than
expected. Additionally, the construction of new
projects/expansion by the Company may exceed the
currently envisaged timeframe or cost for a variety of
reasons outside of the control of the Company.
Missed opportunities to invest or a failure to effectively
allocate capital or achieve expected return from assets
may also lead to a failure to achieve expected commercial
objectives.
Operating Risks
The Company’s coal mining operations are subject to
operating risks that could impact the amount of coal
produced at its coal mines, delay coal deliveries or
increase the cost of mining for varying lengths of time.
Such difficulties include weather and natural disasters,
unexpected maintenance or technical problems, failure of
key equipment, higher than expected rehabilitation costs,
industrial action, labour shortages and higher than
expected labour costs.
Geological uncertainty is also an inherent operational risk
which could result in pit wall failures or rock falls, mine
collapse, cave-ins or other failures to mine infrastructure.
The Company has in place a framework for the
management of operational risks and a comprehensive
group insurance program which provides insurance
coverage for a number of these operating risks.
Water Security
Water is critical to Whitehaven’s mining operations as it is
used for various purposes, including dust suppression and
coal washing. Whitehaven’s ability to access water may be
impacted by a number of factors, including drought,
changes in government policy and regulation, and scarcity
of supply. The inability to access sufficient water may
Whitehaven Coal Annual Report 2021 | 25
Directors’ Report
For the year ended 30 June 2021
4. Operating and financial review (cont.)
Risks relating to Whitehaven’s future prospects (cont.)
negatively impact on Whitehaven’s costs, future
production and financial performance.
Whitehaven regularly monitors the water balance at each
of its sites and investigates opportunities to minimise
water usage and secure alternate, reliable water sources
to build resilience against water availability risks.
Infrastructure Risks
Coal produced from Whitehaven’s mining operations is
transported to customers by a combination of rail and
ship. A number of factors could disrupt these transport
services, including a failure of infrastructure providers to
increase capacity in order to meet future export
requirements.
Rail and port capacity is obtained predominantly through
long-term contract arrangements which include take-or-
pay provisions which require payments to be made
irrespective of whether the service is used. In the event
utilised capacity is below contracted capacity, there is a
risk Whitehaven will be required to pay take-or-pay
charges for capacity which is not used. Whitehaven seeks
to align these take-or-pay infrastructure obligations with
the Company’s forecasted future production.
Geology Risks
There are inherent risks associated with estimating Coal
Resources and Reserves, including subjective judgements
and determinations as to coal quality, geological
conditions, tonnage and strip ratio. The Company’s
Resource and Reserve estimates are determined by
suitably qualified competent persons in accordance with
the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC
Code).
Cyber Risk
Whitehaven’s operations are supported by a robust
information technology security framework and back-up
data infrastructure. However, computer viruses,
unauthorised access, cyber-attack and other similar
disruptions may threaten the security of information and
impact operational systems. The Company manages this
risk by continuing to invest in systems to prevent such
attacks and undertaking staff training programs.
Counterparty Risk
The Company deals with a number of counterparties,
including joint venture partners, suppliers and customers.
Counterparty risks include:
− Non-supply or changes to the quality of key inputs
which may impact costs and production at operations
26 | Whitehaven Coal Annual Report 2021
− Failure to reach agreement with joint venture partners
which could impact the Company’s ability to optimise
value from its projects
− Failure of customers to perform against long-term take-
or-pay agreements.
Counterparty risk is assessed prior to entry into any new
arrangements and, if necessary, appropriate risk control
mechanisms are put in place. Whitehaven proactively
engages with its counterparties to manage instances of
non-supply and quality control and to ensure alignment of
expectations.
Environment and Safety Risks and Licence to Operate
A range of health, safety and environmental risks exist
with coal mining activities. Accidents, environmental
incidents and real or perceived threats to the environment
or the amenity of local communities could result in a loss
of the Company’s social licence to operate, leading to
delays, disruption or the shutdown of operations. Potential
environmental and safety risks include equipment failure,
human errors in underground operations, vehicle and
mining equipment interactions in open cut operations, roof
fall hazards in underground operations and spontaneous
combustion risks.
The Company engages with a number of different
stakeholders in the communities within which it operates.
Stakeholder related risks include:
− The requirement to comply with the Native Title Act
1993 (Cth) which can delay the grant of mining
tenements and impact the timing of exploration,
development and production operations
− The ability to reach agreement with local landholders in
relation to acquisition and/or access terms which may
delay the timing of project development
− Notwithstanding the contributions made to the
communities within which the Company operates, local
communities may become dissatisfied with the impact
of operations or oppose new development projects.
There is also the possibility of anti-coal activism
targeted towards the Company’s projects.
Whitehaven has a comprehensive environmental, health
and safety management system to mitigate the risk of
incidents and to ensure compliance with environmental
and safety laws. The Company also has a dedicated
community relations team that engage with local
communities to ensure that community issues are
understood and addressed appropriately.
Further details in relation to how the Company engages
effectively with the communities in which we operate and
steps which the Company takes to maintain its social
licence to operate will be provided in the Company’s 2021
Sustainability Report to be released later this year.
Environmental Regulation
The coal sector is subject to a broad range of
environmental laws, regulations and standards, including
in relation to greenhouse gas emissions. Evolving
regulation and standards could result in increased costs,
regulatory action, litigation or, in extreme cases, threaten
the viability of an operation.
Whitehaven actively monitors legislative and regulatory
developments and engages appropriately with legislative
and regulatory bodies to manage this risk.
Climate change risk
The physical and non-physical impacts of climate change
are interlinked with multiple other risks and may affect the
Company’s assets, production and the markets where its
products are sold. These impacts may include severity and
frequency of weather patterns, policy and regulatory
change and coal demand responses. Further details in
relation to climate change risks will be provided in the
Company’s 2021 Sustainability Report.
The International Energy Agency (IEA) has outlined under
its Stated Policies Scenario (which assumes that all of the
Nationally Determined Commitments (NDCs) as provided
by countries after the 2015 Paris COP21 meeting are met in
full) that coal demand in Whitehaven’s key export market,
Asia, will remain stable until at least 2040. The IEA
regularly makes projections about world coal demand
based on various future scenarios for energy
development. The Stated Policies Scenario is the IEA’s
dominant scenario in its most recent World Energy
Outlook (2020). Alternate scenarios and further details are
available at: https://webstore.iea.org/world-energy-
outlook.
Covid-19 Risk
As with most businesses around the world, the COVID-19
pandemic has presented a range of health, commercial
and financial risks to Whitehaven. This includes risk to
continuity of operations, and potential disruptions to the
movement of goods and people. Since before the
pandemic emerged in Australia, we have been carefully
planning to ensure continuity of supply of inputs, and have
taken a range of steps – including direct advocacy to key
government and other stakeholders – to ensure our
workforce is ready to respond to the pandemic and is not
adversely impacted by domestic border restrictions,
limiting the operational impacts we have experienced.
Whitehaven, and the resources sector more broadly, has
so far demonstrated its resilience in the face of COVID-19.
It has been widely acknowledged that the comprehensive
suite of measures adopted across the resources sector
quickly became the model for others to emulate. The
development and rapid implementation of our response
plan kept our people safe and supported continuity of
production and employment. More broadly the experience
of responding to COVID-19 has validated the robustness
of our WHS systems and procedures and ensured our
preparedness to manage any future emerging risks of this
nature.
The exceptional circumstances stemming from the
pandemic have resulted in uncertainty surrounding public
health and the global economy, including impacts on
energy and industrial markets. Short-term demand for
both metallurgical and thermal coal contracted as a result
of measures employed in many countries to slow the
spread of the virus, however, demand has rebounded
significantly from the lows. Despite uncertainties
surrounding the economic outlook, the fundamentals of
our business model remain robust. Throughout the
pandemic, our portfolio of coal products has remained
sought after and well sold under long-term contracts to
the cornerstone high-energy, low-impurity coal markets of
Japan, Korea and Taiwan, as well as emerging markets in
developing Southeast Asian nations. In contrast, lower-
energy and/or higher-impurity coal basins globally have
traditionally been the first to exit the seaborne coal market
during times of declining demand, and this was borne out
during the first half of CY21. We expect our customer
nations to capitalise on their installed and planned coal-
fired power generation to underpin their economic
recoveries when the threat of the pandemic is either
eliminated or managed. Whitehaven actively monitors and
responds to all factors with potential to impact global
supply and demand for our products.
Whitehaven Coal Annual Report 2021 | 27
Directors’ Report
For the year ended 30 June 2021
5. Auditor independence and non-audit services
5 (a) Auditor’s independence declaration
The auditor’s independence declaration forms part of the Directors’ report for the financial year ended 30 June 2021. It is
set out on page 29.
5 (b) Non-audit services
During the year Ernst & Young, the Company’s auditor, did not perform any other services in addition to their statutory
duties.
The Board considered the non-audit services provided during the prior year by the auditor and, in accordance with
written advice provided by resolution of the Audit and Risk Management Committee, were satisfied that the provision of
those non-audit services by the auditor was compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001 (Cth) for the following reasons:
− All non-audit services were subject to the corporate governance procedures adopted by the Company and were
reviewed by the Audit & Risk Management Committee to ensure they did not impact the integrity and objectivity of
the auditor
− The non-audit services provided did not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision making capacity for the Company, acting as an advocate for the
Company or jointly sharing risks and rewards.
Details of the amounts paid or payable to the auditor of the Company, Ernst & Young, and their related practices for non-
audit services provided during the year are set out below:
In AUD
Non-audit services
Ernst & Young
Taxation compliance services
Other non-audit services
Consolidated
2021
Consolidated
2020
$
-
-
-
$
30,000
32,994
62,994
28 | Whitehaven Coal Annual Report 2021
Auditor’s independence declaration
Directors’ Report Remuneration Report
For the year ended 30 June 2021
Whitehaven Coal Annual Report 2021 | 29
2021 Remuneration Report
Directors’ Report
(Audited)
For the year ended 30 June 2021
Summary
On behalf of the Board, we are pleased to introduce
Whitehaven Coal’s Remuneration Report for the financial
year ended 30 June 2021 (FY21) for which we seek your
support at our Annual General Meeting (AGM) in October.
We have received consistently strong shareholder support
for our Remuneration Report; more than 97% of votes cast
at last year’s AGM were in favour of the resolution to
approve our 2020 Remuneration Report.
Our objective is to provide a Remuneration Report
containing the key elements that are important to our
shareholders and to present that information in a concise
manner. This includes details of realised remuneration
outcomes for our Key Management Personnel (KMP) for
FY21 and performance against the Short-Term Incentive
(STI) Key Performance Indicators (KPIs) and Long-Term
Incentive (LTI) performance conditions.
Our executive remuneration framework is designed to be
aligned to shareholder interests while operating to
incentivise and reward senior executives to execute our
strategy to build a portfolio of assets that is cost-
competitive, and to develop and operate that portfolio of
assets in a safe and sustainable way.
Whitehaven’s performance in FY21
FY21 was a mixed year for both the coal market and for
Whitehaven’s operations.
The single biggest influence on Whitehaven’s earnings for
the year was the exchange rate of the Australian dollar
against the US dollar. As global seaborne coal prices are
US dollar denominated the significant strengthening of the
Australian dollar compared to the previous year saw our
revenue decrease. This was partially offset by the coal
price recovery in Q2 FY21 from multi-year lows in early
2020, driven principally by the global economic recovery
from COVID-19. Australian high CV thermal coal seaborne
exports benefitted from supply disruptions in Colombia,
Australia and Indonesia.
At an operational level Whitehaven’s largest mine, Maules
Creek, reported record ROM production of 12.7Mt, while at
the Company’s underground mine, Narrabri, performance
was impacted significantly by unexpected geological
issues. At a Group level, managed ROM production of
20.6Mt was in line with the prior year.
These factors, along with the recovery of the Newcastle
6000CV coal price and the company’s strong sales and
marketing teams, resulted in a reported EBITDA of
$204.5m.
environmental management, costs and long-term
sustainability.
While the organisation faced a number of unforeseen
challenges during FY21, the fundamentals of the company
remain strong, as evidenced by the record annual
production at our largest mine, Maules Creek. We are well
placed to execute our long-term strategy and deliver key
long-term projects, which will impact shareholder value
positively.
Against this backdrop, FY21 remuneration outcomes are
detailed below:
− FY21 STI outcomes were assessed between 53.3% -
57.5% of the maximum possible award.
− LTI awards tested at 30 June 2021: Tranche 2 of the
2017 TSR award, Tranche 1 of the 2018 TSR Award and
2018 Costs Hurdle Award were assessed at the
conclusion of FY21. All these awards failed to achieve
gateway and therefore none vested, lapsing in full.
Further details of the FY21 STI and LTI awards that were
tested in 2021 are set out later in this report in sections 4.1
and 4.2 respectively.
Changes to remuneration framework for FY22
The Board continues to consider Executive KMP
remuneration in the context of our strategy, relevant
benchmarks and retaining and appropriately rewarding
our leadership team.
Following FY20, where the current Executive KMP
received no fixed remuneration adjustment, the
organisation commissioned an external salary
benchmarking exercise (through remuneration consultants
Mercer) to assess current KMP salaries against our
competitors in the mining and industrial sectors. As a
result of this review, the fixed remuneration for the
Executive General Manager (EGM) Operations, Ian
Humphris, will be increased to $700,000 (+7.7%), the
Managing Director and CEO, Paul Flynn, to 1,560,500
(+2.0%) and for the Chief Financial Officer (CFO), Kevin
Ball, to $728,000 (+2.0%). These increases ensure
Executive KMP salaries remain competitive.
There were several changes to the remuneration
framework in FY21, which received strong shareholder
support at our 2020 Annual General Meeting, as well as
personnel changes within the Executive KMP. There will be
no material changes to the STI and LTI structures
implemented in FY21.
Remuneration outcomes for FY21
Non-Executive Directors’ fees
As with other mining organisations, Whitehaven’s earnings
are heavily dependent on commodity (i.e. coal) prices. As
global seaborne coal prices and foreign exchange rates
are not in the control of Whitehaven management,
remuneration outcomes are assessed using a combination
of earnings outcomes and mining fundamentals:
production, overburden management, safety,
There was no increase to Non-Executive Director fees in
the year, nor is any proposed for FY22. There is no
proposal to change the maximum aggregate Directors’
fees pool.
We thank the Executive KMP and their teams for their
continued commitment and contribution to Whitehaven.
30 | Whitehaven Coal Annual Report 2021
Table of Remuneration
Report contents
1.
Introduction
1.1. Key Management Personnel for FY21
1.2. Summary of Company performance
1.3. How do remuneration outcomes align to FY21
performance?
1.4. Executive KMP realised remuneration
outcomes
2. Remuneration governance
3. Remuneration framework
3.1. Summary of Executive KMP remuneration
components in FY21
3.2. Fixed remuneration
3.3. STI awards and structure for FY21
3.4. LTI awards and structure for FY21
3.5. Policies and conditions of rights awarded
under equity plans
4. Remuneration outcomes for FY21
4.1. STI outcomes for Executive KMP in FY21
4.2. LTI outcomes for Executive KMP in FY21
5.
Executive KMP employment contracts
6. Non-Executive Director remuneration
6.1. Non-Executive Director fees
6.2. Current Non-Executive Directors’ remuneration
6.3. FY21 Non-Executive Director remuneration
7.
Executive KMP statutory tables and additional
disclosures
7.1. Executive KMP statutory remuneration table
7.2. Movement in options and rights held by
Executive KMP
7.3. Movement in ordinary shares held by KMP
7.4. Related party transactions and additional
disclosures
Whitehaven Coal Annual Report 2021 | 31
Directors’ Report Remuneration Report
For the year ended 30 June 2021
1. Introduction
This Remuneration Report forms part of the Directors’ Report.
In accordance with Section 308 (3C) of the Corporations Act 2001 (Cth), the external auditors, Ernst & Young, have
audited this Remuneration Report.
This report details the remuneration and fees during FY21 of the Key Management Personnel (KMP) of the Company, who
are listed in the table below. For the remainder of this Remuneration Report, the KMP are referred to as either Executive
KMP or Non-Executive Directors.
1.1. Key Management Personnel for FY21
The table below shows Non-Executive KMP during FY21.
Name
Role held during FY21
Committee positions held
Non-Executive Directors
The Hon. Mark Vaile AO
Chairman and Non-Executive Director
Chairman of Governance & Nomination Committee
Member of Audit & Risk Management Committee
Member of Remuneration Committee
John Conde AO
Deputy Chairman and Non-Executive Director
Chairman of Remuneration Committee
Dr Julie Beeby
Non-Executive Director
Member of Audit & Risk Management Committee
Member of Governance & Nomination Committee
Chairman of Health, Safety, Environment &
Community Committee
Member of Governance & Nomination Committee
Fiona Robertson
Non-Executive Director
Chairman of Audit & Risk Management Committee
Lindsay Ward
Non-Executive Director
Member of Health, Safety, Environment &
Community Committee
Member of Health, Safety, Environment &
Community Committee
Member of Remuneration Committee
Raymond Zage
Non-Executive Director
Nil
Whitehaven has reviewed which executives are KMP for the purposes of the Remuneration Report. It has been
determined that the KMP are the MD/CEO, the CFO and the EGM Operations. As a result, the EGM People and Culture,
EGM Corporate, Government and Community Affairs, EGM Project Delivery, EGM Marketing and Logistics, and the
General Counsel and Company Secretary ceased to be KMP as at 30 June 2020. This is a change from the FY20 Report.
No other executives were considered to carry the requisite authority and responsibility for planning, directing and
controlling the activities of Whitehaven to be KMP.
The table below shows Executive KMP during FY21:
Executive KMP
Paul Flynn
Kevin Ball
Ian Humphris
Role held during FY21
Dates
Managing Director and Chief Executive Officer (CEO)
Full year
Chief Financial Officer (CFO)
Executive General Manager (EGM) – Operations
Full year
Full year
32 | Whitehaven Coal Annual Report 2021
1.1. Summary of Company performance
Company performance for the last five years
A snapshot of key Company statutory performance for the past five financial years is set out below:
Revenue ($m)
Statutory EBITDA ($m)1
Net (loss)/profit after tax ($m)1
Share price at year end (dollars per share)
Basic EPS (cents per share)
Diluted EPS (cents per share)
Shareholder distributions paid (cents per share)
Total Reportable Injury Frequency Rate (TRIFR)
Environmental Enforcement Action Frequency Rate (EEAFR)3
Saleable production (Mt)
2021
1,557.0
204.5
(543.9)
$1.94
(54.6)
(54.6)
-
5.9
0.2
16.9
2020
1,721.6
306.0
30.0
$1.43
3.0
3.0
1.5
4.1
3.9
18.4
2019
2018
2,487.9
1,001.2
527.9
$3.66
53.5
52.4
47
6.2
1.9
19.8
2,257.4
1,002.2
524.5
$5.78
53.1
52.1
33
6.9
2.1
2017
1,773.2
714.2
405.4
$2.872
41.2
40.7
-
7.4
4.2
20.9
20.8
1
Statutory EBITDA and net profit after tax for FY18 has been restated for the adoption of AASB 16 Leases. Statutory EBITDA and net profit after tax for FY17 has not
been restated for the adoption of AASB 16 Leases.
2 The opening share price for 2017 was $1.08.
3 An Environmental Enforcement Action is defined as a warning letter, an official caution, an order, a penalty or a prosecution. Where a single piece of enforcement
correspondence notes a breach of more than one approval or licence condition, each breach is counted separately.
1.2. How do remuneration outcomes align to FY21 performance?
Component
Principles
Outcome
Fixed Remuneration
(TFR)
Total fixed remuneration set with
reference to market benchmarking and
individual performance
STI
LTI
Reflects the performance of
management during the performance
period, relative to performance
conditions set at the start of FY21
Reflects long-term overall Company
performance and the delivery of value
to shareholders over the performance
period
After having successfully navigated the economic impacts of COVID-19, the
KMP have ensured that the fundamentals of the organisation remain sound.
This is evidenced by record annual production at our largest mine, Maules
Creek, and approvals progressing in our key growth projects in Vickery,
Narrabri Stage 3 and Winchester South. This makes the organisation well
positioned for the future, especially with strengthening coal prices.
Following FY20, where the current Executive KMP received no fixed
remuneration adjustment, the organisation commissioned an external salary
benchmarking exercise through Mercer. As with many commodity based
organisations, Whitehaven’s share price (and consequently market
capitalisation) is highly dependent on the price of coal. Due to this, careful
consideration was given when selecting a benchmarking peer group to ensure
volatility in market capitalisation does not impact benchmarking outcomes. In
addition, Whitehaven is mindful of the difficulties of attracting top Executives
to coal mining organisations due to evolving ESG related concerns.
As an outcome of this exercise, the fixed remuneration for the EGM
Operations, Ian Humphris will be increased to $700,000 (+7.7%). There will be
no change to Mr Humphris incentives. Mr Humphris joined the organisation in
April 2020, and has demonstrated strong performance during this time.
Fixed remuneration increase for the MD & CEO and the CFO will be capped at
2.0%.
The Executive KMP STI outcomes were between 53.3% - 57.5% of the
maximum possible STI.
In relation to STI performance metrics: stretch STI outcomes were achieved
across environmental STI metrics, gateway outcomes in the case of financial
and production STI metrics, and no STI awarded for the safety metric.
See section 4.1 for more details on STI outcomes.
The LTI awards granted under the 2017 (TSR Tranche 2) and 2018 (TSR
Tranche 1 and Costs Hurdle Award) LTI plans reached the end of their
respective performance periods and were tested after 30 June 2021.
The LTI awards granted under the 2017 (TSR Tranche 2) and 2018 (TSR
Tranche 1) LTI plans failed to satisfy their respective performance conditions
and therefore lapsed in full. The Costs Hurdle Gateway and the Costs Hurdle
Target were set in 2018. Actual costs for FY21 of $74/t exceeded the Costs
Hurdle Gateway and the 2018 Costs Hurdle Award lapsed in full. See section
4.2 for more details on the LTI outcomes for FY21.
Whitehaven Coal Annual Report 2021 | 33
Directors’ Report Remuneration Report
For the year ended 30 June 2021
1. Introduction (cont.)
1.3. Executive KMP realised remuneration outcomes
As set out in section 1.3, the Remuneration Committee is of the view that while the Company and the Executive KMP have
had a challenging year with the continued impact of COVID-19 on the global economy and while there have been several
unforeseen issues that arose during the year, the Executive KMP have continued to execute successfully the Group’s
long-term strategy. The table below gives shareholders a better understanding of the actual remuneration outcomes for
Executive KMP in FY21. It includes:
− Fixed remuneration earned in FY21
− STI earned in respect of FY21 performance (including the cash component payable in September 2021 and the
deferred component awarded in equity, which may vest and become exercisable in later years)
− LTI that reached the end of its performance period in FY21, including the impact of share price growth between the
grant date and the test date
− Any non-monetary benefits provided to Executive KMP in FY21 (including fringe benefits).
While not in a form in accordance with accounting standards, the amounts disclosed in the table may be helpful for
shareholders, as they demonstrate the link between Company performance and remuneration outcomes for Executive
KMP for FY21, as summarised in section 1.3.
For further details on STI and LTI outcomes for FY21 refer to sections 4.1 and 4.2 respectively.
FY
TFR1
STI2
cash Severance
Total
cash
STI3
shares
LTI5
vested
at face
value
of
award Other6
FY21
deferred
equity
STI 4
Vested
LTI7
share
price
growth
Total
remuneration
Total including
share price growth
Name
Paul
Flynn
Kevin
Ball
2021
1,530,000 509,490
2020
1,530,000
-
2021
714,000
166,434
2020
714,000
-
Ian
Humphris
2021
650,000
163,637
20208
152,732
-
-
-
-
-
-
-
2,039,490
- 509,490
-
12,900
2,561,880
-
2,561,880
1,530,000 267,750
267,750 217,079
12,900
2,295,479
59,541
2,355,020
880,434
-
166,433
-
714,000
87,465
87,465
78,581
-
-
813,637
-
163,635
152,732
18,710
18,710
-
-
12,900
-
1,046,867
-
1,046,867
967,511
21,554
990,172
190,152
-
-
989,065
990,172
190,152
Note: for role held by Executive KMP during FY21 refer to section 1.1.
1 Total fixed remuneration (TFR) comprises base salary and superannuation.
2 STI represents the amount of cash STI that each Executive KMP will be paid in September 2021 based on FY21 performance. Refer to sections 3.3 and section 4.1 for
further details.
3 The Executive KMP received ordinary Whitehaven Coal Limited shares in lieu of the cash component of the FY20 STI entitlement.
4 Deferred equity STI refers to the amount of STI deferred into rights that are subject to further service conditions. The STI is expected to be issued at a volume weighted
average price (VWAP) of $1.96. It is expected that rights issued under the STI will vest and become exercisable in two equal tranches following the completion of FY22
and FY23. Refer to section 3.3 for further details.
5 LTI represents LTI awards made in 2017 and 2018 (FY20: 2016 and 2017) for which the test period ended during the financial year and which have vested. The amounts
shown are the face value of the awards at grant. Refer to section 4.2 for further details.
6 Other includes parking, motor vehicle benefits and other similar items.
7 LTI share price growth is the amount of the LTI award delivered by an increase between the face value VWAP used for the award that was granted and the VWAP of a
share at the award test date for those awards which vested. LTI outcomes are explained further in section 4.2 of this report.
Ian Humphris was appointed as an Executive KMP member on 6 April 2020.
8
34 | Whitehaven Coal Annual Report 2021
2. Remuneration governance
This section describes the roles and responsibilities of the Board, Remuneration Committee and external remuneration
advisers when making remuneration decisions. It also provides an overview of the principles and policies that underpin
the Company’s remuneration framework.
Remuneration governance framework
Remuneration principles
The following principles underpin the
Company’s remuneration framework:
− Remuneration is comparable and
competitive within our comparator
group in order to attract and retain
skilled executives.
− Short and long-term incentives
are aligned with the interests of
the Company and its shareholders.
− Structures are equitable and reinforce
relevant Company policies, such as
ensuring a focus on a safe working
environment for all employees and on
compliance with environmental approval
conditions.
− Reward outcomes are aligned with
performance with a significant portion of
pay deemed ‘at risk’ based on challenging
KPIs that are linked to the creation of
sustainable shareholder returns.
Board
The Board maintains overall responsibility for the remuneration policy and is responsible for
ensuring that the Company’s remuneration structures are equitable and aligned with the
long-term interests of the Company and its shareholders.
Remuneration Committee
The Board has established a Remuneration Committee, whose role is to:
− review and approve the remuneration of the Executive KMP
− review and approve the remuneration policies and practices for the Group generally,
including incentive plans and other benefits
− review and make recommendations to the Board regarding the remuneration of
Non-Executive Directors.
The Remuneration Committee has a formal charter, which sets out its roles and
responsibilities, composition structure and membership requirements. A copy of this charter
can be viewed on Whitehaven’s website.
Further information regarding the Remuneration Committee’s role, responsibilities and
membership is set out in the Company’s Corporate Governance Statement.
From time to time, the Remuneration Committee seeks and considers advice from external
advisors who are engaged by and report directly to the Remuneration Committee. Any
advice received from independent advisors is used as a guide and is not a substitute for
thorough consideration by the Committee.
During FY21 the Remuneration Committee engaged PwC as remuneration consultants to
provide assistance with the review and redesign of the company's Long-Term Incentive
(LTI) plan. No 'remuneration recommendations' as defined in the Corporations Act 2001
(Cth) were made or supplied by PwC.
In addition, the organisation commissioned Mercer as Remuneration Consultants to provide
salary benchmarking data for KMP roles. Mercer did not provide any remuneration
recommendations in relation to any KMP remuneration levels, as defined in the Corporations
Act 2001 (Cth).
No other remuneration recommendations were obtained during FY21 as defined under
the Corporations Act 2001 (Cth).
Whitehaven Coal Annual Report 2021 | 35
Directors’ Report Remuneration Report
For the year ended 30 June 2021
3. Remuneration framework
The Company’s Executive KMP remuneration framework is based on a set of core principles and comprises both fixed
and at-risk remuneration components. This section details the components of the Executive KMP remuneration
framework for FY21.
3.1. Summary of Executive KMP remuneration components in FY21
The table below summarises how the core remuneration principles and remuneration framework were applied during
FY21. The different components of Executive KMP remuneration mentioned below are described in greater detail in
sections 3.2, 3.3 and 3.4.
Attract and retain
skilled executives
Structures are equitable
and reinforce relevant
Company policies
Incentives are challenging
and linked to the
creation of sustainable
shareholder returns
Incentives are aligned with the
long-term interests of the
Company and its shareholders
−
includes salary
and superannuation
as cash
Cash
Equity
− 50% of STI is delivered
− 50% of STI is deferred
− provides the Remuneration
Committee with the flexibility
to determine the nature,
terms and conditions of
the grant each year
− operated in FY21 as an award
of 100% of performance rights
into rights to receive shares in
the Company subject to
meeting service-based
vesting conditions (with
vesting periods of 12 and 24
months)
− ability of the Remuneration
Committee to reduce the
number of deferred equity
instruments that vest if
subsequent events show
such a reduction to be
appropriate (clawback)
− the face value of the LTI
opportunity is currently set
between 80% and 120% of
TFR
− vesting is subject to three
independent performance
hurdles: Relative TSR, Costs
Target and Strategic
Objectives. The Strategic
Objectives hurdle also
requires a minimum level of
absolute TSR performance.
− reviewed annually
by the Remuneration
Committee
− determined based on a mix of
financial and non-financial
performance conditions
− benchmarked against
− STI opportunity is set
peer companies
between 70% and 100% of
TFR for target performance
and between 87.5% and 125%
of TFR for stretch
performance
− set based on individual
performance and experience
36 | Whitehaven Coal Annual Report 2021
Mix and timing of Executive KMP remuneration
Executive KMP remuneration is delivered as a mix of fixed and at-risk remuneration. At-risk remuneration can be earned
through STI and LTI. It is delivered to Executive KMP over multi-year timeframes to create a layered retention effect and
encourage sustained performance.
The graphs below illustrate the remuneration mix for Executive KMP for FY21 (assuming target performance for at-risk
components):
The diagram below shows the timing for determining and delivering Executive KMP remuneration for FY21::::
Whitehaven Coal Annual Report 2021 | 37
Directors’ Report Remuneration Report
For the year ended 30 June 2021
3. Remuneration framework (cont.)
3.1 Summary of Executive KMP remuneration
3.3. STI awards and structure for FY21
The organisation completed a review of the terms for the
STI plan for FY21. A number of changes were introduced
to drive the performance based remuneration philosophy,
and performance conditions were refined to drive
outcomes on key organisation metrics. Key changes
include:
•
•
•
Individual performance was removed as a
standalone KPI within the performance scorecard,
instead acting as an overlay to drive final STI
awards. Boundaries were developed whereby the
KMP may only achieve an STI award greater than
the formulaic scorecard outcome in cases of
exceptionally strong performance relative to their
individual performance goals, while lower than
expected performance results in a reduction in
STI award. Assessment of individual KMP
performance was completed by the Board and
Remuneration Committee at the conclusion of
FY21.
Introduction of the Environmental Critical Control
Verification (CCV) metric, which measures the
percentage of controls (i.e. specific initiatives
aimed at reinforcing environmental governance
and compliance) the organisation completed
during FY21. The controls are required to be
completed under the organisation’s
Environmental Risk Assessment. They are
reviewed and refreshed annually.
Introduction of the overburden metric to ensure a
sustainable balance is achieved between ROM
production (in the case of above ground mines)
and overburden removal.
components in FY21 (cont.)
Benchmarking total remuneration
While benchmarking is a useful starting point, it is only one
input the Board uses to determine total remuneration for
Executive KMP. Actual market positioning for each
individual is an outcome of multiple factors such as
internal relativities, experience, tenure in role, individual
performance and retention considerations.
Remuneration is benchmarked against an appropriate
market comparator group adopted by the Board. The
Board considers company size, complexity and business
challenges when it builds its remuneration comparator
group.
The market comparator group consists of Australian listed
companies, which have been identified as relevant
competitors of Whitehaven that operate in similar
business environments. As with many commodity-based
organisations, Whitehaven’s share price (and consequently
market capitalisation) is highly dependent on the price of
coal. Due to this, careful consideration is given when
selecting organisations against which the Executive KMP
are benchmarked, to ensure volatility in market
capitalisation does not impact benchmarking outcomes. In
addition, Whitehaven is mindful of the difficulties of
attracting top Executives to coal mining organisations due
to evolving ESG-related concerns. Current salaries for the
KMP are appropriate with reference to market
benchmarking and the broader economic climate.
The Board’s objective for executive remuneration is to
meet the market so as to attract and retain a leading
management team while observing appropriate restraint.
3.2. Fixed remuneration
Fixed remuneration received by Executive KMP is subject
to approval by the Remuneration Committee. Fixed
remuneration is comprised of base salary and
superannuation. In line with Company policy and
executives’ service agreements, remuneration levels are
reviewed annually having regard to market benchmarking
and individual performance.
Fixed remuneration will typically be positioned between
the 50th and 75th percentile of the market comparator
group adopted by the Board.
38 | Whitehaven Coal Annual Report 2021
The terms of the STI that applied during FY21 were as follows:
Feature
Description
Performance period
12 month performance period from 1 July 2020 to 30 June 2021
Form of delivery,
vesting and exercise
The STI for FY21 is delivered 50% in cash in September 2021 and 50% in deferred rights that are granted in or around
October 2021, which on exercise entitle the recipient to receive one ordinary share in the Company for each deferred
right that vests. Half of the deferred rights vest and become exercisable following completion of FY22, while the other
half will vest and become exercisable following the completion of FY23, subject to meeting service conditions. Vested
deferred rights that have not been exercised by August 2031 will automatically be exercised. No amount is payable on
vesting or exercise of deferred rights.
STI Opportunity
CEO: target 100% of TFR and stretch 125% of TFR
Other Executive KMP: target 70% of TFR and stretch 87.5% of TFR
Calculation of STI award The value of STI awards is calculated as follows.
Performance conditions
and KPI weighting
Whitehaven has chosen performance conditions that link to our strategy and motivate outperformance of annual
business plans. The Board set target KPIs at the commencement of FY21.
The table below summarises the KPIs that were adopted as performance conditions in FY21, and the applicable
weighting of each performance condition:
KPI
Safety (TRIFR)
Environmental Enforcement (EEAFR)
Environment Controls
Earnings Before Interest, Taxes, Depreciation and
Amortisation (EBITDA)
FOB cost per tonne (equity basis)
ROM production (managed basis)
Overburden (mbcm)
Executive KMP
20%
10%
10%
10%
25%
12.5%
12.5%
3.4. LTI awards and structure for FY21
As the organisation is exploring and progressing a number of key projects (e.g. Vickery, Narrabri Stage 3 extension and
Winchester South) that will directly impact long-term value, a review of the LTI plan was completed to ensure alignment
between long-term organisation goals and the LTI plan. As a result of the review, the following changes were made to the
LTI plan, which were approved in the 2020 Annual General Meeting:
•
TSR Award weighting reduced from 50% to 35%. There is a small number of pure coal organisations in the ASX
200, meaning there is limited ability for an industry-based peer group. Consequently, the peer group has been
broadened to compare against the S&P ASX 100, which better reflects our investor interests.
• Costs unchanged at 50% of the Award. The Board has set the entry point as the first quartile of Wood
MacKenzie data of Australian industry outcomes for comparable mines (i.e. haul distance adjusted) as the target
for LTI Costs Hurdle. This allows for the rail freight differential between Whitehaven and our peers due to the
location of Whitehaven mines. Consistent with prior years, the Board intends only to reward performance that is
consistent with shareholder expectations. The Board may, where it is appropriate to do so, recalibrate the LTI
Cost Hurdle to take account of structural changes in the Company's asset portfolio or other circumstances that
were not reasonably foreseeable at the time of grant, for example a strategic decision taken to produce higher
quality coal at higher cost in order to increase financial returns for shareholders.
Strategic Priority Delivery (SPD) Awards metric introduced for the FY21 LTI. The SPD Award has a performance
period of four years and represents 15% of the total LTI Award. The organisation is currently planning for a
number of key long-term projects that will directly impact shareholder value; this measure will drive a focus on
the efficient delivery of those projects. Objectives under the SPD Award are determined annually by the Board
and due to their commercially sensitive nature, will be disclosed retrospectively in the Remuneration Report in
the year of vesting.
•
Whitehaven Coal Annual Report 2021 | 39
Directors’ Report Remuneration Report
For the year ended 30 June 2021
3. Remuneration framework (cont.)
3.4 LTI awards and structure for FY21 (cont.)
To ensure the SPD Awards are linked to the broader shareholder experience, the organisation must achieve positive TSR
performance over the performance period, prior to any Board assessment of vesting outcomes for the SPD Awards.
These changes did not alter the total reward opportunity for Executive KMPs but rather reallocated the overall LTI
opportunity across three elements instead of two.
The terms of the LTI grant made during FY21 to Executive KMP were as follows:
Feature
Description
Form of delivery,
vesting and exercise
LTI Awards granted in FY21 were provided in the form of performance rights, being rights to receive one ordinary share in
the Company for each performance right that vests on meeting the relevant performance conditions. Vested deferred
rights that have not been exercised by October 2030 will automatically be exercised. No amount is payable on vesting or
exercising of deferred rights.
LTI Opportunity
CEO: 120% of TFR
Other Executive KMP: 80% of TFR
Performance period
TSR Awards (35%): divided into two equal tranches capable of vesting and becoming exercisable after three and four year
performance periods respectively, beginning on 1 July 2020.
Costs Hurdle Awards (50%): FOB cost per tonne achieved for the year ended 30 June 2023 with the Costs Hurdle Awards
being tested at that time. Half the awards will be capable of vesting and becoming exercisable after the end of the
performance period. The remaining half of any awards that vest will be subject to deferral for a further year before
becoming exercisable.
Strategic Priority Delivery Awards (15%): single tranche measured over a four year performance period, capable of
vesting following 30 June 2024.
Performance
conditions
Component
Details
Reason the performance condition was
chosen
TSR Award
Costs Hurdle
Award
Strategic
Priority
Delivery
Award
35% of the award is subject to a relative total
shareholder return (TSR) performance hurdle (TSR
Hurdle) which compares the TSR performance of the
Company with the TSR performance of a peer group of
companies operating in the S&P ASX 100 index.
This measure allows for an objective
external assessment of the shareholder
value created by the Company relative to
other large organisations over a sustained
period.
50% of the award is subject to the Company achieving
a cost per tonne target (Costs Hurdle Target) that will
position the company competitively on the then
current cost curve. The Board has set the entry point
as the first quartile of Wood MacKenzie data of
Australian industry outcomes for comparable mines
(i.e. haul distance adjusted) as the target for the Costs
Hurdle. A Costs Hurdle Gateway also applies to ensure
that a base level of cost control is achieved before any
of the Costs Hurdle Award is capable of vesting.
The Board intends only to reward performance that is
consistent with shareholder expectations. The Board
may, where it is appropriate to do so, recalibrate the
LTI Cost Hurdle to take account of structural changes
in the Company's asset portfolio or other
circumstances that were not reasonably foreseeable at
the time of grant, for example a strategic decision
taken to produce higher quality coal at higher cost in
order to increase financial returns for shareholders.
15% of the award is subject to company achievement
toward key strategic priorities, assessed by the Board.
This measure is aligned to the Company’s
objective to be positioned competitively
against Australian coal producers in relation
to costs of production when measured on
the then current coal industry cost curve.
Competitive costs protect and preserve
shareholder value in difficult times and
support enhanced returns when the
commodity cycle recovers.
The cost curve is normalised to account for
the northern location of Whitehaven’s
mines, which results in additional rail costs
for the organisation.
This measure is designed to align senior
employees to the efficient and effective
delivery of long-term projects that directly
impact shareholder value.
The additional ‘gateway’ test (of positive
TSR) will ensure any award is only
considered after growth is achieved in
shareholder value over the relevant
performance period.
40 | Whitehaven Coal Annual Report 2021
Calculation of
LTI award
The value of LTI awards and the number of performance rights granted is calculated as follows:
TSR Awards: the TSR of the Company for the FY21 LTI grant is measured as a percentile ranking compared to the
comparator group of listed entities in the S&P ASX 100 index over the relevant performance period of the tranche.
Costs Hurdle Awards: testing will occur following the completion of FY23 based on the average costs achieved on a
Company-wide basis over the 12 month period from 1 July 2022 to 30 June 2023.
Strategic Priority Delivery Awards: these will be assessed by the Board following conclusion of the four year performance
period (i.e. 30 June 2024).
Vesting schedule
TSR Awards
Performance level
Outcome as a % of target opportunity
75th percentile or above
100% of the TSR Awards will vest
Between 50th and 75th percentile
Vesting will occur on a pro rata straight line basis
between 50% and 100%
At 50th percentile
Below 50th percentile
50% of the TSR Awards will vest
0% TSR Awards will vest
Costs Hurdle Awards
The Board has set the entry point as the first quartile of Wood MacKenzie data of Australian industry outcomes for
comparable mines (i.e. haul distance adjusted) as the target for the Costs Hurdle. As evidenced during the past three years,
the Board will ensure that the Company does not overlook shareholder value enhancing opportunities even if these
opportunities are higher-cost mining operations. Notwithstanding the vesting schedule below, the Board retains discretion
to lapse any or all of the Costs Hurdle Awards if the Board considers that vesting would be inappropriate in light of the
intent and purpose of the target. Full vesting will occur only if the Board is satisfied performance meets or exceeds the
Costs Hurdle Target as set out below. The Costs Hurdle Awards will lapse in full if the Costs Hurdle Gateway is not
achieved. The Board may, where it is appropriate to do so, recalibrate the Gateway and Target to take account of
structural changes in the Company’s asset portfolio (such as mergers, acquisitions and divestments) or exceptional
circumstances that were not reasonably foreseeable at the time of grant, for example a strategic decision taken to produce
higher quality coal at higher cost in order to increase financial returns for shareholders.
Performance level
Target or lower
Between Gateway and Target
Gateway
Above Gateway
Strategic Priority Delivery Awards
Outcome as a % of target opportunity
100% of the Costs Hurdle Awards will vest
Vesting will occur on a pro rata straight line basis
between 50% and 100%
50% of the Costs Hurdle Awards will vest
0% Costs Hurdle Awards will vest
Subject to satisfaction of the performance gateway/underpin (i.e. achieving positive absolute TSR between FY20 and
FY24), following the end of the performance period, the Board will assess achievement in the delivery of, and progress
towards, key strategic priorities and determine the outcome of the Strategic Priority Delivery Rights. Due to the
commercially sensitive nature of the strategic priorities, retrospective disclosure of the outcomes against the performance
levels will be provided in the Remuneration Report for the year of vesting.
Retesting
Any component of the LTI award that does not vest following testing will lapse. There is no retesting of awards that do not
vest.
Whitehaven Coal Annual Report 2021 | 41
Directors’ Report Remuneration Report
For the year ended 30 June 2021
3. Remuneration framework (cont.)
3.5. Policies and conditions of rights awarded under equity plans
Malus and Clawback
Change of Control
The Board has discretion to reduce or clawback all vested
and unvested LTI and STI awards in certain circumstances
if subsequent events show a reduction to be appropriate.
The circumstances in which the Board may exercise this
discretion include: where an Executive KMP engages in
fraud, dishonesty or other misconduct, a material
misstatement of the Company’s financial statements or
other material error which results in vesting, or any other
factor that the Board deems justifiable.
In the event of a takeover bid or other transaction, event
or state of affairs that in the Board’s opinion is likely to
result in a change in control of the Company, the Board
has discretion to determine that vesting of some or all of
any unvested performance awards should be accelerated.
Cessation of Employment
Unless the Board determines otherwise, cessation of
employment by:
Dividend and Voting Rights
− Termination for cause: unvested performance awards
Rights carry no entitlement to voting or dividends prior to
exercise. Upon exercise of vested rights the recipient is
entitled to receive a dividend equivalent payment (DEP) in
respect of any prior period between the start of the
performance period and exercise. Any DEP made to
participants may be made in cash or provided as
additional fully paid ordinary shares in the Company, as
determined by the Board.
Prohibition on Hedging
Participants are required to comply with the Company’s
securities trading policy in respect of their performance
rights, options and any shares they receive upon exercise.
They are prohibited from hedging or otherwise protecting
the value of their performance rights and options.
will lapse.
− Resignation or by mutual agreement with the
Company: unvested performance awards will remain on
foot and be subject to the original performance hurdle.
However, the Board may at its discretion determine to
lapse any or all of the unvested performance awards
and ordinarily, in the case of a resignation, would be
expected to do so.
− Other circumstances: unvested performance awards
will remain on foot and be subject to the original
performance hurdle, with Board discretion to determine
that some of the performance awards (up to a pro rata
portion based on how much of the performance period
remains) will lapse. The performance awards that
remain on foot will be tested in the normal course
following the end of the relevant performance period.
42 | Whitehaven Coal Annual Report 2021
4. Remuneration outcomes for FY21
4.1. STI outcomes for Executive KMP in FY21
Before a financial year begins, the Board sets target KPIs that link to strategy and motivate outperformance of annual
business plans. At the end of the financial year, the CEO recommends to the Board the individual outcomes for each
Executive KMP. The Board then assesses and approves the overall STI outcomes for the CEO and Executive KMP. The
table below summarises details in relation to each KPI and the performance levels achieved in FY21.
Measure
Weighting
Gateway
Target Stretch
Paul Flynn
Kevin Ball
Ian Humphris
Percentage Outcome
Health, Safety and
Environment
Financial
Production
40%
35%
25%
25.0%
25.0%
25.0%
29.1%
12.5%
29.1%
12.5%
29.1%
12.5%
A summary of organisation performance against the individual STI KPIs is shown below:
Health, Safety and Environment
Measure
Commentary
TRIFR - #
A TRIFR of 5.9 was achieved over FY21. While this represents an increase from FY20, it is still well below the most
recent NSW Coal Industry average of 13.41 (2019-2020). FY21 TRIFR did not reach gateway and consequently no
STI was earned for this component. Work to improve safety standards and processes continues.
Environmental
Incidents - #
This includes events occurring in the FY21 year that have or are likely to result in enforcement action including
Warning, Caution, Clean-up Notice, Penalty Notice, Suspension, or Prosecution.
Environment performance has improved significantly, from 19 incidents in FY20 to 5 in FY21, resulting in stretch
performance. The Board continues to place strong emphasis on compliance and minimising environmental
incidents.
Outcome
5.9 - Below
Gateway
5 - Stretch
Environmental
Critical
Control
Verification
(CCV) - %
While environmental CCVs have been embedded and required to be completed in the organisation for a number of
years, it was introduced in the STI performance scorecard for the first time in FY21.
100% -
Stretch
The CCV process involves the undertaking of site specific risk assessments to identify required critical controls, the
development/assignment and completion of actions to address critical controls, and independent third-party
verification of action completion.
In FY21 100% of all FY21 actions were independently verified as being complete, resulting in stretch performance.
Financials
Measure
Commentary
EBITDA - $m Even though sales volumes were in line with the prior year, they were lower than expected due to the production
performance at Narrabri and port congestion linked to the NCIG coal loader outage. While costs were managed
tightly, these factors contributed to unit costs being higher than expected. The COVID-19 related softening in coal
prices in late FY20 continued into the early part of FY21 with prices reaching historical monthly lows of US$49.78/t
in August 2020. Since that time coal prices have staged a strong recovery with the gc NEWC index reaching
US$132/t in late June 2021. The increase in coal prices is a result of strong demand for high quality energy (LNG
and >6000kcal thermal coal) in a supply constrained market.
The price realised by Whitehaven has lagged the gc NEWC index, as a proportion of Whitehaven’s thermal coal
book is priced with reference to prior periods. The EBITDA outcome was between target and stretch. In addition,
the strengthening of the Australian dollar against the US dollar negatively impacted earnings as seaborne coal
prices are US dollar denominated.
Outcome
$204.5m -
Between
Target and
Stretch
FOB Costs –
A$/t
Group costs of $74/t were impacted by below expectation ROM production and sales volumes. This adversely
impacted the recovery of fixed costs in the business: labour, infrastructure and overheads. Costs were also
impacted by below target yields due to a strategy of increasing washing in order to increase the availability of
high-CV coal. This strategy was designed to mitigate the coal quality impacts arising at Narrabri and to minimise
exposure to the low CV market as pricing spreads increased between the high quality and low quality market
segments.
$74/t –
Between
Gateway
and Target
Costs were also impacted by incremental costs incurred directly as a result of mining through the faulted area at
Narrabri. Costs were otherwise managed tightly, resulting in an outcome between gateway and target.
Whitehaven Coal Annual Report 2021 | 43
Directors’ Report Remuneration Report
For the year ended 30 June 2021
4. Remuneration outcomes for FY21 (cont.)
4.1 STI outcomes for Executive KMP in FY21 (cont.)
Production
Measure
Commentary
Outcome
ROM – Mt
Each of Whitehaven's mines is assessed against individual mine production targets, which roll up into an overall
organisation-wide outcome.
20.6Mt -
Gateway
Our largest mine, Maules Creek, achieved record annual ROM production in FY21, while the other open cut mines
also had a strong year, achieving a cumulative outcome above gateway against their respective FY21 metrics.
These strong outcomes were however offset against lower ROM production from our Narrabri underground mine,
which achieved an outcome below its gateway. This was due to unexpected geological challenges experienced by
the mine, which resulted in delays managing these structures and the associated increase in longwall equipment
maintenance.
The overall FY21 ROM production was 20.6Mt, which was an outcome at gateway.
Overburden -
Mbcm
As with ROM production, overburden performance achieved a gateway outcome of 106.7Mbcm.
This outcome was as a result of lower than budgeted performance from the Autonomous Haulage System (AHS),
in addition to delays related to higher than expected weather and maintenance allowances.
106.7Mbcm -
Gateway
The individual STI outcomes for Executive KMP for FY21 are set out in the table below, taking into account Group-wide
metrics detailed above, and individual KMP performance. The total STI opportunity at target and stretch, by Executive
KMP, as a percentage of TFR is detailed in section 3.3.
Executive KMP
Paul Flynn
Kevin Ball
Ian Humphris
Paid as
cash
($)
509,490
166,434
163,637
Deferred
equity
($)
Total
($)
509,490
1,018,980
166,433
163,635
332,867
327,272
Percentage of
maximum STI received
Percentage of
maximum STI
forfeited
53.3%
53.3%
57.5%
46.7%
46.7%
42.5%
4.2. LTI outcomes for Executive KMP in FY21
For the TSR Award to vest in full, the TSR percentile ranking achieved over the relevant performance period relative to
the TSR performance of the comparator group would need to be at or above the 75th percentile. Between the 50th and
75th percentile ranking, vesting will occur on a pro rata straight line basis.
The table below sets out the LTI awards that were tested in 2021 against performance conditions and the results of the
relevant test. Additional information about the terms of these prior year LTI awards is available in the Remuneration
Report for the relevant financial years.
LTI year
2017
2018
2018
Performance
period
1 July 2017 –
30 June 2021
1 July 2018 –
30 June 2021
1 July 2020 –
30 June 2021
Tranche
Test type
Target
achieved Vesting outcome
Performance
2 of 2
TSR Award
1 of 2
TSR Award
75th percentile or
above
75th percentile or
above
19 in 22
19 in 21
n/a
Costs Hurdle
Award
$64/t
$74/t
0%
0%
0%
44 | Whitehaven Coal Annual Report 2021
Executive KMP LTI awards vesting in FY21
2017
Tranche
2 TSR
Hurdle
2018
Tranche
1 TSR
Hurdle
Performance Rights
Lapsed
Lapsed
n/a
Lapsed
Lapsed
n/a
2018
Costs
Hurdle
2017
Tranche 2 TSR
Hurdle
Vested LTI at
face value of
award1
Vested LTI
share price
appreciation1
LTI value
Lapsed
Lapsed
n/a
Options
Lapsed
Lapsed
n/a
$
-
-
-
$
-
-
-
$
-
-
-
30 June 2021
30 June 2021
30 June 2021
$2.85
$5.70
$5.70
$1.96
$1.96
$1.96
Executive
KMP
Paul Flynn
Kevin Ball
Ian Humphris
Award
Test Date
VWAP –
Face value
VWAP -
Award Test Date
1 As presented in section 1.4.
LTI awards granted in FY21
A summary of the LTI awards granted in FY21 (i.e. the face value and the fair value of the LTI granted to each
Executive KMP) is set out in the table below:
Executive KMP
Paul Flynn
Kevin Ball
Ian Humphris4
Number of performance
rights granted1
Face value of performance rights
grant2
Fair value of performance
rights at grant date3
1,200,000
373,334
419,7304
($)
1,836,000
571,200
642,186
($)
1,557,000
484,401
544,600
1 Refer to section 3.4 for the terms of the LTI grant.
2 The face value of the LTI performance rights of $1.53 was calculated using the volume weighted average price of Whitehaven shares over the 20 trading day period
commencing 10 trading days prior to 30 June 2020.
3 The fair value for awards granted to the Executive KMP is based on the average fair value of $1.30 (for the fair value of each tranche from which this average is derived –
see note 5.5) per performance right as at 4 December 2020, being the grant date. The factors and assumptions used in determining the fair value are set out in note 5.5
to the financial statements.
Ian Humphris LTI award calculated off his start date of 6 April 2020.
4
Whitehaven Coal Annual Report 2021 | 45
Directors’ Report Remuneration Report
For the year ended 30 June 2021
5. Executive KMP employment contracts
This section sets out an overview of key terms of employment for the Executive KMP, as provided in their
service agreements.
All Executive KMP contracts give the Company discretion to make payment in lieu of notice. No notice is required where
termination is for cause. The contracts do not provide for any termination payments other than payment in lieu of notice.
Treatment of unvested incentives is dealt with in accordance with the terms of grant. In general, under the STI and LTI
arrangements, unvested entitlements will be forfeited where an executive is terminated for cause or, subject to the
Board’s discretion, where they resign. In all other circumstances where the Board considers the executive to be a ‘good
leaver’, outgoing executives will generally retain their entitlements (subject to any applicable performance conditions in
the case of LTI arrangements).
Managing Director and CEO
Paul Flynn was appointed as Managing Director and CEO of the Company on 25 March 2013. This table outlines the key
terms of Mr Flynn’s contract of employment:
Fixed remuneration
Short-term incentive
Long-term incentive
Mr Flynn’s annual TFR for FY22 is $1,560,500 (FY21: $1,530,000). It includes salary, superannuation contributions,
any components under Whitehaven’s salary packaging guidelines and all Director fees. TFR is reviewed annually.
Mr Flynn is eligible to participate in the annual STI plan, as described in section 3.3. At target performance, his
FY22 STI opportunity is 100% of TFR (FY21: 100%), with up to 125% of TFR for stretch performance (FY21: 125%).
Mr Flynn is eligible to participate in the LTI plan as described in section 3.4, subject to receiving required
shareholder approval. Mr Flynn’s LTI grant in FY22 will be 120% of his TFR (FY21: 120%). The award will be
provided 100% as rights to acquire shares: each right held will entitle Mr Flynn to receive one ordinary share in
the Company subject to satisfaction of the relevant performance conditions. The FY21 award was provided in
the form of 100% rights.
Other key terms
Other key terms of Mr Flynn’s service agreement include the following:
− His employment is ongoing, subject to twelve months’ notice of termination by Whitehaven or six months’
notice of termination by Mr Flynn.
− The Company may terminate without notice in certain circumstances, including serious misconduct or
negligence in the performance of duties. Mr Flynn may terminate immediately in the case of fundamental
changes to his role (that is, there is a substantial diminution in his responsibilities), in which case his
entitlements will be the same as if the Company terminated him without cause.
− The consequences for unvested incentive awards on termination of Mr Flynn’s employment will be in
accordance with the Company’s STI and LTI plans.
− Mr Flynn will have post-employment restraints for a period of three months. No additional amounts will be
payable in respect of this restraint period.
Other Executive KMP contracts
A summary of the notice periods and key terms of the current Executive KMP contracts is set out in the table below. All
of the contracts below are of ongoing duration.
Name and position (at year-end)
Notice
Kevin Ball
Chief Financial Officer
Appointed 16 December 2013
Ian Humphris
Executive General Manager – Operations
Appointed 6 April 2020
3 months by employee
6 months by the Company
6 months by employee or the Company
46 | Whitehaven Coal Annual Report 2021
6. Non-Executive Director remuneration
This section explains the fees paid to Non-Executive Directors during FY21.
6.1. Non-Executive Director fees
Non-Executive Director fees are designed to ensure that the Company can attract and retain suitably qualified and
experienced Non-Executive Directors.
Non-Executive Directors do not receive shares or any performance-related incentives as part of their fees from the
Company. Although there is no formal minimum shareholding, Non-Executive Directors are encouraged to hold shares.
Non-Executive Directors are also reimbursed for travel and other expenses reasonably incurred when attending meetings
of the Board or in connection with the business of the Company.
The Remuneration Committee reviews and makes recommendations to the Board with respect to Non-Executive Director
fees and Committee fees.
In 2012 the shareholders approved a total aggregate maximum amount of Non-Executive Director fees of $2,500,000 per
annum. No change is being sought to the total aggregate Non-Executive Director fees pool for FY22.
6.2. Current Non-Executive Directors’ remuneration
The table below sets out Board and Committee members’ fees in Australian dollars for FY21.
There have been no changes to Non-Executive Director fees for FY21 and none are proposed for FY22.
Board
Audit & Risk Management Committee
Remuneration Committee
Governance & Nominations Committee
Health, Safety, Environment & Community Committee
Chairman
Deputy Chairman
$262,5001111
$375,0001111
$40,000 1111
$40,000 1111
1
No fee1
1 1
$40,000 1111
Member
$140,000
$20,000
$20,000
No fee
$20,000
1 The Chairman and Deputy Chairman of the Board do not receive committee member fees in addition to their Board fees.
The fees set out above exclude mandatory statutory superannuation contributions made on behalf of the
Non-Executive Directors.
Whitehaven Coal Annual Report 2021 | 47
Directors’ Report Remuneration Report
For the year ended 30 June 2021
6. Non-Executive Director remuneration (cont.)
6.3. FY21 Non-Executive Director remuneration
The statutory disclosures required under the Corporations Act 2001 (Cth) and in accordance with the Accounting
Standards are set out in the table below:
Non-Executive
Directors
The Hon. Mark
Vaile (Chairman)
John Conde
(Deputy Chairman)
Dr Julie Beeby
Fiona Robertson
Lindsay Ward
Raymond Zage
Total
FY
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Short-term
benefits
Post-employment
benefits
Board and
Committee fees
Non-monetary
benefits
Other benefits
(non-cash)
Superannuation
benefits
Total fees for
services as
a Non-Executive
Director
375,000
375,000
262,500
262,500
180,000
180,000
200,000
200,000
180,000
180,000
140,000
140,000
1,337,500
1,337,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,694
21,003
21,694
21,003
17,100
17,100
19,000
19,000
17,100
17,100
-
-
96,588
95,206
396,694
396,003
284,194
283,503
197,100
197,100
219,000
219,000
197,100
197,100
140,000
140,000
1,434,088
1,432,706
48 | Whitehaven Coal Annual Report 2021
7. Executive KMP statutory tables and additional disclosures
7.1. Executive KMP statutory remuneration table
The following table sets out the statutory remuneration disclosures required under the Corporations Act 2001 (Cth) and
has been prepared in accordance with the appropriate accounting standards:
Short-term
benefits
Post-employment
benefits
Share based
payments
Salary
& fees
Non-
monetary
benefits
Year
(A)
STI
(B)
Executive Directors
Paul Flynn
2021
1,505,000
12,900
943,741
2020
1,505,000
12,900
765,964
Other Executive KMP
Kevin Ball
2021
689,000
2020
689,000
-
-
305,116
236,772
Ian Humphris
2021
625,000
12,900
229,108
2020
141,656
-
18,710
Total
2021 2,819,000
25,800 1,477,965
2020
2,335,656
12,900
1,021,446
Superannuation
benefits
Termination
benefits
Rights and
options
Total
remuneration
Performance
related
(C)
-
-
-
-
-
-
-
-
965,864
3,452,505
649,185
2,958,049
304,214
1,323,330
216,503
1,167,275
103,514
995,522
-
173,823
1,373,592
5,771,357
865,688
4,299,147
%
55%
48%
46%
39%
33%
11%
25,000
25,000
25,000
25,000
25,000
13,457
75,000
63,457
(A) The amounts disclosed as non-monetary benefits relate to car spaces, motor vehicle benefits and other similar items.
(B) Comprises the cash component of current year STI (refer to sections 3.3 and 4.1 for details) and the fair value at each grant date of STI deferred rights expensed over
the relevant period for the service vesting conditions. The fair value for STI grants is based on the volume weighted average price of Whitehaven shares over the 20
trading day period commencing 10 trading days prior to 30 June of each respective grant.
(C) The fair value for LTI performance rights granted to KMP is based on the fair value at each grant date expensed over the vesting period. The FY20 amount includes the
reversal of AASB 2 share-based payments expenses due to lapse outcomes of Costs Hurdle LTI rights and options. The factors and assumptions used in determining the
fair value are set out in note 5.5 to the financial statements.
Whitehaven Coal Annual Report 2021 | 49
Directors’ Report Remuneration Report
For the year ended 30 June 2021
7. Executive KMP statutory tables and additional disclosures (cont.)
7.2. Movement in options and rights held by Executive KMP
The movement during the reporting period by number and value of equity instruments in the Company held by each
Executive KMP is detailed below:
Executive
KMP
Instrument
Paul
Flynn
Performance
Rights (LTI)
Kevin
Ball
Options
(LTI)
Deferred
Rights (STI)
Performance
Rights (LTI)
Options
(LTI)
Deferred
Rights (STI)
Balance
as at
1 July 2020
(number)
Granted
(number)
Granted
(value)
Vested/
awarded
during
the year
(number)
Exercised
(number)
Exercised
(value)
Lapsed
(number)
(A)
(B) $
(C) $
Balance
as at
30 June
2021
(number)
Vested and
exercisable
at 30 June
2021
Lapsed
(year of
grant)
(D)
Forfeited
(number)
1,330,082
1,200,000
1,557,000
89,702
229,426
520,107
227,984 2016/2017
- 2,072,672
-
1,241,869
-
-
292,444
-
-
752,838 2016/2017
642,637
175,000
267,750
137,685
560,828
1,828,611
-
-
389,517
373,334
484,401
32,472
32,472
71,438
82,528 2016/2017
449,546
-
-
105,862
-
-
272,521 2016/2017
66,997
57,167
87,465
42,348
42,348
191,837
-
-
-
-
-
-
-
489,031
292,444
256,809
647,851
-
-
177,025
105,862
81,816
419,730
12,229
-
-
-
-
-
-
-
-
-
Ian
Humphris
Performance
Rights (LTI)
Deferred
Rights (STI)
-
-
419,730
544,600
12,229
18,710
-
-
-
-
-
-
(A) The number of rights granted during FY21 includes:
(a) the FY20 LTI awards (further details are provided in section 4.2).
(b) the deferred rights component of the FY20 STI award, calculated by reference to the volume weighted average price of the Company’s shares for the 20 day
trading period commencing 10 trading days prior to 30 June 2020. The granting of rights occurred on 4 December 2020.
(B) The value of LTI performance rights granted in the year is the fair value of the performance rights at grant date.
The value of deferred STI rights granted in the year has been calculated using the volume weighted average price of the Company’s shares for the 20 day trading period
commencing 10 trading days prior to 30 June 2020 as fair value, being $1.53 per share.
Unvested LTI and STI awards have a minimum value of zero if they do not meet the relevant performance or service conditions.
The maximum value of unvested LTI and STI awards is the sale price of the Company’s shares at the date of vesting, or where applicable, on exercise (plus the value of
any dividend equivalent payment attaching to the award on vesting or, where applicable, on exercise).
(C) The 2016 LTI TSR Hurdle Tranche 2 Rights and Options were awarded during the year at a rate of 64.2%. The 2017 LTI Costs Target Hurdle and the 2017 LTI TSR Hurdle
Tranche 1 Rights and Options fully lapsed during the year due to the performance conditions not being met. The value of LTI performance rights exercised in the year is
the fair value of the performance rights at grant date.
Tranche 1 of the FY19 STI deferred rights vested during the period. The vested value of rights exercised has been calculated using the volume weighted average price of
the Company’s shares for the 20 day trading period commencing 10 trading days prior to 1 July 2019.
Tranche 2 of the FY18 STI deferred rights vested during the period. The vested value has been calculated using the volume weighted average price of the Company’s
shares for the 20 day trading period commencing 10 trading days prior to 1 July 2018.
(D) The year in which the lapsed performance rights, options or deferred shares were granted. Performance conditions were not met, and therefore 35.8% of the 2016 LTI
TSR Hurdle Tranche 2 Rights and Options, and 100% of the 2017 LTI Rights and Options Costs Target Hurdle and TSR Hurdle Tranche 1 awards lapsed.
50 | Whitehaven Coal Annual Report 2021
7.3. Movement in ordinary shares held by KMP
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or
beneficially by Executive KMP and each Non-Executive Director, including their related parties, is as follows:
Number of shares
Non-Executive Directors
Mark Vaile
John Conde
Dr Julie Beeby
Raymond Zage
Fiona Robertson
Lindsay Ward
Executive KMP
Paul Flynn
Kevin Ball
Ian Humphris
Held at
1 July 2020
Received on vesting and
exercise of STI/LTI
Received as
remuneration1
Other net
change
Held at
30 June 2021
1,509,317
708,620
65,000
9,200,000
45,985
35,000
1,282,535
740,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
1,383,134
29,410
42,500
951,229
82,126
-
281,843
92,069
19,695
(885,000)
(473,630)
-
1,509,317
708,620
85,000
10,583,134
75,395
77,500
1,630,607
440,565
19,695
1 The Executive KMP received ordinary Whitehaven Coal Limited shares in lieu of the cash component of the FY20 STI entitlement. Refer to table 1.4.
Whitehaven Coal Annual Report 2021 | 51
Directors’ Report Remuneration Report
For the year ended 30 June 2021
7. Executive KMP statutory tables and additional disclosures (cont.)
7.4. Related party transactions and additional disclosures
Loans with Executive KMP and Non-Executive Directors
There were no loans outstanding to Executive KMP or any Non-Executive Director or their related parties at any time in
the current or prior reporting periods.
Other KMP Transactions
Apart from the details disclosed in this report, no Executive KMP or Non-Executive Director or their related parties has
entered into a material contract with the consolidated entity since the end of the previous financial year and there were
no material contracts involving those people’s interests existing at year end.
Signed in accordance with a resolution of the Directors:
The Hon. Mark Vaile AO
Chairman
Paul Flynn
Managing Director
Sydney
26th August 2021
52 | Whitehaven Coal Annual Report 2021
Financial Report
For the year ended 30 June 2021
Whitehaven Coal Annual Report 2021 | 53
Notes to the consolidated financial statements
For the year ended 30 June 2021
Table of Contents
Consolidated financial statements
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent Auditor’s report
55
56
57
58
59
104
105
1. About this report
5. Capital structure and financing
Interest-bearing liabilities
5.1.
5.2. Finance income and expense
5.3. Financial risk management objectives and
policies
5.4. Share capital and reserves
5.5. Share-based payments
6. Group structure
6.1. Group’s subsidiaries
6.2. Interest in joint operations
6.3. Parent entity information
6.4. Deed of cross guarantee
6.5. Related parties
7. Other notes
7.1. Employee benefits
7.2. Auditor's Remuneration
7.3. Commitments
7.4. Contingencies
7.5. Subsequent events
1.1. Reporting entity
1.2. Basis of preparation
1.3. Significant accounting judgements,
estimates and assumptions
1.4. Summary of other significant accounting
policies
1.5. New standards, interpretations and
amendments adopted by the Group
2. Group performance
2.1. Segment reporting
2.2. Significant items
2.3. Taxes
2.4. Earnings per share
3. Working capital and cash flows
3.1. Trade and other receivables
3.2. Inventories
3.3. Trade and other payables
3.4. Reconciliation of cash flows from operating
activities
4. Resource assets and liabilities
4.1. Property, plant and equipment
4.2. Exploration and evaluation
4.3. Intangible assets
4.4. Provisions
54 | Whitehaven Coal Annual Report 2021
Consolidated statement
of comprehensive income
For the year ended 30 June 2021
Revenue
Other income
Operating expenses
Coal purchases
Selling and distribution expenses
Royalties
Depreciation and amortisation
Impairment losses
Administrative expenses
Share-based payments expense
Foreign exchange loss
(Loss)/profit before net financial expense
Finance income
Finance expense
Net finance expense
(Loss)/profit before tax
Income tax benefit/(expense)
Net (loss)/profit for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net movement on cash flow hedges
Income tax effect
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive (loss)/income for the period, net of tax
Earnings per share
Basic (loss)/earnings per share (cents per share)
Diluted (loss)/earnings per share (cents per share)
Note
2.1
2021
$’000
2020
$’000
1,556,976
1,721,609
6,836
3,495
(700,433)
(695,621)
(173,683)
(220,658)
(330,924)
(342,084)
(108,789)
(121,215)
(260,662)
(224,583)
2.2
(650,000)
-
(34,228)
(29,810)
5.5(a)
(6,995)
(4,279)
(706,181)
(6,259)
(3,494)
81,380
228
957
(62,242)
(40,007)
5.2
(62,014)
(39,050)
(768,195)
42,330
2.3(a)
224,281
(543,914)
(12,294)
30,036
5.2
2.3(b)
(15,146)
4,544
5.2
(10,602)
(554,516)
10,289
(3,087)
7,202
37,238
2.4
2.4
(54.6)
((((54.654.654.654.6))))
3.0
3.0
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the consolidated
financial statements.
Whitehaven Coal Annual Report 2021 | 55
Consolidated statement
Notes to the consolidated financial statements
of financial position
For the year ended 30 June 2021
As at 30 June 2021
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Derivatives
Total current assets
Trade and other receivables
Investments
Property, plant and equipment
Exploration and evaluation assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Interest-bearing liabilities
Employee benefits
Provisions
Derivatives
Total current liabilities
Non-current liabilities
Other payables
Interest-bearing liabilities
Deferred tax liability
Provisions
Derivatives
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Hedge reserve
Retained earnings
Total equity
Note
3.1
3.2
2.3(c)
5.3(d)
3.1
5.3(d)
4.1
4.2
4.3
3.3
5.1
7.1
4.4
5.3(d)
3.3
5.1
2.3(c)
4.4
5.3(d)
2021
$’000
95,202
154,163
175,930
-
-
2020
$’000
106,760
129,145
175,593
13,225
8,286
425,295
433,009
11,785
9,708
37
37
3,330,413
4,154,994
613,508
591,343
11,828
22,946
3,967,571
4,779,028
4,392,866
5,212,037
231,268
75,116
31,926
18,423
3,485
189,474
81,553
30,430
10,083
824
360,218
312,364
46,269
917,597
155,055
203,789
4,200
62,111
943,008
384,920
260,044
-
1,326,910
1,650,083
1,687,128
1,962,447
2,705,738
3,249,590
5.4(a)
3,013,661
3,003,964
12,213
(5,379)
15,253
5,223
(314,757)
225,150
2,705,738
3,249,590
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
56 | Whitehaven Coal Annual Report 2021
Consolidated statement
of changes in equity
For the year ended 30 June 2021
Balance at 1 July 2019
Profit for the period
Other comprehensive income
Total comprehensive income for the year
Issued
capital
Share-based
payment
reserve
Hedge
reserve
Retained
earnings
Total equity
$’000
$’000
$’000
$’000
$’000
Note
5.4(b)
5.4(b)
2,980,933
16,909
(1,979)
526,337
3,522,200
-
-
-
-
30,036
30,036
7,202
7,202
-
7,202
30,036
37,238
-
-
-
-
-
Transactions with owners in their capacity as owners
Dividends paid
Share-based payments
5.5(a)
-
6,259
Transfer on exercise of share-based payments
Cash settled share-based payments
26,392
(7,366)
-
(549)
Purchase of shares through employee share plan
5.4(a)
(3,361)
-
-
-
-
-
-
(312,197)
(312,197)
-
6,259
(19,026)
-
-
-
(549)
(3,361)
Closing balance at 30 June 2020
3,003,964
15,253
5,223
225,150
3,249,590
Opening balance at 1 July 2020
3,003,964
15,253
5,223
225,150
3,249,590
Loss for the period
Other comprehensive loss
Total comprehensive loss for the year
Transactions with owners in their capacity as owners
-
-
-
-
-
-
-
(543,914)
(543,914)
(10,602)
-
(10,602)
(10,602)
(543,914)
(554,516)
Share-based payments
5.5(a)
-
6,995
Share issues/transfers to settle share-based payments
11,034
(7,470)
Cash settled share-based payments
Transfer on lapse of share-based payments
-
-
Purchase of shares through employee share plan
5.4(a)
(1,337)
(836)
(1,729)
-
-
-
-
-
-
-
1,959
319
1,729
6,995
5,523
(517)
-
-
(1,337)
Closing balance at 30 June 2021
3,013,661
12,213
(5,379)
(314,757)
2,705,738
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements.
Whitehaven Coal Annual Report 2021 | 57
Consolidated statement
Notes to the consolidated financial statements
of cash flows
For the year ended 30 June 2021
For the year ended 30 June 2021
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest paid
Interest received
Income taxes refunded/(paid)
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Expenditure on projects
Acquisition of subsidiary
Net cash used in investing activities
Cash flows from financing activities
Payment of finance facility upfront costs
Purchase of shares
Proceeds from senior bank facility
Proceeds from secured loans – ECA facility
Repayment of senior bank facility
Repayment of secured loans – ECA facility
Repayment of lease principal
Payment of dividends
Net cash (used in)/from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Note
2021
$’000
2020
$’000
1,541,762
1,744,954
(1,372,274)
(1,555,020)
169,488
(43,136)
228
12,185
189,934
(30,938)
953
(13,513)
3.4
138,765
146,436
3,499
27
(68,693)
(190,779)
(22,165)
(16,232)
(57,567)
(19,679)
(103,591)
(267,998)
3.3
(2,538)
(1,337)
110,000
-
(13,650)
(3,361)
598,000
51,671
(60,000)
(120,000)
(10,119)
(82,738)
-
(46,732)
(11,558)
106,760
95,202
(11,908)
(79,768)
(312,197)
108,787
(12,775)
119,535
106,760
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
58 | Whitehaven Coal Annual Report 2021
Notes to the consolidated
financial statements
For the year ended 30 June 2021
1. About this report
1.1. Reporting entity
Whitehaven Coal Limited (‘Whitehaven’ or the ‘Company’)
is a for-profit entity, and the principal activity of
Whitehaven and its controlled entities (referred to as the
‘Group’) is the development and operation of coal mines in
New South Wales and Queensland. The consolidated
general purpose financial report of the Group for the year
ended 30 June 2021 was authorised for issue in
accordance with a resolution of the Directors on 26
August 2021. Whitehaven Coal Limited is a company
limited by shares incorporated and domiciled in Australia
whose shares are publicly traded on the Australian
Securities Exchange. The address of the Company’s
registered office is Level 28, 259 George Street, Sydney
NSW 2000.
1.2. Basis of preparation
The financial report is a general purpose financial report,
which has been prepared in accordance with the
requirements of the Corporations Act 2001 (Cth),
Australian Accounting Standards (AAS) and other
authoritative pronouncements of the Australian
Accounting Standards Board (AASB). The financial report
also complies with International Financial Reporting
Standards (IFRS) issued by the International Accounting
Standards Board (IASB) and interpretations of the
International Financial Reporting Interpretations
Committee (IFRIC).
The financial report has been prepared on a historical cost
basis, except for derivative financial instruments that have
been measured at fair value (refer to note 5.3).
The Company is of a kind referred to in ASIC Corporations
Instrument 2016/191 and dated 24 March 2016. In
accordance with that Class Order, all financial information
has been presented in Australian dollars and rounded to
the nearest thousand dollars unless otherwise stated.
1.3. Significant accounting judgements,
estimates and assumptions
In the process of applying the Group’s accounting policies,
management has made a number of judgements and
applied estimates of future events that form the basis of
the carrying values of assets and liabilities, which are not
readily apparent from other sources.
Judgements and estimates that are material to the
financial report are found in the following notes:
2.3
Taxes
4.1
Property, plant and equipment
4.2
Exploration and evaluation
4.4
Provisions
6.2
Interest in joint operations
1.4. Summary of other significant
accounting policies
page 69
page 77
page 79
page 81
page 97
The accounting policies set out below and in the notes
have been applied consistently to all periods presented in
these consolidated financial statements, and have been
applied consistently by all subsidiaries in the Group. Other
significant accounting policies are contained in the notes
to the consolidated financial statements to
which they relate.
(i) Basis of consolidation
The consolidated financial report of the Company for
the financial year ended 30 June 2021 comprises the
Company and its controlled entities (together
referred to as the ‘Group’). A list of the Group’s
significant controlled entities is presented in
Note 6.1.
Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement
with the investee and has the ability to affect those
returns through its power over the investee. The
Group reassesses whether or not it controls an
investee if facts and circumstances indicate that
there are changes to one or more of the three
elements of control. Specifically, the Group controls
an investee if, and only if, the Group has all of
the following:
− Power over the investee (i.e. existing rights that
give it the current ability to direct the relevant
activities of the investee)
− Exposure, or rights, to variable returns from its
involvement with the investee
− The ability to use its power over the investee to
affect its returns.
Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year
are included in the consolidated financial statements
from the date the Group gains control until the date
the Group ceases to control the subsidiary.
Whitehaven Coal Annual Report 2021 | 59
Notes to the consolidated financial statements
For the year ended 30 June 2021
1. About this report (cont.)
1.4 Summary of other significant
accounting policies (cont.)
1.5. New standards, interpretations and
amendments adopted by the Group
(ii) Foreign currency translation
(i) Changes in accounting policy and disclosures
Transactions in foreign currencies are initially
recorded in the functional currency by applying the
exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of
exchange ruling at the balance date. Foreign
exchange differences arising on translation are
recognised in the consolidated statement of profit or
loss and other comprehensive income.
Both the functional and presentation currency of the
Company and all entities in the Group is
Australian dollars ($).
(iii) Goods and services tax
Revenues, expenses and assets (excluding
receivables) are recognised net of the amount of
goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated with the
amount of GST included. The net amount of GST
recoverable from, or payable to, the ATO is included
as a current asset or liability in the consolidated
statement of financial position.
Cash flows are included in the consolidated
statement of cash flows on a gross basis and the
GST components of cash flows arising from investing
and financing activities, which are recoverable from
or payable to the ATO, are classified as operating
cash flows.
(iv) Notes to the consolidated financial statements
The notes to these consolidated financial statements
have been organised into logical groupings to
present more meaningful and dynamic information
to users. To the extent possible, the relevant
accounting policies and numbers have been
provided in the same note. The Group has also
reviewed the notes for materiality and relevance, and
provided additional information where considered
material and relevant to the operations, financial
position or performance of the Group.
The accounting policies adopted in the preparation
of the consolidated financial statements are
consistent with those of the previous financial year.
Several amendments apply for the first time in the
current year. However, they do not impact the
annual consolidated financial statements of
the Group.
(ii) Accounting standards and interpretations issued
but not yet effective
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet effective and have not been adopted by the
Group for the annual reporting period ended 30 June
2021 are outlined below:
Amendments to IFRS 3: Reference to
Conceptual Framework
In May 2020, the IASB issued Amendments to IFRS 3
Business Combinations - Reference to the
Conceptual Framework. The amendments are
intended to replace a reference to a previous version
of the IASB’s Conceptual Framework (the 1989
Framework) with a reference to the current version
issued in March 2018 (the Conceptual Framework)
without significantly changing its requirements.
The amendments add an exception to the
recognition principle of IFRS 3 to avoid the issue of
potential ‘day 2’ gains or losses arising for liabilities
and contingent liabilities that would be within the
scope of IAS 37 Provisions, Contingent Liabilities and
Contingent Assets or IFRIC 21 Levies, if incurred
separately. The exception requires entities to apply
the criteria in IAS 37 or IFRIC 21, respectively, instead
of the Conceptual Framework, to determine whether
a present obligation exists at the acquisition date.
At the same time, the amendments add a new
paragraph to IFRS 3 to clarify that contingent assets
do not qualify for recognition at the acquisition date.
These amendments are effective for annual periods
beginning on or after 1 January 2022. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
60 | Whitehaven Coal Annual Report 2021
Amendments to IAS 16: Property, Plant and
Equipment: Proceeds before Intended Use
The amendment prohibits entities from deducting
from the cost of an item of property, plant and
equipment (PP&E), any proceeds of the sale of items
produced while bringing that asset to the location
and condition necessary for it to be capable of
operating in the manner intended by management.
Instead, an entity recognises the proceeds from
selling such items, and the costs of producing those
items, in profit or loss.
These amendments are effective for annual periods
beginning on or after 1 January 2022. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
Amendments to IAS 37: Onerous Contracts –
Costs of Fulfilling a Contract
In May 2020, the IASB issued amendments to IAS 37
Provisions, Contingent Liabilities and Contingent
Assets to specify which costs an entity needs to
include when assessing whether a contract is
onerous or loss-making.
The amendments apply a ‘directly related cost
approach’. The costs that relate directly to a contract
to provide goods or services include both
incremental costs (e.g. the costs of direct labour and
materials) and an allocation of costs directly related
to contract activities (e.g. depreciation of equipment
used to fulfil the contract as well as costs of contract
management and supervision). General and
administrative costs do not relate directly to a
contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.
These amendments are effective for annual periods
beginning on or after 1 January 2022. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
Amendments to IAS 1: Classification of Liabilities as
Current or Non-current
In January 2020, the IASB issued amendments to IAS
1 Presentation of Financial Statements to clarify the
requirements for classifying liabilities as current or
non-current. Specifically:
- The amendments specify that the conditions
which exist at the end of the reporting period
are those which will be used to determine if a
right to defer settlement of a liability exists
- Management intention or expectation does not
affect classification of liabilities
-
In cases where an instrument with a conversion
option is classified as a liability, the transfer of
equity instruments would constitute settlement
of the liability for the purpose of classifying it as
current or non-current.
These amendments are effective for annual periods
beginning on or after 1 January 2024. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2
– Disclosure of Accounting Policies
In February 2021, the IASB issued amendments to
IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements (the PS), in which it provides
guidance and examples to help entities apply
materiality judgements to accounting policy
disclosures.
The amendments aim to help entities provide
accounting policy disclosures that are more useful
by:
- Replacing the requirement for entities to
disclose their ‘significant’ accounting policies
with a requirement to disclose their ‘material’
accounting policies
- Adding guidance on how entities apply the
concept of materiality in making decisions about
accounting policy disclosures.
These amendments are effective for annual periods
beginning on or after 1 January 2023. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
Amendments to IAS 8 – Definition of Accounting
Estimates
In February 2021, the IASB issued amendments to
IAS 8, in which it introduced a new definition of
‘accounting estimates’. The amendments clarify the
distinction between changes in accounting estimates
and changes in accounting policies and the
correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
These amendments are effective for annual periods
beginning on or after 1 January 2023. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
Whitehaven Coal Annual Report 2021 | 61
Notes to the consolidated financial statements
For the year ended 30 June 2021
1. About this report (cont.)
1.5 New standards, interpretations and
amendments adopted by the Group (cont.)
(ii) Accounting standards and interpretations issued
but not yet effective (cont.)
Amendments to IAS 12 – Deferred Tax related to
Assets and Liabilities arising from a Single
Transaction
In May 2021, the IASB issued amendments to IAS 12,
which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies to
transactions that give rise to equal taxable and
deductible temporary differences.
Under the amendments, the initial recognition
exception does not apply to transactions that, on
initial recognition, give rise to equal taxable and
deductible temporary differences. It only applies if
the recognition of an asset and a liability resulting
from a transaction gives rise to taxable and
deductible temporary differences that are not equal.
These amendments are effective for annual periods
beginning on or after 1 January 2023. They are not
expected to have a significant impact on the Group’s
consolidated financial statements.
62 | Whitehaven Coal Annual Report 2021
2. Group performance
2.1. Segment reporting
Identification of reportable segments
The Group identifies its operating segments based on the internal reports that are reviewed and used by the executive
management team in assessing performance and determining the allocation of resources. The performance of operating
segments is evaluated at least monthly based on revenues and profit before taxes and is measured in accordance with
the Group’s accounting policies.
The Group has determined that it has two reportable segments: open cut operations and underground operations.
Unallocated operations include coal trading, and corporate, marketing and infrastructure functions, which are managed
on a group basis and are not allocated to reportable segments.
The Group’s financing (including finance costs and finance income), and depreciation and income taxes are managed on
a group basis and are not allocated to reportable segments.
The following table represents revenue, profit and capital expenditure information for reportable segments:
Year ended 30 June 2021
Revenue
Sales to external customers
Revenue by product type:
Metallurgical coal
Thermal coal
Open Cut
Operations
Underground
Operations
Unallocated
Operations
$’000
$’000
$’000
Total
$’000
1,107,187
263,101
186,688
1,556,976
208,821
35,457
-
244,278
898,366
227,644
186,688
1,312,698
Total revenue from contracts with customers
1,107,187
263,101
186,688
1,556,976
Result
Segment EBITDA result
Impairment losses
Depreciation and amortisation
Income tax benefit
Net finance expense
Net loss after tax per consolidated statement
of comprehensive income
Capital expenditure
Segment expenditure
250,410
(48,657)
2,728
204,481
(650,000)
(260,662)
224,281
(62,014)
(543,914)
43,418
21,967
25,473
90,858
Whitehaven Coal Annual Report 2021 | 63
Notes to the consolidated financial statements
For the year ended 30 June 2021
2. Group performance (cont.)
2.1 Segment reporting (cont.)
Year ended 30 June 2020
Revenue
Sales to external customers
Revenue by product type:
Metallurgical coal
Thermal coal
Open Cut
Operations
Underground
Operations
Unallocated
Operations
$’000
$’000
$’000
Total
$’000
1,040,781
475,820
205,008
1,721,609
246,434
794,347
73,605
-
320,039
402,215
205,008
1,401,570
Total revenue from contracts with customers
1,040,781
475,820
205,008
1,721,609
Result
Segment EBITDA result
Depreciation and amortisation
Income tax expense
Net finance expense
Net profit after tax per consolidated statement
of profit or loss and other comprehensive income
Capital expenditure
Segment expenditure
Other segment information
212,276
107,655
(13,968)
305,963
(224,583)
(12,294)
(39,050)
30,036
94,832
91,797
61,717
248,346
Revenue from external customers is attributed to geographic location based on final shipping destination.
Revenue by
geographic location
Japan
Korea
Taiwan
India
Malaysia
Thailand
New Caledonia
Indonesia
Vietnam
Philippines
Other
Domestic
2021
$’000
691,455
295,988
201,886
151,421
73,870
26,335
25,796
24,472
22,939
10,980
20,258
11,576
2020
$’000
844,007
231,217
256,089
134,814
51,346
-
25,291
26,593
61,888
37,786
39,274
13,304
Total revenue
1,556,976
1,721,609
64 | Whitehaven Coal Annual Report 2021
Major customers
The Group has three major customers, who account for 40.5% (2020: 28.1%) of external revenue.
Recognition and measurement
The Group recognises sales revenue related to the transfer of promised goods or services when control of the goods
or services is transferred to the customer. The amount of revenue recognised reflects the consideration to which the
Group is or expects to be entitled to in exchange for those goods or services.
Sales revenue is recognised on individual sales when control transfers to the customer. The title, risks and rewards,
and fulfilment of performance obligation occurs when the product is loaded onto the vessel for delivery to the
customer.
The Group sells its products on Free on Board terms where the Group has no responsibility for freight or insurance
once control of the goods has passed at the loading port. Under these terms there is only one performance
obligation: the provision of goods at the point when control passes to the customer.
The Group’s products are sold to customers under contracts that vary in tenure and pricing mechanisms, primarily
being monthly or quarterly indexes. Certain sales may be provisionally priced at the date revenue is recognised,
however substantially all coal sales are reflected at final prices by the end of the reporting period. The final selling
price is based on the price for the quotational period stipulated in the contract.
2.2. Significant items
The items below are significant to understanding the overall results of the Group. The Company believes the disclosure of
these items provides readers of the financial statements with further meaningful insights to understand the financial
performance of the Group.
Included within the balances presented on the face of
the consolidated statement of comprehensive income:
Impairment losses
Property, Plant and Equipment
Intangibles
Significant items before tax
Applicable income tax benefit
Significant items after tax
Note
2021
$’000
2020
$’000
4.1
4.3
638,882
11,118
650,000
(193,399)
456,601
-
-
-
-
-
Significant items are items of income and expense, which, due to their nature and variable financial impact or the
expected infrequency of the events giving rise to them, are separated for internal reporting, and analysis of Whitehaven’s
results to aid in providing an understanding and comparative basis of the underlying financial performance. In FY21,
Whitehaven recognised significant expenses totalling $650 million (FY20: nil). The significant expenses relate to asset
impairments. For further details see notes 4.1 and 4.3. The FY21 impairment charge was allocated to the following:
− Narrabri ($548.7 million) due to the reduction in the JORC Coal Reserves on the current Narrabri Mining Lease, arising
out of an optimisation plan which has been developed to focus on the production of higher quality coal over the
balance of mine life
− Werris Creek ($90.2 million) due to revisions to its mine plan and uncertainties for this market segment
After the adoption of conservative price assumptions considering the uncertainties in coal markets
− Rail intangible ($11.1 million) relates to rail rights which are no longer expected to be utilised.
Whitehaven Coal Annual Report 2021 | 65
Notes to the consolidated financial statements
For the year ended 30 June 2021
2. Group performance (cont.)
2.3. Taxes
a)
Income tax expense
Current tax expense
Current period
Adjustments for prior periods
Deferred tax expense
Origination and reversal of temporary differences
Adjustments for prior periods
2021
$’000
68,478
(1,040)
2020
$’000
50,365
-
157,061
(61,965)
(218)
(694)
Income tax benefit/(expense) reported in the consolidated statement of comprehensive income
224,281
(12,294)
Reconciliation between tax expense and profit before tax
(Loss)/profit before tax
(768,195)
42,330
Income tax benefit/(expense) using the Company’s domestic tax rate of 30% (2020: 30%)
230,459
(12,699)
Non-deductible expenses:
Share-based payments
Other non-deductible expenses
Non-assessable income (acquisition related)
On-market share purchases by employee share scheme trust reimbursed by the Group
Under provided in prior periods
Total income tax benefit/(expense)
b)
Income tax recognised directly in other comprehensive income
Deferred income tax related to items charged/(credited) directly to equity
Derivatives
Income tax benefit/(expense) recorded in equity
(2,098)
(2,822)
-
-
(1,258)
(1,878)
(359)
2,326
1,010
(694)
224,281
(12,294)
2021
$’000
4,544
4,544
2020
$’000
(3,087)
(3,087)
66 | Whitehaven Coal Annual Report 2021
c) Recognised tax assets and liabilities
2021
2021
2020
2020
Opening balance
Charged to income – corporate tax
Charged to equity
$’000
13,225
68,478
-
Recognition of deferred tax asset on current year losses
(68,478)
Utilisation of tax losses
Acquisition of a subsidiary (note 6.1)
Adjustment for prior periods
(Refunds)/payments
Closing balance
Current income
tax receivable
Deferred
income tax
Current income
tax receivable
$’000
(384,920)
157,061
4,544
68,478
-
-
(218)
-
-
-
(1,040)
(12,185)
-
(155,055)
$’000
(288)
50,365
-
(50,365)
-
-
-
13,513
13,225
Deferred
income tax
$’000
(390,068)
(61,997)
(3,087)
50,365
-
20,561
(694)
-
(384,920)
Deferred income tax assets and liabilities are attributable to the following:
Property, plant and equipment
Exploration and evaluation
Receivables
Inventory
Investments
Right-of-use assets and lease liabilities (net)
Deferred stripping
Deferred foreign exchange gain
Provisions
Tax losses
Other items
Tax assets/(liabilities)
Set-off of tax (liabilities)/assets
Net tax liabilities
Assets
2021
$’000
-
-
-
-
359
-
-
3,872
74,564
180,976
-
2020
$’000
-
-
-
-
359
-
-
-
89,664
112,370
36
Liabilities
2021
$’000
(328,752)
(68,027)
(5,225)
(1,390)
-
(6,357)
(1,676)
-
-
-
2020
$’000
(501,359)
(51,783)
(5,601)
(1,687)
-
(1,989)
(17,623)
(2,286)
-
-
(3,399)
(5,021)
259,771
202,429
(414,826)
(587,349)
(259,771)
(202,429)
259,771
202,429
-
-
(155,055)
(384,920)
Whitehaven Coal Annual Report 2021 | 67
Notes to the consolidated financial statements
For the year ended 30 June 2021
2. Group performance (cont.)
2.3 Taxes (cont.)
d) Unrecognised deferred tax assets
There were $21,771,000 in unrecognised income tax losses at 30 June 2021 (2020: $21,771,000).
Recognition and measurement
Income tax on the profit or loss for the year comprises
current and deferred tax. Income tax relating to items
recognised directly in other comprehensive income is
recognised in other comprehensive income and not in
the net profit or loss for the year.
Offsetting deferred tax balances
Deferred tax assets and liabilities are offset only if a
legally enforceable right exists, and the deferred tax
assets and liabilities relate to income taxes levied by the
same taxation authority on the same taxable entity.
Current tax
Current tax assets and liabilities are measured at the
amount expected to be recovered or paid to the
taxation authorities based on the taxable income for the
year, using tax rates enacted or substantively enacted at
the balance date.
Deferred tax
The deferred tax expense is the movement in the
temporary differences between the carrying amount of
an asset or liability in the consolidated statement of
financial position and its tax base.
Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets, including
unused tax losses, are recognised in relation to
deductible temporary differences and carried forward
income tax losses only to the extent that it is probable
sufficient future taxable profits will be available to utilise
them. Deferred tax assets and liabilities are not
recognised for taxable temporary differences that arise
from goodwill or from the initial recognition (other than
in a business combination) of assets and liabilities in a
transaction that affects neither accounting profit nor the
taxable profit.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to
be utilised.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset is realised,
based on tax rates and laws that have been enacted or
substantively enacted at the balance date.
Tax consolidation
Whitehaven Coal Limited and its wholly owned
Australian resident subsidiaries formed a tax
consolidated group with effect from 29 May 2007 and
have therefore been taxed as a single entity from that
date. Whitehaven Coal Limited is the head entity of the
tax consolidated group. The entities within the tax
consolidated group have entered into a tax sharing
arrangement which provides for the allocation of income
tax liabilities between the entities should the head entity
default on its tax payment obligations.
The entities within the tax consolidated group have also
entered into a tax funding agreement. The Group has
applied the Group allocation approach in determining
the appropriate amount of current taxes and deferred
taxes to allocate to its members. Under the terms of the
tax-funding arrangement, Whitehaven Coal Limited and
each of the entities in the tax consolidated group have
agreed to pay (or receive) a tax equivalent payment to
(or from) the head entity, based on the current tax
liability or current tax asset of the entity.
Whitehaven Coal Limited and the subsidiaries in the tax
consolidated group continue to account for their own
current and deferred tax amounts. The amounts are
measured as if each entity in the tax consolidated group
continues to be a standalone taxpayer in its own right.
The current tax balances are then transferred to
Whitehaven Coal Limited via intercompany balances.
68 | Whitehaven Coal Annual Report 2021
Significant accounting judgements, estimates and assumptions
Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are
recognised only where it is considered more likely that they will be recovered, which is dependent on the generation
of sufficient future taxable profits.
Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows.
These rely on estimates of future production and sales volumes, operating costs, rehabilitation costs, capital
expenditure, dividends and other capital management transactions. Judgements are also required about the
application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence
there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred
tax assets and liabilities recognised on the consolidated statement of financial position. Other tax losses and
temporary differences not yet recognised may also require adjustment, resulting in a corresponding credit or charge
to the consolidated statement of comprehensive income.
2.4. Earnings per share
Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders and a weighted
average number of ordinary shares outstanding during the year calculated as follows:
2021
$’000
2020
$’000
Profit attributable to ordinary shareholders
Net (loss)/profit attributable to ordinary shareholders ($‘000)
(543,914)
30,036
Weighted average number of ordinary shares
Issued ordinary shares at 1 July (000s)
Effect of shares issued/acquired during the year (000s)
Weighted average number of ordinary shares at 30 June (000s)
992,026
4,519
996,545
992,026
(1,891)
990,135
Basic (loss)/earnings per share attributable to ordinary shareholders (cents)
(54.6)
3.0
Diluted earnings per share
Diluted earnings per share is based on the profit attributable to ordinary shareholders and a weighted average number of
ordinary shares outstanding adjusted for the diluting impact of potential equity instruments, calculated as follows:
2021
$’000
2020
$’000
Profit attributable to ordinary shareholders (diluted)
Net (loss)/profit attributable to ordinary shareholders (diluted) ($’000)
(543,914)
30,036
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares (basic) (000s)
Effect of share options/performance rights on issue (000s)
Weighted average number of ordinary shares (diluted) (000s)
996,545
-1
990,135
12,869
996,545
1,003,004
Diluted (loss)/earnings per share attributable to ordinary shareholders (cents)
(54.6)
3.0
1
In FY21, the potential ordinary shares are anti-dilutive and therefore diluted earnings per share has not been calculated.
Whitehaven Coal Annual Report 2021 | 69
Notes to the consolidated financial statements
For the year ended 30 June 2021
3. Working capital and cash flows
3.1. Trade and other receivables
Current
Trade receivables
Other receivables and prepayments
Receivables due from other investors in joint operations
Non-current
Other receivables and prepayments
Recognition and measurement
2021
$’000
95,715
39,476
18,972
154,163
2020
$’000
97,435
19,618
12,092
129,145
11,785
9,708
Trade receivables, which generally have between 5 and 21 day terms, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method, less any allowance for impairment.
Recoverability of trade receivables is reviewed on an ongoing basis.
3.2. Inventories
Coal stocks1
Consumables and stores
1 Coal stocks include run-of-mine and product coal.
Recognition and measurement
2021
$’000
138,071
37,859
175,930
2020
$’000
134,330
41,263
175,593
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and selling expenses.
The cost of coal inventories is determined using a weighted average basis. Cost includes direct material, overburden
removal, mining, processing, labour, mine rehabilitation costs incurred in the extraction process and other fixed and
variable overhead costs directly related to mining activities. Stockpiles are measured by estimating the number of
tonnes added and removed from the stockpile. The tonnes of contained coal are based on assay data, and the
estimated recovery percentage is based on the expected processing method. Stockpile tonnages are verified by
periodic surveys.
70 | Whitehaven Coal Annual Report 2021
3.3. Trade and other payables
Current
Trade payables
Other payables and accruals
Non-current
Other payables
2021
$’000
78,808
152,460
231,268
2020
$’000
59,892
129,582
189,474
46,269
62,111
During the prior corresponding period, the Group acquired EDF Trading Australia Pty Limited with a portion of the
overall consideration deferred and to be paid over five years. During the year ended 30 June 2021, the Group paid
$16,232,000 for the first deferred payment. Current and non-current other payables include the deferred consideration
payable over the next four years.
Recognition and measurement
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost when
goods and services are received, whether or not billed to the Group, prior to the end of the reporting period. Short-
term trade and other payables are not discounted. The amounts are unsecured and are usually paid within 30 days of
recognition. Long-term trade and other payables are discounted to their present value based on expected future
cash flows. The unwinding effect of discounting trade and other payables is recorded as a finance cost in the
consolidated statement of comprehensive income.
Whitehaven Coal Annual Report 2021 | 71
Notes to the consolidated financial statements
For the year ended 30 June 2021
3. Working capital and cash flows (cont.)
3.4. Reconciliation of cash flows from operating activities
(Loss)/profit for the period
Adjustments for:
Depreciation and amortisation
Impairment losses
Amortisation of deferred development costs
Development costs deferred
Amortisation of finance facility upfront costs
Modification gain on senior debt facility
Non-cash interest expense accruals
Foreign exchange losses unrealised
Unwinding of discounts on provisions
Share-based compensation payments
Cash-settled share-based payments
Gain on acquisition of a subsidiary
Gain on sale of non-current assets
Subtotal
Change in trade and other receivables
Change in inventories and deferred stripping
Change in trade and other payables
Change in provisions and employee benefits
Change in tax payable
Change in deferred taxes
Cash flows from operating activities
Recognition and measurement
Note
2.2
4.1
4.1
5.2
4.4
5.5(a)
2021
$’000
(543,914)
260,662
650,000
56,615
(94,578)
14,495
-
1,341
5,316
3,269
6,995
(517)
-
(3,680)
356,004
(26,414)
(422)
38,955
(17,263)
12,967
(225,062)
138,765
2020
$’000
30,036
224,583
-
81,767
(110,610)
8,782
(8,673)
4,664
2,172
4,297
6,259
(549)
(6,701)
(1,765)
234,262
18,110
(40,514)
(43,170)
(21,033)
(13,458)
12,239
146,436
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits. For the purpose of the
consolidated statement of cash flows, cash and cash equivalents are equal to the balance disclosed in the
consolidated statement of financial position.
72 | Whitehaven Coal Annual Report 2021
4. Resource assets and liabilities
4.1. Property, plant and equipment
Year ended
30 June 2021
Cost
Balance at
1 July 2020
Additions
Transfers
Disposals
Balance at
30 June 2021
Freehold
land
Plant and
equipment
Leased
plant and
equipment
Mining
property and
development
Subtotal
Deferred
development
Deferred
stripping
Subtotal
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
144,078
1,088,567
614,939
3,224,657
5,072,241
467,357
2,496,740
2,964,097
8,036,338
9,688
21,873
33,917
11,105
76,583
94,578
391,657
486,235
562,818
25,035
-
-
(25,035)
-
-
(22,524)
(38,188)
(31,981)
(92,693)
-
-
-
-
-
-
-
(92,693)
178,801
1,087,916
610,668
3,178,746
5,056,131
561,935
2,888,397
3,450,332
8,506,463
Accumulated depreciation and impairment
-
(412,581)
(253,572)
(608,080) (1,274,233)
(169,116)
(2,437,995)
(2,607,111)
(3,881,344)
-
(54,224)
(109,132)
(96,272)
(259,628)
(56,615)
(392,605)
(449,220)
(708,848)
(5,335)
-
-
(288,644)
(293,979)
(292,693)
(52,210)
(344,903)
(638,882)
-
22,492
30,532
-
53,024
-
-
-
53,024
(5,335)
(444,313)
(332,172)
(992,996)
(1,774,816)
(518,424)
(2,882,810) (3,401,234) (5,176,050)
173,466
643,603
278,496
2,185,750
3,281,315
43,511
5,587
49,098
3,330,413
Balance at
1 July 2020
Depreciation
charge for the year
Impairment
Disposals
Balance at
30 June 2021
Carrying amount
at 30 June 2021
Impairment
Based on the impairment analysis performed at 30 June 2021, the Group identified impairments of $638.9 million. The
FY21 impairment charge was allocated to the following:
− Narrabri ($548.7 million) due to the reduction in the JORC Coal Reserves on the current Narrabri Mining Lease,
arising out of an optimisation plan which has been developed to focus on the production of higher quality coal over
the balance of mine life
− Werris Creek ($90.2 million) due to revisions to its mine plan and uncertainties for this market segment
After the adoption of conservative price assumptions considering the uncertainties in coal markets.
Refer to Significant accounting judgements, estimates and assumptions for further details in relation to the recoverable
amount of assets.
Whitehaven Coal Annual Report 2021 | 73
Notes to the consolidated financial statements
For the year ended 30 June 2021
4. Resource assets and liabilities (cont.)
4.1 Property, plant and equipment (cont.)
Year ended
30 June 2020
Cost
Balance at
1 July 2019
Additions
PP&E acquired as
part of subsidiary
acquisition
Disposals
Balance at
30 June 2020
Freehold
land
Plant and
equipment
Leased
plant and
equipment
Mining
property and
development
Subtotal
Deferred
development
Deferred
stripping
Subtotal
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
107,489
933,454
500,772
3,166,337
4,708,052
406,345 2,068,955
2,475,300
7,183,352
35,621
144,745
258,253
22,904
461,523
110,610
427,785
538,395
999,918
968
28,321
142
35,416
64,847
26,071
-
(17,953)
(144,228)
-
(162,181)
(75,669)
-
-
26,071
90,918
(75,669)
(237,850)
144,078
1,088,567
614,939
3,224,657
5,072,241
467,357 2,496,740
2,964,097
8,036,338
Accumulated depreciation
Balance at
1 July 2019
Depreciation
charge for the year
Disposals
Balance at
30 June 2020
Carrying amount
at 30 June 2020
-
(375,735)
(255,415)
(511,536)
(1,142,686)
(163,018) (2,035,776) (2,198,794) (3,341,480)
-
(54,799)
(80,705)
(96,544)
(232,048)
(81,767)
(402,219)
(483,986)
(716,034)
-
17,953
82,548
-
100,501
75,669
-
75,669
176,170
-
(412,581)
(253,572)
(608,080)
(1,274,233)
(169,116) (2,437,995)
(2,607,111)
(3,881,344)
144,078
675,986
361,367
2,616,577
3,798,008
298,241
58,745
356,986
4,154,994
74 | Whitehaven Coal Annual Report 2021
Leased plant and equipment disclosures
All right-of-use assets recognised as ‘Leased plant and
equipment’ above in note 4.1 relate to the plant and
equipment classification.
The cost relating to leases with a contract term of less
than twelve months amounted to $6,261,000 for the year
ended 30 June 2021 (2020: $9,823,000).
The cost relating to variable lease payments that do not
depend on an index or a rate amounted to $27,981,000 in
the year ended 30 June 2021 (2020: $37,545,000).
A maturity analysis of lease liabilities is shown in Note
5.3(c).
Recognition and measurement
Property, plant and equipment
Mining property and development
Property, plant and equipment are measured at cost less
accumulated depreciation and any accumulated
impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items and
costs incurred in bringing assets into use. Subsequent
expenditure is capitalised when it is probable that the
future economic benefits associated with the
expenditure will flow to the Group.
Depreciation
Depreciation and amortisation is charged to the
consolidated statement of comprehensive income on a
units of production basis for mine specific assets,
including mining property and development, deferred
development and deferred stripping.
All remaining assets are depreciated on a straight line
basis at the rates indicated below. Depreciation
commences on assets when they are deemed capable of
operating in the manner intended by management.
− Freehold land
− Plant and equipment
− Leased plant
Not depreciated
3% – 20%
2% – 50%
and equipment
− Mining property and
development, deferred
development and
deferred stripping
Units of production
The residual value, the useful life and the depreciation
method applied to an asset are reassessed at least
annually. Any changes are accounted for prospectively.
When an asset is surplus to requirements or no longer
has an economic value, the carrying amount of the asset
is written down to its recoverable amount.
Mine property and development assets include costs
transferred from exploration and evaluation assets once
technical feasibility and commercial viability of an area
of interest are demonstrable. After transfer, all
subsequent mine development expenditure is similarly
capitalised, to the extent that commercial viability
conditions continue to be satisfied.
The costs of dismantling and site rehabilitation are
capitalised, if the recognition criteria is met and included
within mining property and development.
Biodiversity assets are included within mining property
and development and relate to land acquired and
managed to fulfil the biodiversity obligations associated
with mine approval. The cost of the land is capitalised as
a mining property and development asset which is
subsequently depreciated via the units of production
method.
Leased plant and equipment
The Group has lease contracts for various items of plant,
machinery and other equipment used in its operations.
At the inception of a contract, the Group assesses
whether a contract is, or contains, a lease based on the
right to use or control an identified asset for a period of
time, in exchange for consideration.
At the commencement date of the lease, the Group
recognises a lease liability and a corresponding right-of-
use asset. The lease liability is initially recognised for the
present value of non-cancellable lease payments
discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group’s
incremental borrowing rate. The right-of-use asset is
initially measured at cost, which comprises the initial
amount of the lease liability plus any initial direct costs
incurred and an estimate of costs to dismantle and
remove the underlying asset.
Whitehaven Coal Annual Report 2021 | 75
Notes to the consolidated financial statements
For the year ended 30 June 2021
4. Resource assets and liabilities (cont.)
4.1 Property, plant and equipment (cont.)
The right-of-use asset is depreciated to the earlier of the
asset’s useful life or the lease term using the straight line
method and is recognised in the statement of
comprehensive income in depreciation and amortisation.
Where the lease transfers ownership of the underlying
asset to the Group by the end of the lease term, the
right-of-use asset is depreciated from the
commencement date to the end of the useful life of the
underlying asset.
The unwinding of the financial charge on the lease
liability is recognised in the statement of comprehensive
income in financial expenses, and is based on the
implied interest rate or, if used, the Group’s incremental
borrowing rate.
The Group does not recognise leases that have a lease
term of 12 months or less, or are of low value, as a right-
of-use asset or lease liability. Lease payments associated
with these leases are recognised as an expense in the
consolidated statement of comprehensive income in
operating expenses on a straight line basis over the
lease term.
Deferred development
Deferred development mainly comprises capitalised
costs (deferred development expenditure) related to
underground mining incurred to expand the capacity of
an underground mine and to maintain production.
Deferred stripping
Expenditure incurred to remove overburden or waste
material during the production phase of an open cut
mining operation is deferred to the extent it gives rise to
future economic benefits. This expenditure is charged to
operating costs on a units of production basis using the
estimated average stripping ratio for the area being
mined. Changes in estimates of average stripping ratios
are accounted for prospectively. The stripping activity
asset is subsequently depreciated on a units of
production basis over the life of the identified
component of the ore body that became more
accessible as a result of the stripping activity.
For the purposes of assessing impairment, deferred
stripping assets are grouped with other assets of the
relevant cash generating unit (CGU).
Impairment
The carrying amounts of the Group’s non-financial
assets are reviewed at each balance date to determine
whether there is any indication of impairment. If any
such indication exists, the asset’s recoverable amount is
estimated. For intangible assets that have indefinite lives
or that are not yet available for use, the recoverable
amount is estimated at each reporting date.
For the purpose of impairment testing, assets are
grouped together into the smallest group of assets that
generates cash inflows from continuing use, and which
are largely independent of the cash inflows of other
assets or groups of assets – the CGU. The recoverable
amount of an asset or CGU is the greater of its value in
use and its fair value less costs of disposal (‘FVLCD’). In
assessing FVLCD, the estimated future cash flows are
discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to the
asset.
An impairment loss is recognised whenever the carrying
amount of an asset or its CGU exceeds its recoverable
amount. In accordance with AASB 136 Impairment of
Assets, impairment losses have been allocated such that
the carrying value of individual assets within the Group’s
CGU were not reduced below their recoverable amount.
76 | Whitehaven Coal Annual Report 2021
Significant accounting judgements, estimates and assumptions
Recoverable amount of assets
Demand for fossil fuels/coal price
At the end of each period, the Group assesses whether
there is any indication that an asset may be impaired. If
any such indication exists, the Group estimates the
recoverable amount of the asset.
During the year to 30 June 2021, the Group has
experienced increased operational uncertainty at the
Narrabri underground mine. This has been associated
with difficult geological conditions in the deeper
northern panels. The geological conditions encountered
have impacted production rates, unit costs and
adversely impacted coal quality. There has also been a
reduction in the JORC Coal Reserve on the Narrabri
Mining Lease, arising out of an optimisation plan which
has been developed to focus on the production of
higher quality coal over the balance of mine life. In
addition, significant spreads have emerged between
segments of the coal market, impacting realised price
outcomes at Narrabri and the Werris Creek open cut
mine, while there were also revisions to mine plans at
Werris Creek.
As a result, impairment indicators were identified for the
CGU and an impairment assessment was carried out.
The recoverable amount of the CGU and individual
assets are determined based on value-in-use
calculations. These calculations require the use of
estimates and assumptions.
Expected future cash flows used to determine the
recoverable value of tangible assets are inherently
uncertain and could materially change over time. They
are affected by a number of factors including reserves
and production estimates together with economic
factors, such as spot and future coal prices, discount
rates, foreign currency exchange rates, estimates of
costs to produce reserves, stripping ratio, production
rates and future capital expenditure. It is possible that
these assumptions may change, which could impact the
estimated life of a mine and result in a material
adjustment to the carrying value of tangible assets.
Based on the impairment analysis performed at 30 June
2021, the Group identified impairments of $638.9 million.
The impairment charge has been included within
expenses in the statement of other comprehensive
income. Impairment losses were allocated such that the
carrying value of individual assets were not reduced
below their recoverable amount. This has been disclosed
as a significant item in note 2.2.
The recoverable amount of the CGU is sensitive to the
below key assumptions:
The recoverable value of the Company’s Coal Reserves
and of its plant and equipment is most sensitive to
future USD coal prices and the AUD:USD foreign
exchange rate, which together impact the AUD price
that the company receives for the sale of its products in
the global energy and steel manufacturing complexes.
In determining our base case coal prices, we considered
coal pricing assumptions from recognised commodity
consultants. In determining their coal price forecasts, the
commodity consultants considered scenarios from the
International Energy Agency (IEA). Historical pricing for
6000 kcal NAR coal over three time horizons was also
considered.
Since the Paris Agreement came into force, the IEA has
published a number of scenarios in its annual World
Energy Outlook (WEO). In WEO 2020, the IEA released
the Stated Policies Scenario (STEPS), which reflects the
impact of existing policy frameworks and today’s
announced policy intentions. The base case price used in
the impairment assessment is higher than that in STEPS
due to the commodity consultant’s assumption that
higher prices will be required to induce the required
investment to maintain supply levels under this scenario.
In 2020 the IEA published the Sustainable Development
Scenario (SDS) and in 2021 it published its Net Zero
Emissions by 2050 Scenario (NZE2050). These
scenarios assume much greater emissions reduction
commitments than STEPS.
The recoverability of assets has been assessed by
undertaking scenario analysis to better understand and
assess external risks to our business and inform
strategic decision making. Scenario analysis is not the
same as forecasting; it is a mechanism that uses
scenarios, in some cases with dramatic deviations from a
base case and with varying degrees of probability, to
test business resilience and to frame consequential
financial outcomes. Asian coal demand and coal prices
are key assumptions in our analysis.
If thermal coal is displaced in Asia either more rapidly or
more slowly than our forecasts anticipate, or if supply
reinvestment takes place more slowly than is necessary
to meet Asia’s demand, then the resulting supply
overhang or supply shortfall could result in commodity
prices which are lower or higher than our base case. We
have illustrated this in the table below by showing the
various NPV scenarios, relative to the base case, at
possible commodity price curves consistent with the
IEA’s scenarios. The STEPS and SDS sensitivity prices
set out in the table below are those included in the
documentation to the IEA’s World Energy Model 2020:
Whitehaven Coal Annual Report 2021 | 77
Notes to the consolidated financial statements
For the year ended 30 June 2021
4. Resource assets and liabilities (cont.)
4.1 Property, plant and equipment (cont.)
Base case assumptions
Long-term price US$ (Newcastle FOB) – FY25 onwards
FX rate – FY25 onwards
Discount rate assumption applied (real, post-tax)
Medium to long-term price assumptions under various scenarios (FY25 onwards) 1
5, 10, 15 Year Historical Averages - $A/t
Consultant 1 (2021) - $US/t
Consultant 1 (2021) - FX
Consultant 2 (2021) - $US/t
Consultant 2 (2021) - FX
STEPS 2021 - $US/t2,3,4
SDS 2021 - $US/t2,3,4
Carrying value of CGU Assets employed as 30 June 2021
% of carrying value recovered by 2040 – base case
Approximate illustrative NPV outcomes under various price scenarios, relative to base case
5, 10, 15 Year Historical Averages
Consultant 1 (2021) - $US/t
Consultant 2 (2021) - $US/t
STEPS 2021 - $US/t2,3,4
SDS 2021 - $US/t2,3,4
76-82
0.76-0.73
8.25%
110-120
78-92
0.72
74-71
0.80-0.73
75-72
67-55
$3.2 billion
86%
Plus 0-35%
Plus 25-30%
Minus 28-32%
Minus 7-10%
Minus 35-40%
1. All coal prices are presented in real FY21 dollars per tonne. Where coal price forecasts have been provided on a different basis, they have been inflated to a FY21
basis using a CPI of 2%.
2. The IEA’s STEPS and SDS scenarios do not provide metallurgical coal price scenarios. Outcomes adopt base case price assumptions for metallurgical coal.
3. STEPS and SDS do not provide AUD:USD FX scenarios. Outcomes adopt an average of consultant FX forecasts.
4. STEPS and SDS do not provide price forecasts for every year. STEPS provides forecasts for calendar years 2025, 2030, 2035 and 2040. SDS provides prices for
calendar years 2025 and 2040. Coal price forecasts for the intervening years were necessarily interpolated between the given data points using the spot price at
April 21 (US$93/t FOB) as a starting point.
The JORC Code requires the use of reasonable
investment assumptions to calculate reserves and
resources. Changes in reported Reserves and Resources
can impact the carrying value of property, plant and
equipment, as well as provisions for rehabilitation and
the amount charged for amortisation and depreciation.
Material changes in circumstances may affect the
assumptions used to determine the recoverable amount
of the CGU and could result in an impairment of tangible
assets recognised at future reporting dates.
Discount rate
The discount rate is derived using the weighted average
cost of capital methodology adjusted for any risks that
are not reflected in the underlying cash flows. A real
post-tax discount rate of 8.25% was applied to post-tax
cash flows.
Mineral reserves and resources
The estimated quantities of economically recoverable
Reserves and Resources are based on interpretations of
geological and geophysical models, which require
assumptions to be made of factors such as estimates of
future operating performance, future capital
requirements and short and long-term coal prices. The
Group is required to determine and report Reserves and
Resources under the Australian Code for Reporting
Mineral Resources and Ore Reserves December 2012
(the JORC Code).
78 | Whitehaven Coal Annual Report 2021
4.2. Exploration and evaluation
Exploration and evaluation assets
Balance at 1 July 2020
Exploration and evaluation expenditure
Balance at 30 June 2021
Balance at 1 July 2019
Exploration and evaluation assets acquired as part of subsidiary acquisition
Exploration and evaluation expenditure
Balance at 30 June 2020
Recognition and measurement
Exploration and evaluation assets, including the costs of
acquiring licences, are capitalised on an area of interest
basis and only after the Company has obtained the legal
rights to explore the area.
Exploration and evaluation assets are only recognised if
the rights of the area of interest are current and either:
i)
The expenditures are expected to be recouped
through successful development and exploitation
of the area of interest, or
ii) Activities in the area of interest have not (at the
reporting date) reached a stage that permits a
reasonable assessment of the existence or
otherwise of economically recoverable reserves,
and active and significant operations in, or in
relation to, the area of interest are continuing.
$’000
591,343
22,165
613,508
547,089
949
43,305
591,343
Exploration and evaluation assets are assessed for
impairment if:
i)
ii)
Sufficient data exists to determine technical
feasibility and commercial viability, and
Facts and circumstances suggest that the carrying
amount exceeds the recoverable amount. For the
purposes of impairment testing, exploration and
evaluation assets are not allocated to CGUs.
Where a potential impairment is indicated, an
assessment is performed for each area of interest or at
the CGU level, in line with the assessment disclosed at
note 4.1. To the extent that capitalised expenditure is not
expected to be recovered, it is charged to the
consolidated statement of comprehensive income. Once
the technical feasibility and commercial viability of the
extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets
attributable to that area of interest are first tested for
impairment and then reclassified to mining property and
development assets within property, plant and
equipment.
Significant accounting judgements, estimates and assumptions
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in
determining whether future economic benefits are likely, which may be based on assumptions about future events or
circumstances. Estimates and assumptions made may change if new information becomes available. If, after
expenditure is capitalised, information becomes available indicating that the recovery of expenditure is unlikely, the
amount capitalised is written off in the consolidated statement of comprehensive income in the period when the new
information becomes available. The recoverability of the carrying amount of exploration and evaluation assets is
dependent on the successful development and commercial exploitation or sale of the respective areas of interest.
Whitehaven Coal Annual Report 2021 | 79
Notes to the consolidated financial statements
For the year ended 30 June 2021
4. Resource assets and liabilities (cont.)
4.3. Intangible assets
Balance at 1 July 2020
Impairment2
Balance at 30 June 2021
Balance at 1 July 2019
Additions
Intangible assets acquired as part of subsidiary acquisition
Balance at 30 June 2020
Water access
rights
Rail
access rights1
$’000
11,828
-
11,828
10,232
1,380
216
11,828
$’000
11,118
(11,118)
-
11,118
-
-
11,118
Total
$’000
22,946
(11,118)
11,828
21,350
1,380
216
22,946
1 As part of the agreement to cancel previously existing infrastructure sharing arrangements, Whitehaven agreed to pay 10.1% of the construction cost of the shared
portion of the Boggabri - Maules Creek rail spur. In return, Whitehaven received access to rail tonnes on the joint rail spur.
Impairment relates to rail rights which are no longer expected to be utilised.
2
Recognition and measurement
Water access rights
The Group holds water access rights, which have been determined to have an indefinite life. The water access rights
have been recognised at cost and are assessed annually for impairment.
Rail access rights
Rail access rights have a finite useful life and are carried at cost less, where applicable, any accumulated amortisation
and accumulated impairment losses. Rail access rights are amortised over the access agreement.
4.4. Provisions
Movement in mine rehabilitation and biodiversity obligations provisions
Balance at 1 July 2020
Payments made on rehabilitation and biodiversity activities
Change in cost estimates
Unwinding of discount
Balance at 30 June 2021
Current
Non-current
Balance at 30 June
80 | Whitehaven Coal Annual Report 2021
$’000
270,127
(17,857)
(33,327)
3,269
222,212
2020
$’000
10,083
260,044
270,127
2021
$’000
18,423
203,789
222,212
Under the terms of its mining licenses and project approvals, the Group is required to comply with certain rehabilitation
and biodiversity obligations. The Group maintains provisions for these rehabilitation and biodiversity requirements. The
Group continues to assess estimates of these obligations as further developments occur and additional commitments
arise that may be required to settle its obligations. However, based on current estimates, any potential changes to these
obligations and commitments in addition to those already recognised in the financial statements are not financially
significant to the Group.
Recognition and measurement
Provisions are recognised when:
− The Group has a present legal or constructive
obligation as a result of a past event
− It is probable that resources will be expended to
settle the obligation
− The amount of the provision can be measured
reliably.
Mine rehabilitation and closure
Provisions are made for the estimated cost of
rehabilitation relating to areas disturbed during the
mine’s operation up to reporting date but not yet
rehabilitated. The nature of rehabilitation activities
includes dismantling and removing operating facilities,
recontouring and topsoiling the mine, and restoration,
reclamation and revegetation of affected areas.
Provision has been made in full for all disturbed areas at
the reporting date based on current estimates of costs
to rehabilitate such areas, discounted to their present
value based on expected future cash flows.
The obligation to rehabilitate arises at the
commencement of the mining project and/or when the
environment is disturbed at the mining location. At this
point, the provision is recognised as a liability with a
corresponding asset included in mining property and
development assets. Additional disturbances or changes
in the rehabilitation costs are reflected in the present
value of the rehabilitation provision, with a
corresponding change in the cost of the associated
asset. In the event the restoration provision is reduced,
the cost of the related asset is reduced by an amount
not exceeding its carrying value.
The unwinding of the effect of discounting the provision
is recorded as a finance cost in the consolidated
statement of comprehensive income. The carrying
amount capitalised as a part of mining property and
development assets is depreciated over the useful life of
the related asset.
For closed mines, changes to estimated costs are
recognised immediately in the consolidated statement
of comprehensive income.
The amount of the provision relating to rehabilitation of
environmental disturbance caused by ongoing
production and extraction activities is recognised in the
consolidated statement of comprehensive income as
incurred.
Biodiversity obligations
The Group has, under the terms of certain mining
licenses, obligations to perform works to establish or
upgrade biodiversity offset areas and to set aside and
maintain those areas. Provisions are made for the
estimated cost of the Group’s biodiversity obligations
based on current estimates of certain activities that the
Group has committed to perform. These costs are
discounted to their present value based on expected
future cash flows. The provision is recognised as a
liability with a corresponding asset included in mining
property and development assets. The unwinding of the
effect of discounting the provision is recorded as a
finance cost in the consolidated statement of
comprehensive income. The carrying amount capitalised
as a part of mining property and development is
depreciated via the units of production method.
Significant accounting judgements, estimates and assumptions
Significant estimates and assumptions are made in determining the provision for mine rehabilitation and biodiversity
as there are numerous factors that will affect the ultimate liability payable. These factors include estimates of the
extent and costs of rehabilitation activities and biodiversity, technological changes, regulatory changes, cost
increases and changes in discount rates. Those uncertainties may result in future actual expenditure differing from
the amounts currently provided. The provisions at balance date represent management’s best estimate of the present
value of the future rehabilitation and biodiversity costs required.
Whitehaven Coal Annual Report 2021 | 81
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing
5.1. Interest-bearing liabilities
Current liabilities
Lease liabilities
Secured loans – ECA facility
Capitalised borrowing costs
Non-current liabilities
Senior bank facility
Lease liabilities
Secured loans – ECA facility
Capitalised borrowing costs
2021
$’000
72,191
9,796
(6,871)
75,116
688,000
190,729
48,200
(9,332)
917,597
992,713
2020
$’000
81,977
11,908
(12,332)
81,553
638,000
264,628
56,207
(15,827)
943,008
1,024,561
Financing facilities
Facilities utilised at reporting date
1,320,916
1,414,720
1,008,916
1,052,720
Facilities not utilised at reporting date
312,000
362,000
Financing activities during the financial year
During the current year, $60 million of debt drawn under the senior bank facility was repaid (30 June 2020: $120 million)
and $110 million was redrawn (30 June 2020: $598 million). The Group repaid $10.1 million of the ECA facility during the
year (30 June 2020: $11.9 million) and $nil was drawn down (30 June 2020: $51.7 million). The senior bank facility and the
ECA facilities are secured via a fixed and floating charge over the majority of the Group’s assets. Under the facility, the
Group is subject to compliance with gearing, net worth and interest coverage financial covenants.
Included within current and non-current lease liabilities are leases recognised in accordance with AASB 16 Leases of
$33,743,000 and $55,244,000 respectively (30 June 2020: $39,605,000 and $90,708,000 respectively). Lease liabilities
are secured over the leased assets to which they relate.
The fair values of loans and borrowings materially approximate their respective carrying values as at 30 June 2021 and 30
June 2020.
Recognition and measurement
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method.
Refer to note 4.1 for the recognition and measurement policy for lease liabilities.
82 | Whitehaven Coal Annual Report 2021
5.2. Finance income and expense
Recognised in the statement of comprehensive income
Interest income
Finance income
Interest expense on lease liabilities
Interest on drawn debt facility
Other financing costs
Interest and financing costs
Net interest expense
Unwinding of discounts on provisions
Amortisation of finance facility upfront costs
Modification gain on senior debt facility1
Other finance expenses
Net finance expense
Recognised directly in equity
Net change in cash flow hedges
Income tax effect
Finance (expense)/income recognised directly in other comprehensive income, net of tax
2021
$’000
228
228
(11,906)
(20,865)
(13,100)
(45,871)
(45,643)
(3,269)
(13,102)
-
(16,371)
2020
$’000
957
957
(11,786)
(13,209)
(11,942)
(36,937)
(35,980)
(4,297)
(7,446)
8,673
(3,070)
(62,014)
(39,050)
(15,146)
4,544
(10,602)
10,289
(3,087)
7,202
1 During the year ended 30 June 2020, the Group refinanced its senior debt facility. In accordance with AASB 9, the net present value of the financial liability is required
to be recalculated when the contractual terms are renegotiated or otherwise modified. As the net present value of the financial liability did not change by more than
10%, a gain on modification was recognised in the consolidated statement of comprehensive income.
Recognition and measurement
Finance income comprises interest income on funds invested and foreign currency gains. Interest income is
recognised as it accrues, using the effective interest method.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the
fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and
losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in the
consolidated statement of comprehensive income using the effective interest method, except where capitalised as
part of a qualifying asset.
Foreign currency gains and losses are reported on a net basis.
Whitehaven Coal Annual Report 2021 | 83
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.3. Financial risk management objectives and policies
a) Overview
The Group’s overall risk management program seeks to mitigate risks and reduce the volatility of its financial
performance. Financial risk management is carried out centrally by Group Treasury and monitored by the Group’s Audit
and Risk Management Committee under policies approved by the Board of Directors. The Committee reports regularly to
the Board on its activities and also reviews policies and systems regularly to reflect changes in market conditions and the
Group’s activities.
The Group’s principal financial risks are associated with:
− Market risk
− Credit risk
− Liquidity risk.
b) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Group defines capital as the total of shareholders’ equity and debt. The
Board manages its capital structure and makes adjustments in light of changes to economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders, seek waivers or restructure its arrangements with its financiers
or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net
debt.
There were no changes in the Group’s approach to capital management during the year.
The Group’s gearing ratio is calculated as net debt divided by total equity plus net debt.
Interest-bearing liabilities
Less cash and cash equivalents
Net debt
Equity
Equity and net debt
Gearing ratio1
2021
$’000
992,713
(95,202)
897,511
2,705,738
3,603,249
25%
2020
$’000
1,024,561
(106,760)
917,801
3,249,590
4,167,391
22%
1 Calculated including lease liabilities under AASB 16 Leases of $88,987,000 (2020: $130,313,000).
c) Risk exposures and responses
Market risk - foreign currency risk
The Group is exposed to currency risk on sales, purchases and demurrage that are denominated in a currency other than
the respective functional currency of the Group, the Australian dollar (AUD). The currency in which these transactions
primarily are denominated is US dollars (USD).
The Group may use forward exchange contracts (FECs) to hedge its currency risk in relation to contracted sales where
both volume and US dollar price are fixed.
In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net
exposure is kept to an acceptable level by buying and selling foreign currencies at spot rates when necessary to address
short-term imbalances.
84 | Whitehaven Coal Annual Report 2021
During the current year ended 30 June 2021, a net foreign exchange loss of $4.3 million was recognised (30 June 2020:
net foreign exchange loss of $3.5 million).
The Group designates its forward exchange contracts in cash flow hedges and measures them at fair value.
The fair value of forward exchange contracts used as hedges at 30 June 2021 was a $7.7 million liability (30 June 2020:
$7.5 million asset), comprising assets and liabilities that were recognised as derivatives.
At 30 June 2021, the Group had the following financial instruments that were not designated in cash flow hedges that
were exposed to foreign currency risk:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net statement of financial position exposure
The following exchange rates applied during the year:
Fixed-rate instruments
USD
Sensitivity analysis
2021
$’000
USD
19,310
28,159
(8,416)
39,053
2020
$’000
USD
17,082
12,675
(4,855)
24,902
Average rate
Reporting date spot rate
2021
0.7468
2020
0.6714
2021
0.7518
2020
0.6863
A change of 10% in the Australian dollar against the following currencies at 30 June would have increased/(decreased)
equity and pre-tax profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular
interest rates, remain constant.
30 June 2021
AUD:USD strengthening by 10%
AUD:USD weakening by 10%
30 June 2020
AUD:USD strengthening by 10%
AUD:USD weakening by 10%
Equity
Profit or (loss)
$’000
$’000
7,916
(9,634)
(2,674)
3,268
(4,722)
5,772
(3,299)
4,032
Whitehaven Coal Annual Report 2021 | 85
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.3 Financial risk management objectives and policies (cont.)
c) Risk exposures and responses (cont.)
Market risk - interest rate risk
The Group‘s borrowings comprise both variable and fixed rate instruments. The variable rate borrowings expose the
Group to the risk of changes in cash flows due to the changes in interest rates. Management analyses interest rate
exposure on an ongoing basis.
The interest rate profile of the Group‘s interest-bearing financial instruments at the reporting date was:
Fixed rate instruments
Lease liabilities
Variable rate instruments
Financial assets
Financial liabilities
Net exposure
Carrying amount
2021
$’000
2020
$’000
(262,920)
(346,605)
(262,920)
(346,605)
95,202
(745,996)
106,760
(706,116)
(650,794)
(599,356)
(913,714)
(945,961)
Sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates,
remain constant.
30 June 2021
100bp increase
100bp decrease
30 June 2020
100bp increase
100bp decrease
Equity
Profit or (loss)
$’000
$’000
-
-
-
-
(6,508)
6,508
(5,994)
5,994
Market risk - commodity price risk
The Group’s major commodity price exposure is to the price of coal. The Group has chosen not to hedge against the
movement in coal prices.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its financial assets, including trade receivables,
deposits with banks and other financial institutions, foreign exchange transactions and other financial instruments.
Maximum exposure is equal to the carrying amount of the financial assets, as outlined below.
86 | Whitehaven Coal Annual Report 2021
Exposure to credit risk
The Group’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Investments
Note
3.1
5.3(d)
Carrying amount
2021
$’000
95,202
95,715
-
37
190,954
2020
$’000
106,760
97,435
8,286
37
212,518
The Group’s maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Asia
Australia
Europe
Trade receivables
84,405
11,310
76,713
7,198
-
13,524
95,715
97,435
The Group‘s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the Group’s customer base, including the default risk of the industry and country in which customers
operate, has less of an influence on credit risk. Approximately 40.5% of the Group’s revenue is attributable to sales
transactions with three customers (2020: 28.1% with three customers).
The Group trades only with recognised, creditworthy third parties and generally does not require collateral with respect
to trade receivables.
Receivable balances are monitored on an ongoing basis and as a result the exposure to bad debts is not significant.
The Group recognised an impairment loss for trade receivables of $nil during the year ended 30 June 2021 (2020: $nil).
The aging of the Group’s trade receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days to one year
More than one year
Gross
2021
$’000
91,517
3,958
240
-
-
95,715
Gross
2020
$’000
95,953
1,351
131
-
-
97,435
Whitehaven Coal Annual Report 2021 | 87
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.3 Financial risk management objectives and policies (cont.)
c) Risk exposures and responses (cont.)
Guarantees
The policy of the Group is to provide bank guarantees for bonding requirements associated with mining operations,
infrastructure assets and other purposes such as security of leased premises. Guarantees are provided under the senior
secured bank facility, secured bilateral bank guarantee facilities and unsecured bank facilities. Details of outstanding
guarantees are provided in note 7.4.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet all expected operational expenses as and
when due, including the servicing of financial obligations. This excludes the potential impact of extreme circumstances
that cannot reasonably be predicted, such as natural disasters.
The following are the contractual undiscounted maturities of financial liabilities, including estimated interest payments:
30 June 2021
Carrying
amount
Contractual
cash flows
6 months
or less
6-12
months
1-2 years
2-5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Financial liabilities
Lease liabilities
Senior bank facility
Secured loans
Trade and other payables
Forward exchange contracts:
Outflow
Inflow
Financial liabilities
Lease liabilities
Senior bank facility
Secured loans
Trade and other payables
Forward exchange contracts:
Outflow
Inflow
262,920
688,000
57,996
277,537
300,961
42,754
38,588
76,453
103,441
39,725
688,000
-
61,463
5,593
279,843
231,602
-
5,212
-
-
688,000
10,298
16,115
27,243
32,126
209,885
209,957
157,715
4,001
16,115
32,126
(202,200)
(202,200)
(154,210)
(3,984)
(14,669)
(29,337)
1,294,138
1,338,024
283,454
43,817
104,312
853,599
52,842
30 June 2020
Carrying
amount
Contractual
cash flows
6 months
or less
6-12
months
1-2 years
2-5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
$’000
$’000
346,605
638,000
68,115
251,585
396,920
47,169
47,090
83,203
176,637
42,821
638,000
-
-
-
638,000
74,113
5,796
5,805
254,015
189,597
-
11,099
16,176
30,170
48,242
-
13,117
-
-
-
-
21,243
-
-
-
150,862
149,360
107,160
26,267
15,933
(158,403)
(158,403)
(113,969)
(28,258)
(16,176)
-
-
1,296,764
1,354,005
235,753
50,904
110,235
893,049
64,064
88 | Whitehaven Coal Annual Report 2021
d) Net fair values
The following table provides the fair value measurement hierarchy of the Group’s financial assets and financial liabilities
as at 30 June 2021 and 30 June 2020.
− Level 1: measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities
− Level 2: measurements based on inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices)
− Level 3: measurements based on inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The Group held the following financial instruments carried at fair value in the consolidated statement of financial position:
Assets measured at fair value
Equity shares
Forward exchange contracts - receivable
Liabilities measured at fair value
Forward exchange contracts - payable
Assets measured at fair value
Equity shares
Forward exchange contracts - receivable
Liabilities measured at fair value
Forward exchange contracts - payable
30 June 2021
$’000
Level 1
$’000
Level 2
$’000
Level 3
$’000
37
----
37
(7,685)
(7,685)
-
-
-
-
-
30 June 2020
$’000
Level 1
$’000
37
8,286
8,323
(824)
(824)
-
-
-
-
-
-
-
-
(7,685)
(7,685)
Level 2
$’000
-
8,286
8,286
(824)
(824)
37
-
37
-
-
Level 3
$’000
37
-
37
-
-
The fair value of derivative financial instruments are derived using valuation techniques based on observable market
inputs, such as forward currency rates, at the end of the reporting period. The amounts disclosed in the consolidated
statement of financial position are the fair values and are classified under level 2 in the fair value measurement hierarchy.
During the period the Group entered into forward exchange contracts to hedge some foreign exchange risk. A number of
these contracts remained open at 30 June 2021.
The carrying values of financial assets and financial liabilities recorded in the financial statements materially approximates
their respective net fair values, determined in accordance with the accounting policies disclosed in notes 3.1, 3.3 and 5.1 to
the financial statements.
Whitehaven Coal Annual Report 2021 | 89
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.3 Financial risk management objectives and policies (cont.)
e)
Financial assets and liabilities by categories
Financial assets
Cash and cash equivalents
Trade and other receivables
Investments
Other financial assets1
Total financial assets
2021
Amortised
cost
Note
$’000
3.1
5.3(d)
95,202
165,948
-
-
261,150
1 Other financial assets at 30 June 2020 include $8.3 million relating to derivatives in designated hedges.
Financial liabilities
Trade and other payables
Loans and borrowings
Other financial liabilities2
Total financial liabilities
2021
Amortised
cost1
Note
$’000
3.3
5.1
5.3(d)
277,537
992,713
-
1,270,250
2020
Amortised
cost
$’000
106,760
138,853
-
-
245,613
2020
Amortised
cost1
$’000
251,585
1,024,561
-
1,276,146
Other1
$’000
37
-
37
Other2
$’000
-
-
7,685
7,685
Other1
$’000
-
-
37
8,286
8,323
Other2
$’000
-
-
824
824
1
Loans at amortised cost are non-derivatives with fixed or determinable payments and are not quoted on an active market. Loans and payables are valued at amortised
cost.
2 Other financial liabilities include $7.7 million (2020: $0.8 million) relating to derivatives in designated hedges.
f)
Changes in liabilities arising from financing activities
As at 1 July
Outflows from secured loans
Outflows from lease liabilities
Net inflows from senior bank facility
Increase in secured loans
(Decrease)/increase in lease liabilities
As at 30 June
Consisting of:
Current loans and borrowings1
Non-current loans and borrowings2
1 Current loans and borrowings does not include capitalised borrowing costs of $6,871,000 (2020: $12,332,000)
2 Non-current loans and borrowings does not include capitalised borrowing costs of $9,332,000 (2020: $15,827,000).
The Group classifies interest paid as cash flows from operating activities.
90 | Whitehaven Coal Annual Report 2021
30 June 2021
30 June 2020
$’000
1,052,720
(10,119)
(82,738)
50,000
-
(947)
$’000
429,876
(11,908)
(79,768)
478,000
51,671
184,849
1,008,916
1,052,720
81,987
926,929
93,885
958,835
Recognition and measurement
Financial assets
Derivatives and hedge accounting:
The Group classifies its financial assets into the following
categories: those to be measured subsequently at fair
value (either through other comprehensive income, or
profit or loss) and those to be held at amortised cost.
Classification depends on the business model for
managing the financial assets and the contractual terms
of the cash flows.
At initial recognition, the Group measures a financial
asset at its fair value.
The Group uses derivative financial instruments to
hedge its risks associated with foreign currency and
interest rate fluctuations arising from operating
activities. Such derivative financial instruments are
initially recognised at fair value as at the date on which a
derivative contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.
Financial liabilities
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or derivatives
designated as hedging instruments.
All financial liabilities are recognised initially at fair value.
The Group’s financial liabilities include trade and other
payables, loans and borrowings and derivative financial
instruments.
Cash flow hedges:
The effective portion of the gain or loss on the hedging
instrument is recognised in other comprehensive income
in the cash flow hedge reserve. To the extent that the
hedge is ineffective, changes in fair value are recognised
in profit or loss. Amounts taken to other comprehensive
income are transferred out of other comprehensive
income and included in the measurement of the hedged
transaction when the forecast transaction occurs. Hedge
accounting is discontinued prospectively when a
hedging instrument expires, or is sold or terminated, or
when a hedge no longer meets the criteria for hedge
accounting. The cumulative gain or loss previously
recognised in other comprehensive income remains in
other comprehensive income until the forecast
transaction occurs.
5.4. Share capital and reserves
a)
Share capital
2021
2020
Number of shares
$’000 Number of shares
$’000
Fully paid ordinary share capital
1,032,644,232
3,013,661
1,026,045,885
3,003,964
Ordinary share capital at the beginning of the period
1,026,045,885
3,003,964
1,026,045,885
2,980,933
Shares issued
Transfer of shares by share plan
Shares purchased by share plan
6,598,347
-
-
6,268
4,766
(1,337)
-
-
-
-
26,392
(3,361)
Ordinary share capital at the end of the period
1,032,644,232
3,013,661
1,026,045,885
3,003,964
At 30 June 2021, a trust on behalf of the Company held 4,123 ordinary fully paid shares in the Company (30 June 2020: 1,591,838). During the year, 2,469,543 of these shares
were transferred to performance rights plan recipients and 881,828 purchased by the share plan. These were purchased during the year for the purpose of allowing the
Group to satisfy performance rights to certain management of the Group. Refer to note 5.5 for further details on the performance rights plan.
Whitehaven Coal Annual Report 2021 | 91
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.4 Share capital and reserves (cont.)
Terms and conditions of issued capital
Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share (either in person or by proxy)
at a meeting of the Company and carry the right to receive dividends as declared. In the event of a winding up of the
Company, fully paid ordinary shares carry the right to participate in the proceeds from the sale of all surplus assets in
proportion to the number of and amounts paid up on shares held. Under the terms of the acquisition of Boardwalk
Resources Limited, 34,020,000 ordinary shares are subject to a restriction deed, which removes their entitlement to vote,
receive dividends as declared or participate in the proceeds from the sale of all surplus assets. These restrictions will be
released on reaching certain milestones.
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction
from equity, net of any related income tax benefit.
b) Nature and purpose of reserves
Hedge reserve
The hedging reserve comprises the effective portion of the cumulative change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments provided to Director-related
entities and senior employees under share option and long-term incentive plans. Refer to note 5.5 for further details of
these plans.
c) Dividends
There were no dividends paid to shareholders during the year ended 30 June 2021 (2020: $312,197,000).
The Directors resolved not to pay a final dividend with respect to the year ended 30 June 2021.
Dividend franking account
As at 30 June 2021, $nil franking credits were available to shareholders of Whitehaven Coal Limited (30 June 2020: $0.2
million).
5.5. Share-based payments
a) Recognised share-based payment expenses
Employee expenses
Share options and performance rights – senior employees
Recognition and measurement:
2021
$’000
6,995
2020
$’000
6,259
The grant date fair value of options and performance rights granted to employees is recognised as an expense, with
a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the
equity instruments. The amount recognised is adjusted to reflect the actual number of instruments that vest, except
for those that fail to vest due to market conditions not being met. Once the instruments have vested, no further
expenses are recognised nor reserves reversed in respect to costs already charged. However, where the share rights
or options have lapsed after vesting, the Group transfers the equivalent amount of the cumulative cost for the lapsed
awards from the share-based payments reserve to another component of equity.
92 | Whitehaven Coal Annual Report 2021
b) Types of share-based payment plans
Performance right and option grant to CEO and senior employees
The Company issued performance rights to the CEO and senior employees under the Company’s medium and long-term
incentive (MTI and LTI) programs in FY20 and FY21. The terms and conditions of the grant are as follows:
Performance rights
MTI
LTI tranche 1
LTI tranche 2
LTI tranche 3
LTI tranche 4
Total
2021
2020
Number of
instruments
Vesting date
Number of
instruments
Vesting date
2,948,107
30 June 2023
1,173,680
30 June 2022
909,933
30 June 2023
492,613
30 June 2022
909,928
30 June 2024
492,595
30 June 2023
2,305,625
30 June 2023/241
985,190
30 June 2022/231
485,768
30 June 2024
-
-
7,559,361
3,144,078
1 To the extent that the Costs Hurdle Award is satisfied at the end of the year of testing, 50% of the awards will vest and become exercisable immediately and the
remaining 50% will continue on foot, subject to a further one year service condition.
The performance rights are subject to a performance measure linked to relative total shareholder return (TSR), a Costs
Hurdle and a Strategic Priority Delivery (SPD) metric. The TSR performance measure compares the TSR performance of
the Company with the TSR performance of the S&P ASX 100 index. The Costs Hurdle performance measure relates to the
Company achieving a cost per tonne target referenced to the industry first quartile. The SPD performance measure
drives a focus on the efficient delivery of long-term projects that directly impact shareholder value. The Company must
also achieve positive TSR performance before any vesting of SPD rights. Detailed disclosures of LTI outcomes against the
target are provided in the Remuneration Report.
The table below details the outcomes of MTI awards that were tested in FY21 (or for which the test period concluded on
30 June 2021) and the results of the relevant test:
MTI Year
Test Type
2018
2018
Relative TSR
Costs Target Hurdle
Performance
10th percentile
$74/tonne
Outcomes
Vested
0%
0%
Lapsed
100%
100%
c) Movement in options and performance rights
The following table illustrates the number and weighted average exercise prices of, and movements in, options and
performance rights during the year:
Outstanding at beginning of period
Exercised during the period
Granted during the period
Forfeited during the period
Lapsed during the period
Outstanding at 30 June
Exercisable at 30 June
Weighted
average
exercise price
Number of
options/rights
Weighted
average
exercise price
Number of
options/rights
2021
$0.59
$0.00
$0.00
$0.19
$1.34
$0.17
$0.92
2021
14,230,664
(2,605,673)
8,338,2271
(1,606,826)
(4,177,875)
14,178,517
1,095,626
2020
$0.64
$0.32
$0.00
$0.00
$0.66
$0.59
$0.00
2020
20,646,332
(5,200,653)
3,781,5542
-
(4,996,569)
14,230,664
1,012,730
1
2
Includes 643,067 performance rights granted during the year under the FY20 STI scheme.
Includes 637,476 performance rights granted during the year under the FY19 STI scheme.
Whitehaven Coal Annual Report 2021 | 93
Notes to the consolidated financial statements
For the year ended 30 June 2021
5. Capital structure and financing (cont.)
5.5 Share-based payments (cont.)
c) Movement in options and performance rights (cont.)
The outstanding balance as at 30 June 2021 is represented by:
Options/performance rights over ordinary shares
Number
Exercise price
Dates excercisable between
Options
Options
Performance rights
Performance rights
Performance rights
Performance rights
Performance rights
Performance rights
Outstanding at 30 June 2021
830,531
508,904
104,388
119,560
344,099
1,448,273
3,065,775
7,756,987
14,178,517
$1.21
$2.85
$nil
$nil
$nil
$nil
$nil
$nil
30 June 2021 - 31 August 2021
30 June 2021 - 27 October 2022
30 June 2021 - 13 August 2025
30 June 2021 - 31 August 2026
30 June 2021 - 27 October 2027
30 June 2021 - 27 October 2028
30 June 2021 - 28 October 2029
26 August 2021 - 31 October 2030
During the year ended 30 June 2021, nil share options and 2,605,673 performance rights were exercised (2020: 1,360,181
share options and 3,840,472 performance rights).
The weighted average remaining contractual life of share options and performance rights outstanding at 30 June 2021 is
7.9 years (2020: 6.3 years).
94 | Whitehaven Coal Annual Report 2021
d) Option pricing models
The fair value of performance rights granted under the LTI and MTI programs with a TSR performance hurdle is measured
using a Monte Carlo simulation model incorporating the probability of the performance hurdles being met. The fair value
of performance rights with the non-market performance hurdle (costs target) is measured using the Black-Scholes option
pricing formula.
The fair value of options with a TSR performance hurdle and non-market performance hurdle is measured using a
combination of the Monte Carlo simulation model and Binomial Option Pricing methods.
The following table lists the inputs to the models used for the years ended 30 June 2021 and 30 June 2020:
2021
Performance hurdle
Grant date
Vesting date
Fair value at grant date
Share price
Expected volatility
Performance right life
Risk-free interest rate
2020
Performance hurdle
Grant date
Vesting date
Fair value at grant date
Share price
Expected volatility
Rights
MTI
TSR
MTI
Cost
LTI
TSR
LTI
TSR
LTI
Cost
LTI
LTI
Cost TSR/Strategic
Objectives
4 Dec 20
4 Dec 20
4 Dec 20
4 Dec 20
4 Dec 20
4 Dec 20
4 Dec 20
30 Jun 23
30 Jun 23
30 Jun 23
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 24
$0.91
$1.61
40%
$1.61
$1.61
40%
$0.91
$1.61
40%
$0.97
$1.61
40%
$1.61
$1.61
40%
$1.61
$1.61
40%
$1.09
$1.61
40%
10 years
10 years
10 years
10 years
10 years
10 years
10 years
0.12%
0.12%
0.12%
0.14%
0.12%
0.14%
0.14%
MTI
TSR
MTI
Cost
Rights
LTI
TSR
LTI
TSR
LTI
Cost
LTI
Cost
15 Nov 19
15 Nov 19
15 Nov 19
15 Nov 19
15 Nov 19
15 Nov 19
30 Jun 22
30 Jun 22
30 Jun 22
30 Jun 23
30 Jun 22
30 Jun 23
$1.98
$3.15
30%
$3.43
$3.15
30%
$1.99
$3.15
30%
$2.10
$3.15
30%
$3.43
$3.15
30%
$3.43
$3.15
30%
Performance right life
10 years
10 years
10 years
10 years
10 years
10 years
Risk-free interest rate
0.8%
0.8%
0.8%
0.8%
0.8%
0.8%
All share-based payments for existing employees are equity settled.
Whitehaven Coal Annual Report 2021 | 95
Notes to the consolidated financial statements
For the year ended 30 June 2021
6. Group structure
6.1. Group’s subsidiaries
The below is a list of the Group’s subsidiaries, all of which are incorporated in Australia unless otherwise noted:
Ownership interest
2021
2020
Ownership interest
2021
2020
Parent entity
Whitehaven Coal Limited
Subsidiaries
Whitehaven Coal Mining Limited1
100%
100% Maules Creek Coal Pty Ltd1
Namoi Mining Pty Ltd1
100%
100% Boardwalk Resources Limited1
Namoi Agriculture & Mining Pty Ltd
100%
100% Boardwalk Coal Management Pty Ltd1
Betalpha Pty Ltd1
100%
100% Boardwalk Coal Marketing Pty Ltd1
Tarrawonga Coal Pty Ltd1
100%
100% Boardwalk Sienna Pty Ltd1
Tarrawonga Coal Sales Pty Ltd2
100%
100% Boardwalk Monto Pty Ltd1
Whitehaven Coal Holdings Pty Ltd1
100%
100% Boardwalk Dingo Pty Ltd1
Whitehaven Coal Infrastructure Pty Ltd1
100%
100% Boardwalk Ferndale Pty Ltd1
Narrabri Coal Australia Pty Ltd2
100%
100% Coalworks Limited1
Narrabri Coal Pty Ltd1
100%
100% Yarrawa Coal Pty Ltd1
Narrabri Coal Operations Pty Ltd1
100%
100%
Loyal Coal Pty Ltd
Narrabri Coal Sales Pty Ltd1
100%
100% Ferndale Coal Pty Ltd
Creek Resources Pty Ltd1
100%
100% Coalworks (Oaklands North) Pty Ltd1
Werris Creek Coal Sales Pty Ltd1
100%
100% CWK Nominees Pty Ltd1
Werris Creek Coal Pty Ltd1
100%
100% Oaklands Land Pty Ltd1
WC Contract Hauling Pty Ltd1
100%
100% Coalworks (Vickery South) Pty Ltd1
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
92.5%
92.5%
92.5%
92.5%
100%
100%
100%
100%
100%
100%
100%
100%
Whitehaven Blackjack Pty Ltd1
100%
100% Coalworks Vickery South Operations Pty Ltd1
100%
100%
Whitehaven Project Pty Ltd1
100%
100% Vickery South Marketing Pty Ltd1
Whitehaven Employee Share Plan Pty Ltd1
100%
100% Vickery South Operations Pty Ltd1
Whitehaven WS Pty Ltd2
Aston Resources Limited1
Aston Coal 2 Pty Ltd1
Aston Coal 3 Pty Ltd1
100%
100% Vickery South Pty Ltd1
100%
100% Vickery Coal Pty Ltd2
100%
100% Winchester South WS Pty Ltd
100%
100% Winchester South Coal Operations Pty Ltd2
100%
100%
1 These subsidiaries entered into a Class Instrument 2016/785 dated 28 September 2016 and related deed of cross guarantee with Whitehaven Coal Limited. Refer to
Note 6.4 for further information.
2 These subsidiaries entered into a Class Instrument 2016/785 dated 24 June 2020 and related deed of cross guarantee with Whitehaven Coal Limited. Refer to Note 6.4
for further information.
96 | Whitehaven Coal Annual Report 2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Recognition and measurement
Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed to, or has rights to,
variable returns from its involvement with an entity and has the ability to affect those returns through its power over
the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date
on which control commences until that control ceases. All intercompany balances and transactions have been
eliminated in preparing the consolidated financial statements.
6.2. Interest in joint operations
The Group has interests in the following joint operations that are measured in accordance with the terms of each
arrangement, which are in proportion to the Group’s interest in each asset, liability, income and expense of the joint
operations:
Narrabri Coal Joint Venture1
Maules Creek Joint Venture1
Dingo Joint Venture1
Ferndale Joint Venture1
Boggabri-Maules Creek Rail Spur Joint Venture1
Maules Creek Marketing Pty Ltd2
Boggabri-Maules Creek Rail Pty Ltd2
Country of incorporation
Australia
Australia
Ownership interest and voting rights
2021
77.5%
75%
70%
92.5%
39%
75%
39%
2020
77.5%
75%
70%
92.5%
39%
75%
39%
1 These entities have been classified as joint operations under AASB 11 Joint Arrangements, as these joint arrangements are not structured through separate vehicles.
2 The joint operations above operate as the sales and marketing vehicles or manager of the related unincorporated joint operations and require joint consent from all joint
venture partners on all significant management and financial decisions. The Group recognises its share of assets, liabilities, revenues and expenses of the above entities
as joint operations under AASB 11 Joint Arrangements.
Recognition and measurement
Joint arrangements are arrangements in which two or more parties have joint control. Joint control is the
contractually agreed sharing of control over an arrangement, which exists only when decisions about relevant
strategic and/or key operating decisions require the unanimous consent of the parties sharing control.
The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and
expenses arising jointly or otherwise from those operations, and its revenue derived from the sale of its share of
goods and services from the joint operation. All such amounts are measured in proportion to the Group’s interest in
the joint operation.
Significant accounting judgements, estimates and assumptions
The Group assesses whether it has the power to direct the relevant activities of the investee by considering the rights
it holds with respect to the work program and budget approval, investment decision approval, voting rights in joint
operating committees and changes to joint arrangement participant holdings. Where the Group has joint control,
judgement is also required to assess whether the arrangement is a joint operation or a joint venture.
Whitehaven Coal Annual Report 2021 | 97
Notes to the consolidated financial statements
For the year ended 30 June 2021
6. Group structure (cont.)
6.3. Parent entity information
Information relating to Whitehaven Coal Limited
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Share-based payments reserve
Total shareholders’ equity
Loss of the parent entity1
Total comprehensive loss of the parent entity
Company
2021
$’000
302,100
2020
$’000
315,415
2,759,914
3,406,886
-
-
3,142,664
(394,963)
12,213
-
-
3,136,412
255,221
15,253
2,759,914
3,406,886
(654,191)
(654,191)
(3,950)
(3,950)
1
Included within the loss for the year ended 30 June 2021 is a charge of $650 million (FY20: $nil) relating to impairment of investments in subsidiaries. Refer to note 2.2
for details of impairment of the underlying assets.
6.4. Deed of cross guarantee
Pursuant to ASIC Corporations Instrument 2016/785 dated 28 September 2016, the wholly owned subsidiaries listed in
Note 6.1 (refer footnote 1) are relieved from the Corporations Act 2001 (Cth) requirements for the preparation, audit and
lodgement of financial reports, and directors’ reports.
It is a condition of the Class Order that the Company and each of the subsidiaries enter into a deed of cross guarantee
(the ‘Deed’). The effect of the Deed is that the Company guarantees to each creditor payment of any debt in full in the
event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001 (Cth). If a winding up
occurs under other provisions of the Corporations Act 2001 (Cth), the Company will only be liable in the event that after
six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the
Company is wound up.
The Company and each of the relevant subsidiaries entered into the Deed on 27 June 2008 with subsequent assumption
deeds entered into on 27 June 2012, 25 June 2013 and 24 June 2020.
The following consolidated statement of comprehensive income and statement of financial position comprises the
Company and its controlled entities which are party to the Deed (‘Closed Group’) after eliminating all transactions
between parties to the Deed.
98 | Whitehaven Coal Annual Report 2021
Statement of comprehensive income
(Loss)/profit before tax
Income tax benefit/(expense)
(Loss)/profit after tax
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net movement on cash flow hedges
Income tax effect
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive (loss)/income for the period, net of tax
Statement of financial position
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivable
Derivative financial instruments
Total current assets
Trade and other receivables
Investments
Property, plant and equipment
Exploration and evaluation
Intangible assets
Total non-current assets
Total assets
Closed Group
2021
$’000
(768,195)
224,281
(543,914)
(15,146)
4,544
(10,602)
(554,516)
95,117
156,096
175,930
-
-
427,143
11,785
37
3,330,116
613,508
11,828
3,967,274
4,394,417
2020
$’000
40,830
(12,294)
28,536
10,289
(3,087)
7,202
35,738
106,636
131,117
175,593
13,180
8,286
434,812
9,708
37
4,154,697
591,343
22,946
4,778,731
5,213,543
Whitehaven Coal Annual Report 2021 | 99
Notes to the consolidated financial statements
For the year ended 30 June 2021
6. Group structure (cont.)
6.4 Deed of cross guarantee (cont.)
Statement of financial position
Liabilities
Trade and other payables
Interest-bearing liabilities
Employee benefits
Income tax payable
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Other payables
Interest-bearing liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Issued capital
Share-based payments reserve
Hedge reserve
Retained earnings
Equity
6.5. Related parties
Compensation to Executive KMP1 and Non-Executive Directors of the Group
Short-term employee benefits
Contributions to superannuation plans
Termination benefits
Share-based compensation payments
Total compensation
Closed Group
2021
$’000
231,265
75,116
31,926
-
18,423
3,485
360,215
46,269
917,597
155,055
203,789
4,200
1,326,910
1,687,125
2,707,292
3,011,261
12,213
(5,379)
(310,803)
2020
$’000
189,426
81,553
30,430
-
10,083
824
312,316
62,111
943,008
384,920
260,044
-
1,650,083
1,962,399
3,251,144
3,001,564
15,253
5,223
229,104
2,707,292
3,251,144
2021
$’000
5,052
172
-
2,028
7,252
2020
$’000
6,480
294
935
3,664
11,373
1 For the year ended 30 June 2021, there has been a change in which executives represent KMP of the Company from the prior year. Refer to the Remuneration Report
for further details.
100 | Whitehaven Coal Annual Report 2021
7. Other notes
7.1. Employee benefits
Consolidated statement of comprehensive income
Wages and salaries
Contributions to superannuation plans
Other associated personnel expenses
Increase in liability for annual leave
Increase/(decrease) in liability for long service leave
Share-based compensation payments
Consolidated statement of financial position
Salaries and wages accrued
Liability for long service leave
Liability for annual leave
2021
$’000
189,259
13,223
6,432
1,542
19
6,995
2020
$’000
186,490
12,265
7,847
3,062
(549)
6,259
217,470
215,374
9,497
337
22,092
31,926
9,562
318
20,550
30,430
Recognition and measurement
Wages, salaries, annual leave and sick leave
Liabilities for wages, salaries, annual leave and sick leave are recognised in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled – that is, at
undiscounted amounts based on remuneration wage and salary rates including related on-costs, such as workers’
compensation insurance and payroll tax.
Long-term service benefits
Liabilities for long service leave and other long-term benefits are recognised and measured at the present value of
the estimated future cash outflows resulting from employees’ services provided up to the reporting date. Long-term
benefits not expected to be settled within twelve months are discounted using the rates attached to high quality
corporate bonds at the reporting date, which most closely match the maturity dates of the related liability.
Defined contribution superannuation funds
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the
consolidated statement of comprehensive income as incurred.
Whitehaven Coal Annual Report 2021 | 101
Notes to the consolidated financial statements
For the year ended 30 June 2021
7. Other notes (cont.)
7.2. Auditor’s Remuneration
Auditors of the Company - Ernst & Young (Australia)
Fees to the auditor for
Audit and review of statutory financial statements of the parent covering the Group
Audit of joint operations
Other assurance services where there is discretion as to whether the service is provided by the
auditor or another firm
Review of National Greenhouse and Energy Reporting Act 2007 requirements
Other services
Taxation compliance services
Others
2021
$
573,028
326,972
2020
$
553,927
316,073
900,000
870,000
60,000
60,000
-
-
-
67,204
67,204
30,000
32,994
62,994
Total auditor’s remuneration
960,000
1,000,198
7.3. Commitments
a) Capital expenditure commitments
Contracted for but not provided for and payable:
Within one year1
1 There were no commitments for capital expenditure beyond one year.
2021
$’000
2020
$’000
10,027
8,773
102 | Whitehaven Coal Annual Report 2021
7.4. Contingencies
a) Bank guarantees
The Group provided bank guarantees to:
i)
ii)
iii)
iv)
v)
government departments as a condition of continuation of mining and exploration licences
rail capacity providers
port capacity providers
electricity network access supplier
other
2021
$’000
276,330
29,339
137,046
22,470
3,367
2020
$’000
257,877
27,936
135,220
22,470
10,785
468,552
454,288
b) Other
As previously reported, representative proceedings were commenced against the Group on 21 December 2018 in the
Supreme Court of Queensland by Nathan Tinkler as representative applicant. The proceedings were brought on behalf of
a number of parties who were issued with Milestone Shares (subject to restrictions on voting and transfer until various
development milestones are met) in Whitehaven Coal Limited in May 2012. The proceedings have since been transferred
to the Supreme Court of New South Wales and the representative applicant has been replaced by Les & Zelda
Investments Pty Ltd (ACN 148 907 573) as Trustee for the Les & Zelda Family Trust. The pleadings make various
allegations against the Group concerning an alleged breach of contract, misleading and deceptive conduct and minority
shareholder oppression in connection with the Milestone Shares. The Group has filed a defence that denies those
allegations. The proceedings are ongoing, and no trial date has yet been set.
Other than the above, there are a number of legal and potential claims against the Group that have arisen in the ordinary
course of business. The Group does not believe that these matters will result in any material adverse outcome based on
information currently available.
7.5. Subsequent events
In the interval between the end of the financial year and the date of this report there has not arisen any item, transaction
or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years, other
than the following:
Subsequent to the end of the financial period, the Group repaid a further $178 million of debt drawn under the senior
bank facility.
Whitehaven Coal Annual Report 2021 | 103
Directors’ declaration
Notes to the consolidated financial statements
For the year ended 30 June 2021
For the year ended 30 June 2021
In accordance with a resolution of the directors of Whitehaven Coal Limited, I state that:
In the opinion of the Directors:
(a) The financial statements and notes of Whitehaven Coal Limited are in accordance with the Corporations Act 2001
(Cth), including:
(i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its
performance for the year ended on that date, and
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001
(b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 1
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable
(d) This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 (Cth) for the financial year ending 30 June 2021
(e) As at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group
identified in note 6.4 will be able to meet any obligations or liabilities to which they are or may become subject, by
virtue of the Deed of Cross Guarantee.
On behalf of the Board
The Hon. Mark Vaile AO
Chairman
Paul Flynn
Managing Director
Sydney
26th August 2021
104 | Whitehaven Coal Annual Report 2021
Independent Auditor’s report
For the year ended 30 June 2021
Whitehaven Coal Annual Report 2021 | 105
Auditor’s report
For the year ended 30 June 2021
106 | Whitehaven Coal Annual Report 2021
Whitehaven Coal Annual Report 2021 | 107
Auditor’s report
For the year ended 30 June 2021
108 | Whitehaven Coal Annual Report 2021
Whitehaven Coal Annual Report 2021 | 109
ASX additional information
Auditor’s report
For the year ended 30 June 2021
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere
in this report is set out below.
Shareholdings
Substantial shareholders
The number of shares recorded as owned by substantial shareholders and their associates in the most recent substantial
shareholder notices advised to the Company by these shareholders are set out below:
Shareholder
Fritz Kundrun
Voting rights
Ordinary shares
Refer to note 5.4 in the financial statements
Options
There are no voting rights attached to the options.
Percentage of
capital held
Number of ordinary
shares held
Date of substantial
shareholder notice
6.73%
69,491,579
8 Apr 2021
Distribution of equity security holders
Category
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of equity
security holders
% of Units
5,522
8,067
3,167
3,920
318
0.29
2.10
2.38
10.62
84.61
20,994
100.00
There are 6 holders of options over ordinary shares.
The number of shareholders holding less than a
marketable parcel of ordinary shares is 1,014.
110 | Whitehaven Coal Annual Report 2021
Securities exchange
The Company is listed on the Australian Securities Exchange.
Other information
Whitehaven Coal Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Twenty largest shareholders (legal ownership)
Name
CITICORP NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
AET SFS PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
BRISPOT NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED GSCO ECA
INVIA CUSTODIAN PTY LIMITED
CS FOURTH NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BNP PARIBAS NOMS PTY LTD
WARBONT NOMINEES PTY LTD
This information is current as at 19 August 2021.
Number of
ordinary shares
held
Percentage of
capital held
229,667,010
217,785,203
115,914,121
49,543,498
28,186,620
26,678,979
19,774,227
14,733,260
12,508,995
11,909,556
9,424,759
8,912,768
5,366,292
4,970,068
4,409,572
3,100,889
3,078,456
2,769,463
2,667,009
2,570,161
22.24
21.09
11.22
4.80
2.73
2.58
1.91
1.43
1.21
1.15
0.91
0.86
0.52
0.48
0.43
0.30
0.30
0.27
0.26
0.25
773,970,906
74.95
Whitehaven Coal Annual Report 2021 | 111
Glossary
ARTC
Australian Rail Track Corporation
ASEAN
Association of Southeast Asian Nations
ASX
CHPP
Australian Securities Exchange
Coal Handling Preparation Plant
EBITDA
Earnings Before Interest Tax, Depreciation and Amortisation
ECA
FEC
FOB
Export Credit Agency
Forward Exchange Contract
Free-on-Board
FVLCD
Fair Value Less Costs of Disposal
FY19
FY20
FY21
HELE
JORC
KMP
KPI
kt
LTI
LW
m
Financial Year Ending 30 June 2019
Financial Year Ending 30 June 2020
Financial Year Ending 30 June 2021
High-Efficiency, Low-Emissions
Joint Ore Resources Committee
Key Management Personnel
Key Performance Indicator
Thousand Tonnes
Long-Term Incentive
Longwall
Million
MRRT
Minerals Resource Rent Tax
Mt
MTI
Mtpa
NCIG
NLAT
NPAT
Million Tonnes
Medium-Term Incentive
Million Tonnes Per Annum
Newcastle Coal Infrastructure Group
Net Loss After Tax
Net Profit After Tax
PWCS
Port Waratah Coal Services
ROM
SSCC
STI
Run-of-Mine
Semi-Soft Coking Coal
Short-Term Incentive
STRIVE
Safety Teamwork Respect Integrity Value Excellence
t
TCFD
TFR
TRIFR
TSR
Tonne
Task Force on Climate-related Financial Disclosures
Total Fixed Remuneration
Total Recordable Injury Frequency Rate
Total Shareholder Return
112 | Whitehaven Coal Annual Report 2020
Corporate directory
Directors
The Hon. Mark Vaile AO
Chairman
John Conde AO
Deputy Chairman
Dr Julie Beeby
Non-Executive Director
Registered and Principal
Administrative Office
Level 28, 259 George Street
Sydney NSW 2000
P +61 2 8222 1100
F +61 2 8222 1101
Australian Business Number
Share Registry
Computershare Investor
Services Pty Limited
GPO Box 2975 Melbourne
Victoria 3001 Australia
P 1300 855 080
(or +61 3 9415 4000)
ABN 68 124 425 396
Country of Incorporation
Paul Flynn
Managing Director and CEO
Stock Exchange Listing
Lindsay Ward
Non-Executive Director
Fiona Robertson
Non-Executive Director
Raymond Zage
Non-Executive Director
Company Secretary
Timothy Burt
Australian Securities
Exchange Limited
ASX Code: WHC
Auditor
Ernst & Young
Ernst & Young Centre
200 George Street,
Sydney NSW 2000
P +61 2 9248 5555
F +61 2 9248 5199
Australia
Web address
www.whitehavencoal.com.au
Whitehaven Coal
Level 28, 259 George Street
Sydney NSW 2000
P +61 2 8222 1100
ASX Code: WHC
whitehavencoal.com.au