Whitehaven Coal Surges with 21% Production Boost and Cost Savings on Track
Whitehaven Coal reported a strong December quarter with a 21% rise in production and improved metallurgical coal prices, underpinning a solid first half of FY26. The company also advanced key development projects while maintaining disciplined cost management.
- Managed ROM production up 21% quarter-on-quarter to 11.0Mt
- Equity coal sales increased 18% to 7.0Mt in the December quarter
- Unit cost of coal at low end of FY26 guidance (~A$135/t)
- Net debt reduced to A$0.7 billion with A$60-80 million cost savings targeted
- Progress on Narrabri Stage 3 and Winchester South development projects
Strong Production and Sales Momentum
Whitehaven Coal has delivered a robust performance in the December 2025 quarter, with managed run-of-mine (ROM) coal production rising 21% to 11.0 million tonnes (Mt) compared to the previous quarter. This uplift was supported by favourable weather and mining conditions, particularly at Queensland’s Daunia and Blackwater operations, as well as New South Wales’ Narrabri mine, which saw a 48% production increase quarter-on-quarter.
Equity coal sales also rose 18% to 7.0Mt, driven by strong demand for both metallurgical and thermal coal products. The company’s metallurgical coal prices improved by 9% quarter-on-quarter, reflecting tightening supply dynamics exacerbated by recent weather disruptions in the Bowen Basin. Thermal coal prices remained steady, with Whitehaven’s NSW thermal coal achieving near parity with the global gC NEWC benchmark.
Cost Discipline and Financial Strength
Whitehaven’s unit cost of production for the half-year is estimated at approximately A$135 per tonne, sitting at the low end of the company’s FY26 guidance range of A$130 to A$145 per tonne. This cost discipline is a key factor in maintaining solid margins amid cyclical market pressures. The company is on track to realise annualised cost savings of between A$60 million and A$80 million by the end of June 2026, reflecting ongoing operational efficiencies and capital allocation prudence.
Financially, Whitehaven has strengthened its balance sheet with net debt reduced to around A$0.7 billion as of 31 December 2025, down from A$0.8 billion at the previous quarter’s end. Liquidity remains strong at A$1.5 billion, providing flexibility to navigate market uncertainties and invest in growth opportunities.
Progress on Development Projects
Capital expenditure remains disciplined, with A$10 million invested during the quarter in key development projects including the Narrabri Stage 3 Extension and Winchester South metallurgical coal project. The Narrabri Stage 3 project, which extends the mine life to 2044, is progressing according to plan, with mining operations underway since August 2025.
Meanwhile, the Winchester South project has received draft environmental approval from Queensland authorities, though it faces objections currently under review by the Queensland Land Court. Whitehaven continues to advance feasibility studies, aiming to capitalise on synergies with the nearby Daunia mine.
Market Outlook and Strategic Positioning
Whitehaven’s outlook remains cautiously optimistic. The company highlights structural supply constraints in global metallurgical coal markets, particularly from Australian producers, which are expected to support higher prices over the long term. Additionally, thermal coal demand persists in developing economies prioritising energy security, underpinning longer-term price support for high-quality thermal coal.
With production and sales tracking in the upper half of FY26 guidance, Whitehaven is well positioned to leverage improving market dynamics while maintaining financial and operational discipline.
Bottom Line?
Whitehaven’s strong operational momentum and disciplined cost management set the stage for a potentially robust FY26, though market volatility and regulatory hurdles remain watchpoints.
Questions in the middle?
- How will ongoing regulatory challenges impact the timeline and viability of the Winchester South project?
- What are the implications of recent weather disruptions on Queensland’s metallurgical coal supply in coming quarters?
- To what extent will Whitehaven’s cost savings initiatives sustain margins if coal prices fluctuate?
