Stanmore Resources Posts Record 2025 Coal Output Despite Price Slump

Record Production Amidst Challenging Market Conditions

Stanmore Resources Limited (ASX:SMR) delivered a standout operational performance in 2025, posting a record 14.0 million tonnes of saleable metallurgical coal despite a challenging environment marked by a four-year low in coal prices and severe wet weather disruptions early in the year. The company’s ability to sustain production growth while managing costs underscores the resilience of its Bowen Basin assets and operational teams.

Run-of-mine coal production rose to 20.5 million tonnes, surpassing the prior year’s 19.4 million tonnes. The South Walker Creek mine led the charge with record outputs across multiple metrics, benefiting from recent capital investments such as the MRA2C expansion which lowered strip ratios and boosted productivity. Poitrel also set new all-time production records, while Isaac Plains Complex rebounded strongly in the second half after a weather-impacted start.

These operational milestones were achieved despite metallurgical coal prices averaging US$133.24 per tonne, down 21% from the previous year’s US$167.94. The company’s disciplined cost management helped offset price pressures, with free-on-board (FOB) cash costs marginally falling to US$87.8 per tonne from US$89.4 in 2024, reflecting efficiency gains and targeted cost reduction initiatives.

Stanmore’s 2025 financial results show an underlying EBITDA of US$384.6 million and free cash flow from operations of US$296 million, validating the strength of its long-life asset base and operational execution. However, the company reported a statutory net loss after tax of US$47.2 million, impacted by non-cash items and impairments.

Reflecting confidence in its cash generation, the Board declared a fully franked final dividend of 8.9 US cents per share, continuing a shareholder return trajectory that has delivered approximately 30% compound annual returns since the mid-2022 acquisition of BMC assets. This dividend declaration follows the company’s recent record 2025 output and cost efficiency guidance.

Safety and Sustainability Gains

Safety remains a core priority for Stanmore, with the Serious Accident Frequency Rate steady at 0.33 per million hours, well below the industry average of 0.73. Notably, reportable injuries fell 57% year-on-year, highlighting the effectiveness of frontline engagement and risk management programs. The company continues to embed safety culture improvements through leadership focus and technology-driven hazard detection.

On the sustainability front, 2025 marked a significant milestone as Stanmore became one of the first Australian mining companies to comply with the new mandatory climate-related disclosure standards under AASB S2. The company advanced its decarbonisation initiatives, including the gas-to-electricity project at South Walker Creek aimed at capturing methane emissions for on-site power generation, and strengthened environmental management and community engagement programs.

Stanmore’s sustainability governance is overseen by its Board Sustainability Committee and Audit & Risk Management Committee, integrating climate risk into enterprise risk frameworks. The company reported total Scope 1 and 2 greenhouse gas emissions of approximately 1.18 million tonnes CO2-e for 2025, with targets aligned to the Australian Safeguard Mechanism and national climate commitments. Investments in low-emission technologies and energy efficiency are ongoing to mitigate future regulatory and market risks.

Progress on Development Projects

Strategic growth initiatives advanced in 2025 include the Isaac Downs Extension Project, where the maiden JORC resource declaration was completed and the Environmental Impact Statement (EIS) Terms of Reference released. The EIS submission is targeted for the first half of 2026, with regulatory approvals expected by late 2027. Development studies for the Eagle Downs project also progressed, underpinning long-term production capacity beyond the current asset portfolio.

Capital expenditure normalised to US$85 million in 2025, down 50% from 2024’s elevated spend, reflecting the completion of major expansion works. This transition to steady-state capex combined with robust operating cash flows enhances the company’s capital flexibility to invest selectively while returning value to shareholders.

2026 Outlook and Market Dynamics

Looking ahead, Stanmore anticipates a modest reduction in saleable production to between 12.8 and 13.4 million tonnes in 2026, primarily due to planned scaling back at Isaac Downs as it optimises cost structure ahead of transitioning to the Isaac Downs Extension. Production at South Walker Creek is expected to sustain its expanded capacity, while Poitrel’s volumes will normalise following its record year.

FOB cash cost guidance is set at US$93 to US$97 per tonne, reflecting inflationary pressures and foreign exchange impacts. The company remains cautious but optimistic amid improving coal prices, supported by constrained Queensland supply, strengthening Indian demand, and renewed Chinese import activity influencing global price formation.

Stanmore enters 2026 with a strong balance sheet, closing 2025 with US$211.5 million in cash, net debt of US$33 million, and total liquidity of US$482 million including undrawn credit facilities. This financial strength provides resilience against market volatility and supports ongoing operational and strategic initiatives.

As the company navigates a complex global and regulatory landscape, the interplay between commodity price fluctuations, evolving climate policies, and operational risks will be critical to watch. How Stanmore balances capital discipline with growth ambitions and sustainability commitments will shape its trajectory in the coming years.