Whitehaven Coal Limited (WHC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Whitehaven Coal's 2021 Annual General Meeting. My name is Mark Vaile, and I'm the Chairman of the Whitehaven Board of Directors, and I will chair today's meeting. Due to COVID-19 restrictions, today's meeting is being held virtually. Every effort has been made to ensure today's meeting runs smoothly. However, if any technological issues arise and it becomes necessary to provide procedural information to shareholders, updates will be provided on our website. You can also contact the help center using the contact details set out in the notice of meeting. A recording of this meeting will be posted on our website following the meeting. I'd like to commence the formalities of today's meeting by acknowledging and welcoming New South Wales elder and Board member of the Metropolitan Local Aboriginal Land Council, Uncle Allen Madden, who will perform a welcome to country.

Good morning. My name is Allen Madden, Gadigal Elder. From our first one, no, I'm only kidding you fellows. How are you? It's always an honor and pleasure for me to welcome you all to country, give you a bit of an insight of where you are, and who we are. Like we've all welcomed the country's first and foremost, I'd like to acknowledge our Aboriginal elders, all elders, past and present, and pay my respects. To all our Aboriginal elders, our First Nations Camilla Roy, Melbourne. Just to give you a bit of an insight about a welcome to country, that's something that's happened with Aboriginal people for a long time. I'd like to pay my respects to all our First Nations and let everyone know where we are and who we are. As I mentioned, my name is Allen Madden, Gadigal Elder. To all our Aboriginal and Torres Strait Islander brothers and sisters, from whatever Aboriginal or island nation you may have come from, welcome to Gadigal. And to all our non-indigenous brothers and sisters, a very warm and sincere welcome to you. No matter where you've come from, whether it be across the seas, across the state or across town, once again, a very warm and sincere welcome to you to Gadigal. And as I've mentioned many times before, was, is, and always will be Aboriginal land. Only three things are surer than that; coming, taxation, and going. It's an honor and pleasure for me to welcome one and all to Gadigal. Gadigal is 1 of 29 clans of the Eora nation. The Eora nation is bounded by nature's own, the Hawkesbury River to the north, Nepean to the west, and Georges River to the south. And in between those 3 mighty rivers is the Eora nation. And in that nation, there are 29 clans. And the clan's land we are on today is Gadigal. On behalf of members of the Metropolitan Local Aboriginal Land Council, and of the Gadigal mob, once again, a very warm and sincere welcome to you to Gadigal. And as you travel across these traditional lands and waters, may the spirits of our ancestors guide, look over you and keep you safe. So once again, on behalf of Land Council and of the Gadigal mob, welcome, welcome, welcome. Thank you.

Thank you, Uncle Allen, for such a warm welcome. Ladies and gentlemen, there is a quorum present, and I formally declare the meeting open. The notice of meeting has been distributed and will be taken as read. Joining me today are my fellow directors: John Conde AO, Deputy Chairman of the Board and Chairman of the Remuneration Committee; Paul Flynn, our Managing Director and CEO; Dr. Julie Beeby, Chairman of the Health, Safety, Environment and Community Committee; Fiona Robertson, Chairman of the Audit and Risk Management Committee; Lindsay Ward and Ray Zage. Also joining me are Tim Burt, our Company Secretary; Kevin Ball, our CFO; and Ian Humphris, our Executive General Manager Operations. Scott Jarrett and Simon Hannigan, Partners of Ernst & Young, Whitehaven's auditor, are also present. As this is a shareholders' meeting, only shareholders, their attorneys, proxies and authorized company representatives are entitled to ask questions, make comments and vote. Questions can be submitted on any item of business and will be answered later in the meeting. I would like to remind everyone to be respectful of all shareholders who have taken the time to participate in today's meeting. We welcome questions from all shareholders, but it is important to give everyone an opportunity to participate. To that end, please keep your questions short and to the point. In the interest of time, questions may be moderated or amalgamated if there are multiple questions on the same topic. Please include the item of business that your question relates to. Please do not submit more than 1 question at a time and limit yourself to 2 questions or comments. Any members of the media seeking to ask questions should call the media contact number listed on the Whitehaven website directly. Voting will be conducted by a poll on all items of business. If you are eligible to vote at this meeting, a polling icon will be available on your screen. Selecting this icon will bring up a list of resolutions to vote on. You will have the ability to lodge your vote up until the time I declare voting is closed. In relation to resolution 3 and 4, today, both Fiona Robertson and Lindsay Ward are standing for reelection as directors. Fiona and Lindsay are both outstanding and highly capable members of our Whitehaven's Board, and I encourage all shareholders to vote in favor of these resolutions. I'll hand over to Fiona to say a few words.

Good morning, ladies and gentlemen. I have certainly enjoyed serving as a member of the Whitehaven Board for the past 3.5 years, including as Chair of the Audit and Risk Committee and as a member of the Health, Safety, Environment and Community Committee. While I'm a geologist by training, my background is in corporate finance where for most of my career, I have specialized in the resources sector. I have worked with small and mid-cap companies initially as a banker, then as a CFO and over the past 14 years, as a Non-Executive Director. I've been fortunate to gain a broad range of practical experience beyond my core skills in finance, risk management and corporate governance. In addition, to further developing my appreciation for the operational aspects of the mining process, my more recent roles have offered extensive exposure to the complex stakeholder engagement considerations that are key features of the modern mining landscape. In my committee roles, I have been actively involved in Whitehaven's sustainability and climate reporting, a dynamic and evolving area, which is the subject of growing interest from a wide range of our stakeholders. It was pleasing to see Whitehaven become, in 2019, the first pure-play coal company to respond to the recommendations of the Financial Stability Board's task force on climate-related financial disclosures, more commonly referred to as TCFD reporting. We continue to review how best to meet the needs of our shareholders through our further work and disclosures in this area, and indeed, more broadly, in reinforcing Whitehaven's contribution and commitment to stakeholders right through the value chain from shareholders to customers, employees and the communities in which we operate. Should I be reelected, I look forward to continuing to work with my fellow directors and with management to make a positive contribution to Whitehaven's future. Thank you for your consideration.

Thank you, Fiona. I will now hand you over to Lindsay to say a few words about himself.

Thank you, Mark, and good morning, shareholders and guests. I'm pleased to stand for reelection to the board of Whitehaven Coal today, and welcome the opportunity to continue to represent you, our shareholders. It has been a privilege to serve Whitehaven as a Non-Executive Director for almost 3 years, having joined the Board in February 2019. My professional career began in mining, and it is a sector that I'm passionate about and committed to. Until recently, I was CEO of Palisade Integrated Management Services, which has 9 diverse infrastructure assets under management, including renewables and gas transmission assets. Prior to this, I was the Managing Director of Dart Mining, a Melbourne-based exploration company and a Non-Executive Director of Metro Mining Limited. My technical expertise and practical experience in coal mining as well as my broader experience in the related fields ports management, rail haulage, mineral processing, logistics and infrastructure has enabled me to make a significant contribution to the Whitehaven Board, including as a member of the Health, Safety, Environment and Community Committee as well as the Remuneration Committee. Especially in light of Whitehaven's continued progress on the Vickery and Winchester South developments, I believe my significant and diverse experience across mining and related industries from operations to capital projects and business strategy will contribute to the company's long-term sustainability. It is an incredibly exciting time to be part of this sector, and there are plenty of opportunities and challenges we must navigate. Subject to the approval of shareholders, I look forward to continuing to work closely with my fellow directors and management and continue to grow our business in the interest of all shareholders. Thank you.

Thank you, Lindsay. Resolutions 6 and 7 have been requisitioned by a group of shareholders holding approximately 26,500 shares, representing 0.003% of the company's voting capital. Voting on resolution 7 is contingent on resolution 6 being passed as a special resolution. The vote results for resolutions 1 to 6 will be displayed following the Q&A section of the meeting. If resolution 6 is past, resolution 7 will then be open for voting. I now declare voting on resolutions 1 to 6 open. Please submit your votes at any time whilst voting is open. I will give you a warning later in the meeting before I close voting. I am holding open proxies in my capacity as Chairman, and it is my intention to vote all available proxies in favor of all resolutions with the exception of resolution 6 and 7, for which open proxies will be voted against. The screen now shows details of the proxies received in advance of the meeting on resolutions 1 to 6.

Based upon proxies received, it is clear the company is heading towards a strike in respect of the FY '21 remuneration report. This is very disappointing. As it will be the first strike for the company off the back of a track record of very highly supported remuneration reports with no less than 95% support for the company's remuneration reports in each of the last 8 years, operating in a cyclical industry as we do. The Board works hard to achieve an appropriate balance between remunerating and rewarding its people and the alignment of those arrangements with shareholder returns. The Board takes feedback from shareholders on remuneration matters very seriously, and we will have regard to it in the coming year as we review our remuneration structure. I will now turn to my Chairman's address, which was released to the ASX this morning.

Ladies and gentlemen, 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, global industrial activity started to pick up with a corresponding increase in demand for our product. At the same time in Australia, we were required to implement tough new measures to control the spread of the COVID-19 virus, measures that are now only after many months, starting to be wound back. 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 site for nearly 2 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'm incredibly proud of the major compensating role we have been able to play for our host communities, with $345 million spent with local suppliers last year and $210 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. Against this backdrop, it has been great to see a range of efficiency and organizational improvement initiatives begin to bear fruit. This is especially true in relation to our largest asset, Maules Creek, which achieved record ROM production in financial year 2021 and demonstrated consistent and predictable performance that continues. 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, particularly on the eve of the COP-26 Summit in Glasgow. Understandably, there is increasing interest from our shareholders and our stakeholders about what role Whitehaven can play in a lower-carbon future. Since the release of the company's first Sustainability Report for FY '19, 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. The current global energy crunch, while reflecting a wide range of factors, also demonstrates the risks of underinvestment in sectors that will remain vital to economic growth and social development as the world undertakes the multi-decade energy transition. I encourage you to read more on our perspectives in detail in the Sustainability Report 2021, and welcome your continued engagement with me, my fellow Directors as well as the executive team on these matters. Our perspectives on the continuing demand for high-quality coal in the region 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. Over the past year, we received final approval for our Vickery Extension Project, and both Vickery and Winchester South continue to progress in-line with the Board's cautious approach to capital allocation. No dividends were declared in FY '21 but historic highs in coal prices foreshadow a return to dividend paying status in the near future with the business generating cash at a rapid rate. Indeed over the past months, strong coal prices have allowed the company to make good progress in paying down debt, putting us in good stead to consider our development pipeline over the coming year or so. Ladies and Gentlemen, today we are recommending shareholders vote against resolutions promoted by Market Forces. The view of the Board is that these resolutions are not in the interests of a majority of shareholders and I reiterate that while we recognize and support the long-term goal of the Paris Agreement, there is currently no multilateral agreement in relation to achieving global net 0 emissions by 2050. Nevertheless, we acknowledge the changing landscape in relation to net 0 emissions, particularly in a domestic context, and we have made good progress in looking at how we can reduce our Scope 1 and Scope 2 operational emissions. I am pleased to share that we now have carbon-neutral electricity supplied to our sites, are well advanced on investigating behind-the-meter solar opportunities at our Narrabri mine, and continue to research opportunities to generate and/or purchase carbon offsets. I look forward to continuing the conversation with stakeholders about these important initiatives. In the meantime, we believe Whitehaven and its customers have a positive role to play in the global energy transition. By combining high-quality coal with advanced generation technology, we offer a less carbon-intensive alternative to lower quality coals that would otherwise meet the underlying demand in Asian markets expected to continue for decades. As a large-scale producer of high energy, low impurity thermal coal, we are well-aligned to the stricter climate and pollution policies that have either been enacted or are in discussion among our key Asian customer nations, which are seeking to reduce their emissions while maintaining the stability and reliability of their electricity grids. Finally, we agree that continued disclosure around climate-related risks is important. This is why we have taken great care to evaluate the resilience of our operating asset portfolio in more aggressive decarbonizing scenarios that are consistent with the objectives of the Paris Agreement as part of our response to the recommendations of the TCFD. Ladies and gentlemen, I would like to thank my fellow Directors, senior management, and the entire workforce for their significant efforts, and on behalf of the Board, I would like to thank our joint venture partners, banking syndicate and you, our many shareholders, for your ongoing support as we look ahead to a future for the company that is full of promise and potential. Thank you, and I will now hand you over to Paul Flynn for his presentation.

Thank you, Chairman. And welcome everyone to Whitehaven Coal's 2021 virtual Annual General Meeting. Today I'll re-cap on Whitehaven's financial year results and how we as an organization, have performed during the year. Secondly, I'll give an update on our customer markets in Asia. Followed by how Whitehaven is positioned for the future. Firstly, before we get underway, please note the disclosure statement here with respects to forward-looking statements. Before I run through our FY '21 performance, I think it would be useful to recap on Whitehaven's strategy and purpose, as this gives context to all that we do now and to our future. Whitehaven's strategy is clear. We are owners and operators of valuable assets, producing premium thermal coal and semi-soft coking coal. We are focused on increasing market share in our region that is Asia, which as many of you know, will continue to be the center of global economic growth and relatedly, coal consumption demand. Our purpose is to support and sustain regional communities through the successful operation of our assets. Sustainable development underpins everything we do at Whitehaven. As a proudly Australian company, we believe we have a key role to play in helping regional communities grow and prosper. Our STRIVE principles, outlined here on this slide, guide us in how we go about our work. One of the ways we make our contribution is through providing sustainable, long-term, rewarding career opportunities for those who live or want to live in the areas surrounding our operations. Through employment, we also contribute to supporting diversity in our workforce, through direct engagement with the indigenous community and encouraging increased female participation at our operations. As the largest private sector economic contributor in the local community, we support not only individuals through employment, but also through local procurement, community partnerships and by paying our federal, state and local taxes. Now looking to our performance for our FY '21 year. As you know, it was very much a year of highs and lows both operationally and in terms of factors outside our control. First, to safety. As one of Whitehaven's STRIVE principles, safety means our people, workplaces and communities come first. During FY '21, our Gunnedah coal handling plant and Rocglen site, now in its 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 FY '20. We continue to observe a decrease in this metric across the longer term, not just in the number of incidences, but also in their severity. During the year, COVID-19 continued to present challenges for coal markets and at home. In order to ensure the continuity of operations through this period, it was essential to implement a response plan that considered our people, communities, suppliers, logistics chain and our customers. Fortunately, the implementation of our response plan has resulted in our operations running without disruption and our workforce having been safe and well, and importantly, COVID free. For this reason, I want to acknowledge the way in which our people have navigated these challenges with great resilience and flexibility. For Whitehaven, sustainability is about how our financial, physical and human capital combines to deliver positive outcomes to our diverse stakeholders at home and abroad. We deliver value to customers, our workforce, shareholders, local communities and suppliers by developing safely, and responsibly operating, high quality, cost-efficient, long-life coal assets. We have highlighted here some of the metrics we have outlined in our 2021 Sustainability Report, which demonstrate our approach to sustainability in action and I commend this report to you. Whitehaven acknowledges that our operations and the consumption of coal generates greenhouse gas emissions. In order to manage climate-related risks, we continue to assess our business against decarbonization pathways and disclose financial risks against the Task Force on Climate-related Financial Disclosures, the TCFD framework. Our business is robust under both the STEPS and SDS scenarios. Now moving on to re-cap on our financial performance. FY '21, we recorded underlying EBITDA of $204 million, a decrease of 33% on the prior year, reflecting a period of cyclically low and the impact of a strengthening Australian dollar. Geological challenges at Narrabri affecting production and coal quality also played a part in producing more than 2 million tonnes less than planned. We recognized significant pre-tax expenses totaling $650 million, relating to asset impairments that primarily reflect optimization plans at our Narrabri and Werris Creek Mines. As a result, in FY '21, we reported a net loss after tax of $543 million. While also contending with port and logistics disruption, COVID and other challenges, we managed to contain costs. With the challenges of FY '21, it was even more important to observe a disciplined approach to capital allocation, maintaining a strong balance sheet and liquidity through this turbulence was essential. At the end of the reporting period, net debt stood at $808 million, but since the end of the year, has decreased quite rapidly. As mentioned, we recorded a significant item in FY '21, and I'd like to take a moment to explain the context for these asset Impairments. In order for us to optimize the margin outcomes of production from our Narrabri underground mine, we reviewed the life of mine in detail and a number of important changes in the interests of long-term value were made. As a result, we have written down existing mine development infrastructure, such as the mains development, given the change in mining direction of panel retreat; the development drives associated with the step around in longwall panel 110; and the deferral of longwall panel 111 to later in the mine's life. Each decision is part of the plan to return to the more productive and lower cost shallow side of the mining lease as soon as possible. Additionally, panels 201 and 202 have been impaired and are expected to be extracted now using the Cut and Flit methodology, rather than extraction by the longwall. The carrying value of Werris Creek has also been impaired, reflecting the revisions to its closure plans with production ending in FY '24. And while previously we had secured rights for Tarrawonga and Vickery to ship additional coal on the Maules Creek Boggabri Coal Rail Spur, it is not expected that coal from either of those mines will use this route, so we have written down that intangible asset. I'll now turn to financing. Whitehaven actively manages the complexities of maintaining liquidity, and a diversified capital structure. Near-term maturities are avoided, and we are well financed for the future, but we will continue to pursue other sources of capital for our growing business. Currently, we are taking advantage of improved margins to retire debt quickly. At the year of end, you may recall we disclosed a more conservative posture for balance sheet management, which will see us maintain a much lower level of net debt through the cycle. Now to our operations. While we navigated the difficult geological conditions at Narrabri during the year, we also managed to drive our largest mine Maules Creek, to achieve record annual production of 12.7 million tonnes. This is a clear indication of the operational discipline and consistency we have been striving to achieve across the business. In total, our ROM production of 20.6 million tonnes was in line with the prior year. For this coming year, FY '22, we anticipate a similar level of production, with the potential for some upside. In aggregate, our open cut mines, Maules Creek, Tarrawonga and Werris Creek performed well in FY '21. For FY '22, we are guiding ROM production of 12.1 million tonnes to 12.5 million tonnes for Maules Creek. It should be noted that Maules Creek's mining license allows 13 million tonnes ROM production per calendar year. For FY '21, our Gunnedah Open Cuts, Werris Creek and Tarrawonga, achieved a combined ROM production total of 3.8 million tonnes, which is in line with the prior year. For this new year, FY '22, we are guiding ROM production of 3.6 million tonnes to 4 million tonnes. Werris Creek is now progressing towards the end of its mine life, with 3 years of production remaining. It will them move into the rehabilitation phase, which will take a further 2 years to complete with a small crew. On to Narrabri. As previously reported to the market, during the latter part of the first half, Narrabri production was impacted when the longwall encountered an unforeseen mid-faced 3-meter upthrow fault that resulted in reduced productivity, increased out-of-seam dilution and significant mechanical wear and tear. Navigating these geological challenges and the associated equipment downtime saw Narrabri report historically low production levels of 4.1 million tonnes. Looking forward to FY '22, and given last year's results, we are guiding ROM production of 4.3 million tonnes to 5 million tonnes. On the slide, you will see the historical production levels of Narrabri. The reason I wanted to point this out is that it shows Narrabri's annual production level in relation to the depth of cover. As the mine progresses deeper, production level decreases, and importantly, as we return to the shallow side of the mine, volumes will return to those consistent with operating in less than 250 meters of cover. This slide gives you an indication of where the production will be producing for FY '22 comes, notably the beige shaded areas. And scrolling forward a year, this same slide now shows where FY '23's production comes from, that is the balance of panel 110B, shown in beige, before returning to the shallow side of the mining lease in the March quarter of FY '23. With multiple panels in the shallow ground, the mine will enjoy many years of the production levels depicted in Slide 14 and associated lower costs. With the additional Cut and Flit tonnes being mined concurrently, we anticipate that the mine will be able to produce between 7 million tonnes to 9 million tonnes per annum in these favorable conditions. Moving onto our markets now, which as you know, saw very low prices, but also high prices during FY '21, and has now moved onto a more positive posture since then. Other than some small boutique domestic customers, Whitehaven exports all of its coal into Asia, to either electricity generators, steel makers or smelters. The majority of our thermal coal is bought by customers in Japan, Korea and Taiwan. Our coal is consumed in nothing less than a HELE power station, and all our customer jurisdictions and countries are holders of NDCs that underpin the Paris Accord. So we certainly feel very much aligned to the emissions reductions efforts of our customers and those nations. The majority of our metallurgical coal products are sold into India, Korea and Japan. The obvious omission from this slide is China. Whitehaven's coal products are not exported to Mainland China. Looking back over the last 12 months, coal markets were as dynamic as we have ever seen. And while we saw cyclical lows in pricing in the first 3 to 4 months of the year, our rebound was underway in November and December. Coal prices have now reached historical levels as the global economic recovery picks up pace amid continuing to tightness in supply. There's lots going on in this space, both on the demand and supply side, which has resulted in ongoing tight supply demand fundamentals. We have seen strong demand from our normal customer base due to improved industrial activity. Coal restocking is underway ahead of the Asian winter and strong LNG prices make current coal prices even more competitive. During recent months, we have also seen increased purchasing from other producers as they increase the average coal quality of their own product through blending it with our high CV thermal coal. It has been over a year since Chinese import restrictions on Australian coal were imposed, and this disruption has driven a redistribution of trade flows in the global seaborne coal market, and in doing so, driven greater demand for our high CV coal from Australia. On the supply side, which is mostly structurally constrained already, coal producing jurisdictions have seen numerous disruptions already. Indonesia has experienced heavy rainfall, equipment availability issues impacting production and redirection of coal supply to domestic power generators. Russian and South African exports have been impacted by rail and other logistical challenges. While Colombian producers have faced industrial action. Wildfires have also interrupted supply out of Canada and the U.S. and Australian supply has experienced weather events and logistics issues such as the outage of the NCIG Shiploader for a period of 8 months. All these factors have contributed to create a very tight market, supporting prolonged record prices. Looking beyond the near term, the fundamentals which drive the demand for coal look strong. With the world coming to terms with COVID, economies have been responding to the plethora of stimulus policy responses governments around the world have embarked on. Increased industrial activity requires the support of increased electricity generation and building materials such as steel and cement. I'm sure it comes as no surprise to you that Asia figures so dominantly in underlying coal demand data. Looking now at forecasted demand for seaborne thermal coal to support industrial activity in customer markets. The amount of supply coming from existing mines falls well short of projected demand. This supports a robust price environment for the seaborne coal market. Considering the fundamentals driving Asia's demand for high quality coal, we view Whitehaven as being in a prime position to make the most of emerging opportunities in the region. Not just with our current portfolio of operating mines but also our growth projects. As there is clear and growing demand for our quality coals within the steel making, industrial and electricity generation sectors. For the success of Whitehaven Coal, it is not only important in near term our coal products are in high demand but also for the decades to come. As I mentioned, all of Whitehaven customers are in countries who are signatories to the Paris Accord or have domestic policies consistent with Paris Accord objectives. Our customers rely on our high CV, low impurity coal products to ensure they meet the regulatory standards set by their own governments, now and well into the future. Not only do our customers recognize the value of the coal products Whitehaven offers, but also our State and Federal governments acknowledge, and support, the role the high-quality coal has to play in our region's energy security and industrial growth. This acknowledgement was evidenced by the New South Wales government recently in issuing their strategic statement on the future of coal exploration and mining in New South Wales, which recognizes the long-term global demand for coal, particularly in our neighboring region of South East Asia. The Federal government recognizes the important role coal will play in Australia's energy future and has included carbon capture and storage of one of its 5 priority technologies in the first Low Emissions Technology Statement. This year, we continued to review and address climate-related risks and opportunities, as outlined in our 2021 Sustainability Report, which was released in August. As part of this work, Whitehaven reported against the voluntary framework recommended by the Financial Stability Board's Task Force on Climate-Related Financial Disclosures, known as TCFD, to test our business resilience under various low carbon scenarios. This is our third year of reporting against TCFD scenarios. Our analysis is consistent with previous years, concluding that our operations will be resilient and return positive value for shareholder under all carbon scenarios. Finally, looking forward to the remainder of this new financial year, our focus is on maintaining consistent production performance and optimizing our coal product offerings to maximize margins and make the most of this 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 to our Board of Directors for its guidance and support. I extend my thanks to all shareholders for their ongoing support and engagement and look forward to a successful FY '22. Thank you very much.

Thanks, Paul. We'll now move to the Q&A section of the meeting. As I explained earlier, questions can be submitted online via the Lumi platform or you have the option to either type a question or ask an audio question when prompted. And just a reminder that if you are waiting to ask an audio question and are hearing 2 audio feeds, please pause the broadcast on the Lumi platform or hang up from the audio line in order to stop hearing both feeds. In the interest of time, questions may be moderated or amalgamated if there are multiple questions on the same topic. Thank you to those shareholders who have already submitted questions. We'll now move to the first question. I think it's from [ Nicholas ].

The coal price today is much higher than anyone forecast. What is your expectation for coal price over the coming 12 months?

Thanks, [ Sean ], for the question. Obviously, there's very much coverage of the strength of global coal prices at the moment, particularly in the East Asian region. Overnight, we saw adjacent new spot price at USD 194. The forward curve, which is our guide to pricing through, not just the next 12 months, probably the next 2 years, is giving indications of ongoing strong pricing, particularly for our high-quality product. And given that we trade into the major markets, particularly in North Asia and South Asia and the indications from our markets and from our customers is that the strength of commitment is going to be remaining quite strongly. I would make the point that we don't sell any coal at this stage into China. And so we are remaining in those high-quality markets in Japan, Korea, Taiwan and India. Okay. Next question is from Sando Investments Proprietary Limited.

With all the discussion about the move towards 0 emissions, what role do you see Whitehaven playing in the transition to this position?

Thanks for the question from Sando. Look, it's important to note at the outset that all the debate and discussion at the moment is about net 0 emissions, not necessarily 0 emissions, and there is a significant difference. We take the view that, obviously, there's a transition that's going to be taking place over decades in the global energy market. And emissions reductions cannot come at the cost of economic development and economic well-being and the evolution in terms of those countries, particularly developing countries that are seeing a mass vibration much of their population out of poverty and into the middle class and starting to get access to fundamentals that we enjoy in Australia like water and access to electricity. We see a significant role that our company and the product that we have, the high-quality product that we sell into these markets is playing in that transition. If you look, again, I referred to our main market in Japan and the policy settings that have been put in place in Japan are based on the deployment of new technology in their power stations that requires the use of high quality by that I mean high energy, low impurity, low emission coal like that's the way we produce, particularly at our managerial assets a few of those power stations. And so in that way, we are playing a significant part in the transition towards a cleaner environment and then as these countries that commit ultimately to net 0 emission positions. Okay. Next question is from Kevin and Jane Dailey.

For FY '21, AGL's total Scope 1 and 2 emissions was 43 million tonnes CO2. How does Whitehaven Coal's FY '21 emissions compare with this figure?

Thanks, Kevin and Jane. I'm just going to pass this our to our CEO and Managing Director, Paul Flynn.

Thank you, Chair. Thanks for the question, Mr. and Mrs. Dailey. Our Scope 1 and 2 emissions is an owner of public record through our sustainability report, which I mentioned earlier, it was released in August. The total of those emissions from Whitehaven for the same period was 1.6 million tonnes of CO2.

Great. Thanks, Paul. Next question is, I think it's an audio question coming from Christine Carlile.

Christine, would you go ahead and ask your question?

Okay. There might be some problem with your audio there. We'll move on for the next question. The next question is from Hamish [indiscernible].

Under the RBA's net 0 by 2050 scenario, Australia's coal exports fall by 80% by mid-century and the RBA says, there is potential for stranding even if there is no investment into new mines. The Paris aligned below 2 degrees scenario has similar outcomes. Has the Board considered the RBA's assessment? And what is it response?

We continue to have ongoing work done and assessing a variety of reports that have been published with regard to the future as far as net 0 is concerned. We -- our current position, our sustainability report, and our reporting at TCFD is clearly linked to the multilateral agreement that exists at the moment, and that's the Paris agreement. And so that is obviously there's an upcoming meeting that will base at new parameters. So we have stress tested our resilience against -- during published IEA scenarios, including the Paris line sustainable development scenario. Okay. Next question is from Kevin and Jane Dailey, again.

With respect to the Vickery mine, have you started arranging funding as yet? For your other mines, you've managed to get a major customer to take an equity stake. Is this again your preferred route?

Thanks, Kevin and Jane. As shareholders you will be well aware, we've just received the final approval for Vickery. And so it's probably at least 18 months away from making a financial investment decision. We obviously look at all options in terms of funding. We're currently enjoying fairly buoyant period in the seaborne coal market, which is without delevering underway at the moment. It's going to put us in a stronger position as far as resources to fund future development. And yes, we always consider the opportunities that are available with joint venture partners. And over the years that we've been going through the development process or the development approval process, I should say, with Vickery. We have seen a number of expressions of interest from consuming customers with regard to the possible joint venture opportunities that might arise at Vickery. So we are in a good position where there is great flexibility available to the company in terms of the financing options for the development of Vickery. Now our next question is an audio question from Peter Donnelly.

Peter, will you go ahead now?

It's pretty clear from the International Energy Agency's World Energy Outlook, but the world is moving away from coal, and it seems like this trend is only going to accelerate. This is the big risk for Whitehaven and its workers. My question is, what level of planning has management done to gain plan in the future of the company in a scenario with coal demand all a suddenly disappears? And what's taking it on Whitehaven and putting in place a support for its employees and subcontractors, for example, conversation and training, the world moves to attribute net 0 emissions by 2050 or sooner?

Thank you very much for the question, Peter, and I appreciate the sentiment and concern with regard to employees. And that's a concern that we take very, very seriously. I just going to hand to our CEO, Paul Flynn to my comment on that.

Thanks very much, Chairman, and for your questions, Donnelly. We -- exactly on all these scenarios, and as Chairman has mentioned earlier, in our TCFD reporting, we've benchmarked the business against these scenarios and we have a robust business under all those circumstances. We do know that they have scenarios as the previous question raise from the RBA's own work is a scenario of our forecast. So we monitor this very closely, in particular, with the engagement with our customers. In relation to our coal, I would make the point that because of the higher rig quality nature of our coal and to the extent that, as you say, in excess there is reducing demand for oil. We certainly think the high-quality coal is the one that is the most enduring under all those scenarios. And in fact, in key markets, as lower rent coals or old coal stations, fueled by low rent coals have been closed, we've been growing market share in those instances. And so that's very assuring. We're very much mindful of the concerns of our employees. And of course, we've got multigenerations working for us, and we want to continue to provide a pathway for careers for all employees and through our employees thorough this second launch. So unfortunately, we have long life mines. And we stay very close to our customers' needs to ensure that a particularly high-quality coal is going to be needed in for decades to come.

Thanks, Paul. Next question is from Edmond [indiscernible].

This morning, I observed 3 loaded and 2 empty Whitehaven coal trains between Muswellbrook and Narrabri alone. With great coal prices and given the Australian Rail Track Corporation had in the last couple of years experienced a small decline in overall coal traffic, is there any difficulty in obtaining sufficient train path to the port of Newcastle? The harvest from last year is still being railed for export. And this year's wheat, canola and cotton crops will put more pressure on the single track sections.

Thanks, Edmond. I'll just [indiscernible] and I'll hand over to Paul to make comment.

Thank you, Chairman. This is an important area, but I can certainly say that we've got plenty capacity on the line to be able to meet the needs of our sales profile. ARTC does a good job in managing this important piece of infrastructure. And to the extent there is further capacity required very much front of mind or thinking about the Vickery project that we stay ahead of this. But it's pleasing to see the rest of the region doing well with costs being positive. And at this point in time, no problems at all getting our products market. So I'm pleased to see that the other industries in our reach are doing well at the same time.

Thanks, Paul. Our next question is an audio question from Helen Lawrence, I think. And I understand Helen might be having some problems with the audio outlines. So I just ask Helen to pause the broadcast. I can confirm that he's done that before we get to the question there. There is a final reminder for the -- just to the platform, just follow that one up. We'll go to the next question, which is from Scott Knights.

There are currently very strong supply and demand fundamentals, which are underwriting historical high prices in both thermal and metallurgical coal seaborne markets. Can you please provide some insights on whether the company is seeing the same strong end user demand in the medium to longer term through, for example, long-term offtake contract commitments, which give confidence that this current cycle is sustainable?

Thanks, Scott, for your question. And the premise is absolutely correct. There are very strong supply and demand fundamentals at the moment. And that's sort of favoring a stronger commodity price environment for both thermal and metallurgical seaborne markets. And yes, we do see that continuing. And the another evidence from the market with our customers underpins that as does the published forward curves going out through calendar year '22 and '23 in terms of the underlying strength of the pricing in the marketplace. Just with regard to comments on our long-term offtake contract commitment, so I'll just get Paul to make some comments on that.

Thank you, Chairman. We're certainly seeing a very robust markets as you well [indiscernible] stated. Our long-term customers are certainly very keen to ensure supply and many of them are thinking to draw cargoes forward given their very, very strong underlying demand needs at present. We are also supported by long-term contracts with joint venture partners, in particular, so we have long-term reagents there. We're certainly fast confidence of being able to move our product, not just in these very good time, but certainly through other parts of the pipe as well. But spot demand is pretty tight, and as you can see from the prices, it's not just been a very [indiscernible] in this historic prices at the moment, but the outlook for the next couple of years also sees that in the forward curve as mentioned earlier, above historic levels.

Thanks, Paul. We're just trying to go back to the earlier audio question of Helen Lawrence. Are you there, Helen? We'll come back to Helen in a minute. We're moving on to this another audio question from James Tom. James?

My question relates to our 3 proposed coal mining developments at Vickery, Winchester South and Narrabri South. I understand that total capital expenditure required for these projects is just shy of $2 billion. I'm interested to understand how management intends to finance these projects. Does management expect the need to secure external project finance or will we be able to fund them entirely from cash reserves? To what extent will the existence of our bank credit facility and potential bond issue contribute to our ability to pay for these projects? When can shareholders expect final investment decisions on these mines?

Great. Thanks, James. There's a number of questions in your overall question, and I'm going to hand over to Paul to comment on those.

Thank you, Chairman. That's a good question, James. There's a lot in that. I might just deal with that in reverse order if I could. Narrabri South firstly, that's obviously a life extension of our existing mine. And I draw the distinction with that one in particular, given that there is the continuation of that mine and the mines capacity to fund itself through this investment. It is a little lumpy and the out years. There's about $400 million worth of capital required for that, but it is spread over time, which is good. As the Chairman has noted earlier in relation to Vickery, we won't be taking decision on that particularly in the next 18 months. And Winchester South, obviously, has only just finished the exhibition period for our TIS and is now within the evaluation phase with the Queensland, but it is on track, which is very positive. Both Vickery and Winchester South do have obviously more than half in terms of met coal components of the products. And so the funding of those 2 projects is certainly looked upon favorably when you have a significant met coal component. We have stated earlier that given the large amounts of capital involved in this project, probably it's very good. But we have stated previously on numerous occasions that we wouldn't attempt to do these concurrently, and there will certainly be one at a time. We don't have the capacity financial or from a human capital perspective to do that. So it will be measured and it would be obviously on the basis that we are assured that coal price that will continue to be robust, so again these exciting developments. But at the mean lead time, Narrabri South is moving along; Vickery as I said, 18 months before FID would be contemplated and Winchester South and other.

Thanks very much, Paul. And our next question is from Edmond [indiscernible].

At a quick look on the marine traffic site this morning, there are about 30 ships waiting offshore from Newcastle. How do you judge the port's productivity? And are there any significant delays to loading Whitehaven Coal onto these bulk ships?

Look, thanks, Edmon. Backlogs do occur from time to time, but we are more observing any queues currently over delays. In the last 12 months, we've had the impact of one of the travel agency and NCIG being out of service. But that backlog is largely being clear. And Paul, if you got any further comments?

Thank you, Chairman. The number of ships off the coast is reducing quickly. As you say, NCIG is back now at full capacity. And in fact, that's a very small component of the 30 ships that are quite delayed. Edmon, in fact, it's very, very small single digits factored NCIG which is our preferred loading point, although we do use -- but there is -- there has been a planned mechanical outage at WCS short in duration. So we don't see any problems at all moving coal traffic. Thank you.

Thanks, Paul. The next question is from Mark Horner.

Please briefly explain the reasoning and timing behind Resolution 5?

Resolution 5 is a standard renewal that is required which can put to shareholders every 3 years in accordance with the provisions under the Corporations Act. And we're just doing that at some -- each come around on that cycle that we need to review that authority from shareholders. Kevin, move onto the next question from Kevin Daily and Chen Daily.

I've always thought that Japan reopening its [NEC] was a major risk for Whitehaven Coal. Has there been any policy changes in this area?

Well, I thinking the question in response to that, I suppose, the latest policy change in Japan was at the time of the previous government, the Suga government, where Prime Minister Suga made Japan's commitment to net zero emissions by 2050. And we understand that the department responsible meeting in Japan is just announced or restructured their energy sources mix in terms of going forward to achieve that over the next 30 years, and that does include an increase in the contribution. In fact, to utilize heavily by an increase in the contribution from nuclear power to the energy mix in Japan. Some common traders in Japan have called that ambitious because of the electoral sentiment, particularly following the events that probably same or almost a decade to get out. And so it remains as we assume, you know, how the Japanese government goes in terms of getting the contribution increase, and the level of the contribution in the nuclear energy back into their electricity mix. In the meantime, they still have a very strong focus on fossil fuels in their mix, and in fact, as I mentioned earlier in our comments, the deployment of technology across a lot of the fossil fuel fired electricity generation plants in Japan underpins a lot of the position, that much of the position that has been taken with regard to net zero missions by 2050. And so I suppose, because Paul is a bit close to this, so their customers are many but I'll get Paul to comment. But it's obviously -- we watch with interest, the contribution that nuclear makes, if it doesn't and can't make the contribution that is expected by the Japanese government then that will leave a greater responsibility if you like on the contribution to their system by fossil fuels. Do you want to add that, Paul?

I don't have a lot to say that other than to say we're obviously in close contact with our Japanese customers. Many of them also have exposure, obviously to the nuclear part of the sector. And just to see what progress is like, obviously, given the large number of individual units as a whole capacity storage in Japan, and very small percentage of them -- are actually back online. So there's -- as you said, there's a complex situation navigating the social dimensions of bringing those new strategy online. The aspirational undersea to bring a larger proportion of them back as soon as they can. But in the meantime, obviously, gas and coal continue to play an underpinning role, and we'll continue to do so whilst they navigate the sensitive pathway to bringing further transact online. It is complex because the average ages of the player there is relatively mature. And so those who have relatively most remaining life of those existing units, we understand at least likely to be brought back into service. And with the new safety requirement is going to be retrofitted to the ones that are capable and coming on, it does take some time.

Thanks, Paul. Now our next question is from [indiscernible].

Can I suggest the [coal] remuneration report outcome is due to the Board's messaging of potentially wasting money on Green and Brownfield's expansion, which will not be valued high by the market instead of using the funds for more accretive shareholder returns such as share buybacks considering that the share price is trading at a record low EV/EBITDA ratio.

Thanks very much for the question. Well, in fact it is a more of a comment than a question. I think that during the course of the meeting, we've addressed the remuneration issue, but the fundamental premise of the comment, I don't necessarily agree. We just think the market focus is on remuneration as a reward and retention process for a quality management team rather than strategic company objectives for that. So we're going to the next question from [Keith Marlowe].

Firstly, well done in guiding the business through a most difficult and trying time for us all. I would like to know, given the probable and most welcome returns to give it the dividend payments status is in the near future and the large number of retail investors owning stocks in Whitehaven, have you considered implementing a dividend reinvestment plan? Is this something you can do?

Thanks very much, Keith. And return to dividend paying status would be very well, but obviously as we've indicated that the priority continues to be de-levering as far as the company's dividends concerned, and that is happening at a very good pace, if I can say at the moment, and that does then put us into a good position to be considering dividends. We -- the company's dividend policy remains in situ and is -- yes -- the dividend policy is to distribute between 20% and 50% of NPAT. And so as we've continued to flag to the market that we want to de-lever and resize as much as our debt as possible whilst we're in the strong market conditions, and we will then be considering dividend. And obviously, this fulfilling part of our ongoing assessment of our capital management program going forward, which Paul might may comment on.

It's an important consideration, and we're welcomed as you say, the opportunity to return to dividend-paying status as quickly as possible to adapt there. We are de-levering with them. And so that will bring that question into focus as sooner or than later, no doubt about it. We do expect there will be a net cash. We haven't suggested about March to April, but we think it'll actually be a little bit sooner than that. So this question is very important one. Another options -- all options are on the table here as far as the project means by which to return capital to shareholders. So we don't have large capital demands within the next 8 months in particular. And so whether it be dividends, buybacks, a dividend reinvestment plan, all these permutations were considered by the Board at the half year/full year turning.

Thanks, Paul. We'll get to the next question, which is an audio question from Monica Sainz.

My question is for the Chairman, Mr. Vaile. In September 2020, the company said they fell significantly short on environmental compliance. Since then, Narrabri underground mine was fined $372,500 for a list of exploration breaches and Maules Creek Mine awaits sentencing in the prosecution of the natural resource access regulator for surface water theft. Furthermore, after receiving a formal caution for landfilling off-the-road tires just months before the commencement of the National Product Stewardship Scheme for those tires, Maules Creek mine is applying for the right to bury hundreds of these industrial tires for the remaining life of the mine. How do these prosecutions, formal caution and higher landfilling reflect on Mr. Flynn? And how does the company give extra weight to these matters in Mr. Flynn's remuneration?

Mike, thank you very much for your question. The environmental issues that you raised, the Board and the company take very, very seriously. Those -- a number of those issues are historical going -- for example, the water going back 3 or 4 years ago, and the other issues going back a couple of years. And of course, we do in the remuneration packaging, particularly in the STI/KPIs have 2 measures in terms of environmental management. One is for environmental compliance in order to check measure on the level of environmental compliance and the other is with regard to incidents. Last year, in the STI, I think from memory, this is FY '20, there was about 19 on the incident list, and there was no STI paid on that last year. This year that had fallen to about 5 and that significant improvement on the past track record, and I'm not sort of going to make any excuses, but we'll highlight that during this period and just prior to that period, we've had significant changes to the management personal instruction on the ground in terms of the -- the focus on many of these issues. And so investor expectations in terms of environmental performance fair amounted in our mind. We've made significant improvement over time. We do see in the media from time-to-time reporting on issues that sometimes can be 3 or 4 years old as they come forward as the water issue was at Maules Creek. And so the -- we are through the remuneration process incentivizing much, much better management of these issues and much better observation in terms of day-to-day compliance mechanisms. Okay. We'll go to the next question -- audio question from Dr. Claire Smith.

I note that Page 10 of the 2020 annual report included an intention to grow our portfolio from a managed level of approximately 21 million tonnes in 2020 to over 40 million tonnes by 2030. I couldn't see a similar statement in the 2021 annual report. Is it still the company's intention to significantly expand its coal assets and operations to 2030 and beyond? What volume of production does management expect in the year 2030 and 2040?

Just as an overarching comment clear, it is part of the company's strategy to increase the level of production. But increase it on the metallurgical side of the equation -- increase the contribution of metallurgical coal is making to the cash flows in the company as supposed to thermal coal, hence, our -- the largest addition to our investment pipeline was Winchester South, which is a metallurgical coal mine when ultimately gets approved and developed. But I'll just say Paul to make further comment on your question.

Thank you. And I will just to add to that briefly. It's just the risk that we take there was -- as you've mentioned, Dr. Smith, stated current levels around the 21 million tonnes. If you add the capacity of Vickery 10 million tonnes now approved and the potential capacity for Winchester South up to 10 million tonnes once approved, then you certainly could surpass those levels that you've mentioned there earlier. But then on the time frame, as everybody understands theories as those statements we've made previously also vary. And given the elongated nature of the approval processes that can change. But certainly, those numbers are within the grasp of the company with its existing pipeline.

Thanks, Paul. Our next question is from Mark Horner.

About what percentage of coal is sold at spot and contract? And what is the typical length of a contract?

Paul, do you want to comment on that?

So generally our whole business is about 70% to 80% of the typical year. So we definitely like to have long-term relations with our customers and they -- the typical mix that probably isn't one, we have long-term offtakes in terms of last mile with our joint ventures and our efforts as an example. Others are actually much shorter dated but are evergreen in nature. And so even though legal tenure it might be 2 to 3 years or 1 year. They're just renewed as they roll over. We tend not to be a large spot seller into the market. And we have some little bit more spot market activity in this past 12 months, but that was principally off the back of Tarrawonga producing the fault effective coal over the last 6 to 8 months of the year. which meant that it was outside the range of our typical supply arrangement. So there's a bit more spot activity in that regard. But ordinarily, 70% is a good representation of business position.

Thanks, Paul. The next question is an audio question from Joe Alvin. There, we'll go on to the next question is from lower capital.

What if any hedging activity is being undertaken to take advantage of high coal prices.

Thanks for the question. We generally don't hedge in the paper market, how it fix prices is by dealing with end users, the consumers, and we layer that into our business. At the end of the year, we generally finish with around 20% to 30% of total coal sales having been fixed earlier in the year Okay. Our next question is from Wills.

I am the Treasurer and Committee Member of the Doris McKellar Memorial Society, a not-for-profit organization based in Canada, Northwest New South Wales. We have been in existence for almost 40 years. We run a highly regarded national poetry competition for school-age students, Australia's largest; and we are dedicated to preserving her legacy. The property Kurrumbede bought by the McKellar family in 1905 and to which the Poet Dorothea was a frequent visitor is owned by Whitehaven Coal. It forms part of your Vickery mine project. 3 years ago, we applied to nominate the Homestead and surrounding out buildings to the New South Wales State Heritage Register. That process is currently coming to its conclusion, and we along with many other Australians are hopeful it will be successful. Will your company stand in the way of the homestead precinct being declared a property of state heritage significant?

Thanks, Peter, for your question. And for your service to the Dorothea Mackellar Memorial Society, which I happen to be patent. I suppose in response to your overall question, there's a few things that we should note. We, as a company had consistently maintained the property as a local to not state per significance, and that's based on advice from independent heritage experts. The Dorothea Mackellar Memorial Society submitted the nomination. So potential state here which existing is under consideration by the state Heritage Council. Whitehaven, as a company is publicly committed to preserving the property, has committed $500,000 to maintaining the gardens, posted the first ever public open ad attracting more than 1000 visitors and continues to support the Dorothea Mackellar Memorial Society Poetry Awards. Now previous owner of this property has done more to preserve the memory of currents association with Dorothea McKellar what has worked more collaboratively with the local community groups to give them a stay in the property's future. Our commitment to care will enjoy regardless of whether it's listed on the state heritage register. Thanks to you, have another question, I think.

Landholders across the Northwest of New South Wales are concerned about the proposed Queensland Hunter gas pipeline that also runs for a significant track of your land owned at the Vickery coal mine sites. You didn't disclose the pipeline in your EIS planning for the Vickery coal mine. Where are you up to with the negotiations for allowing this pipeline on your land along the Vickery mine site? The proponent of that pipeline isn't having much luck with other landholders denying access to the gas pipeline proponent and the route seems to be being redirected via public land. Will this significant project in the Northwest affect the proposed Vickery coal mine development?

Thanks very much, Peter, and I just get Paul to comment on the technicality of that question.

In essence, Chairman, thank it won't affect us. And the nuances of many proponents applications that might cross land from is not really a question for us to answer. It's more about -- these questions has been directed to those proponents and is in is the alias pipeline proprietary limited and no impact on the Vickery mine.

Okay. Thanks, Paul. Next question is from Trehan International.

With the heightened focus on the resources sector and indigenous engagement, can you please let us know what Whitehaven is doing to support and respect our first nation peoples?

Thanks very much for the question. And just from the Board's perspective, we're extremely proud of our record in this area and working with the local indigenous community in where we operate. So I'll just get Paul to highlight some of the things that we've been doing.

We are very proud of the energies engagement. The company has brought to there over the past several years and the resulting efforts to reach the gap in terms of the indigenous advantage in the era. As a company, we are now 9% indigenous, which I'm not aware of anybody precious like that at all in the state. Maules Creek obviously was the house for the great shift in our own participation of regard, and now has about 20% indigenous. So it's a fantastic effort and something which we would see moving forward being aspirations for our future business as well. Our support is into generation. We have generations working with us. And it's not just about children and parents, but it's working with us also, but it's also dealing with the community more generally. Our support extends from preschool levels with health and schooling and deployment, obviously. We're supporting it at senior school as well and employment and then procurement with indigenous businesses in the region also has made a very, very severe step forward for us. In fact, this last year, there's been over $5 million worth or individual businesses in the area. So we think we've got some reasonable runs on the Board in this regard. There's obviously more we can do, but we certainly see this as something we're very proud of and we'll continue to put our shoulders to be able to reduce indigenous advantage in our area.

Thanks, Paul. Next question is from Mark Warner.

What is the last 12 months growth rate in heavy plants in Asia other than China?

Thanks for the question. The exact numbers, I don't have to and we can come back to you, but continuing -- and we're seeing continued growth as these countries look to support development, reduce CO2 and maintain stability of electricity grids. Asia generally has the youngest installed fleet globally of around 12 years of age. These are very long-life assets that have been invested in. And -- but the important point to make is that they require the support of companies like ours that can produce and export a high-quality product to be used in those facilities. Okay, the next question is an audio question from [Howe].

My question is for Mr. Flynn. New South Wales exploration license applications ELA-6327 and 6328 "North" were announced by the company in August then abruptly withdrawn in September after it was found application lacked ministerial consent. This application has not been relaunched. My question is, why did the application not have ministerial concern? And why has the company not relaunched the exploration application?

Thanks for the question. And I'll just get Paul to respond.

Hanna, thank you very much for that. Look, what you mentioned there is really just an administrative matter on the part of the government. I believe, in fact, we launched the application, then they asked us -- they told us or matters aware of an administrative normally on their side. And they asked us to withdraw and resubmit shortly. So that's the only -- that's the only nuance there. So administrative matter nothing more than that which hold by the government.

Thanks, Paul. Next question is also a question from Jan Nickel.

Thank you, Mr. Chair. In the 2021 sustainability report, the company models its resilience under the stated policies or steps and sustainable development SDS scenarios published by the International Energy Agency. However, the company has not assessed its resilience under the net zero by 2050 scenario. In that scenario, the IEA states, no new coal mines or extensions of existing mines are required and unavoided coal demand falls by over 98% by 2050. Can the Board explain the impact this scenario would have on our business if it came to pass in terms of demand and cash flow? Given this scenario was the central scenario of the 2021 World Energy outlook, why has the Board not integrated this scenario into its reporting? Will the 2022 sustainability report include a detailed examination of this scenario? Can I assume, given the company has not included this scenario, that its business relies on the failure of net-zero by 2050?

Thanks for your question, Jen. I answer that last part. I think the last point, I think the answer that's no. And the overarching comment is that the at the time of producing our sustainability report and reporting against TCF for FY '21, there was one multi-lateral agreement in place, and that's the past agreement. But I'll just ask Paul to go into more detail.

This is really just a matter of timing from our perspective in terms of your question. The issue here is really just the net zero emissions scenario until the fact that we have 2021 report was only very recently placed, it make it entirely for us to obviously rather be over that for incorporation into our sustainability report for 2021, which was released in August. So no suggestions we now had at all, but not to look at that. That will certainly look -- have a look at it, we're -- we acknowledge that these are scenarios and not forecasts and that -- and we need to look at all these new scenarios as they emerge. And we're staying very close to it. We are intimately engaged with the International Energy Agency through our representation on the Commentary Advisory Board of CIA. And so we look at these things in detail and so for next year, sustainability report, we'll be looking at that as another part of our assessment of our TCFD operations.

Thanks, Paul. Next question is from Robert Rock.

I appreciate that Whitehaven does not export coal to China, but could you please explain what impact, if any, the recent announcement by the Chinese National Development and Reform Commission that they intend to take measures to stabilize coal prices might be expected to have our coal prices generally and Whitehaven in particular in the near to medium term? Likewise, what is the potential impact on global coal prices generally and Whitehaven in particular if China takes measures to increase its domestic coal production?

Thanks, Robert, for your question. Well, I think that we've already seen the moves that have been taken by China in terms of increasing its domestic coal production. And at the same time, the impact of the actions that they've taken with regard to Australian coal and installing, sweeping up available coal in many other markets across the world, and it's in part given rise to the pricing that, as it stands today. I think that you hear a lot of anecdotal stories coming out of China in terms of the actual cost of the domestically produced coal by the time it arrives for consumption of power stations or steel works and it's significantly higher than global spot prices and contracted prices are at the moment. And so we're already seeing the effect or not, some of the decisions that have been taken by the NDRC, and obviously, being such an enormous consumer, we watch on a daily basis with movements that are coming out of decisions coming out of China and how that's affecting the global stable market. Paul will answer that?

I think when this coal ban came on, unofficial coal ban came on over a year ago, the market quickly realigned itself in terms of the trade flows and now -- historically, you would say is a nontraditional flow from a coal plan perspective. But that generally has been positive for us, if I could say that. Certainly, demand for our high-quality coal for lending purposes has been -- there's an extra layer of emanates across what is otherwise very strong underlying demand from each of our customers' jurisdictions. I think, long term, everyone would hope that Australian and Chinese relationships normalized need to return to a traditional flows. I don't see too much downside associated with that from us. I think that will actually be a net benefit for us overall. I have not seen recent announcements from the government -- the Chinese government to try and increase production domestically. I do note that obviously, they are approaching their winter season. And typically, they haven't been able to produce more coal ahead and during that winter period. That's often quite obviously, dangerous from a standing perspective as well, attending to do that. But I think over time, they can achieve further growth in their own domestic production, but that generally means displacement of lower-rent coals, such as Indonesian coal had announced.

Thanks, Paul. Our next question is an audio question from Eva Princi.

In June, the Federal Court found that the minister for the environment has a duty of care to protect young people from the harms caused by climate change. In his judgment, justice Bromberg found the evidence demonstrates that a reasonable person in the position of the minister was foresee about by reason of the Vickery project affected on increased CO2 in the atmosphere and the consequential increase in global surface temperatures each of the children is exposed to a risk of death or of a personal injury. I am one of the young litigants that brought the cross action against the Environment Minister Susan Lay over the Vickery Extension project. The project plans to dig up 168 million tonnes of coal over 25 years, creating 100 million additional tonnes of CO2 emissions will be equivalent of 20% of Australia's total emissions in 2019. How does the Board explain its decision to proceed with the Vickery coal mine in light of the risks caused by these additional emissions, including death and personal injury accepted by the Federal Court? Will the Board apologize to the young people of Australia for jeopardizing their future for the sake of profit?

Thanks, Eva. That's more of a statement than a question. Obviously, as you outlined, there's been a court process that the Federal Minister has been -- and the Federal Government has been involved in. There was now coming that. The Federal Minister has major decision under the PBC Act in terms of the approval. And I understand that there is further court action that the minister and the government are defending that's being done with by them, not us. We're getting on with our planning in terms of this particular project is concerned. Okay, move on to the next question, Joanne Lee Taylor.

Once debt has been paid down, and assuming prices remain fairly high, would you consider raising your dividend policy to be above 50% NPAT?

Thanks, Joe, and that's an understandable question from a shareholder. Obviously, we all options remain on the table when we're assessing and continuing to fine-tune our capital management program and the demands for capital, we had an earlier question today with regard to the alignment, if you like, of projects in our pipeline, they're beginning to require funding. Where that funding is going to come from? And -- but we take very seriously the interest of shareholders and their patience through a cyclical side of nature of our business when in some years, the dividends aren't paid and the patients that's exercised by shareholders, and we like to, obviously when we can, I think we can afford to give priority to paying dividends. We flagged the market that our priority activity at the moment is de-levering. It's reducing our level of debt that's happening at a faster rate than we initially anticipated. So it indicates we'll be moving back to enacting our dividend policy a bit quicker, if I can put it that way. And so -- but in terms of your question and changes to dividend policy, all these matters remain on the table as we scope out our strategy as far as capital management is concerned. We go on to the next question is from Robert Doodle.

Can you comment on the importance of Whitehaven's quality thermal coal in the blending with lower quality coals from other producing countries at your Asian power generator customers?

Thanks, Robert. And it's very important question. I'll just pass to Paul to give us some detail on that.

Thank you, Chair. Our coal is highly sought after as many of our shareholders understand. So not just in particular safer, it's not just the Newcastle benchmark price that we received. It's a premium well above that for both this extra energy that we deliver and the quality dimensions of it. And your question about the lending benefits of it was certainly, certainly is in high demand for that very reason. Not only are we displacing the consumption of both quality coals, but we're improving the average quality of those other low-quality coals in the market. And this is important to our Asian customer base, as you're mentioning. There are around -- there's about 17 countries who have incorporated the consumption of high-quality coal in better technology power stations as a component of their NDCs that have been with past coal. And so in our business, we are certainly enabling business introductions pathway of our customer countries jurisdictions. And that makes us feel pretty good about what we're doing to contribute to that transition to a lower emissions future.

Thanks, Paul. Next question is from Praveen Vistar.

As current shareholders, why should we continue to remain shareholders when the price of coal is all-time high, but stock is trading very low, and world is moving away from coal?

Thanks, Praveen. Look, we would encourage shareholders to remain invested in our company. We're in the upper ex-lounge of the quality product part of the market, if you like, as is just outlined by Paul. That would give us -- put us in a position of being -- having our product in demand for decades to come as the world goes through the process of transition. And it's not to say that, at some point in time, the fossil fuels will remain a part of the energy mix for a significant period of time going forward. Sure, we see fluctuations in stock price. And the market cap at the moment is not as low as it has been. It's come off a little bit as the adjacent use spot price has come up. But we're still experiencing a lot of strength or seeing a lot of strength in the forward curve as far as pricing is concerned. And we think that, ultimately, our share prices directly correlated those stable and coal prices. Of course, there's always an impact at around about this time when there's a lot of commentary in the meeting here, it happened during the period of the Paris Climate Change meeting. There is an impact from the commentary around the Glasgow meeting and what's going to happen at the Glasgow meeting. But we will certainly still encourage to remain shareholders in this company, it certainly got a very bright future. At least Paul wanted to add some comments?

I will just make the simple point for shareholders that that there's a full an upside in our share price and the future of the company. While spot prices are very high, as you say, that's very important, but the share price is obviously not a of the spot price on the day. And as we pointed to you earlier, there's a very, very robust supply-demand fundamentals if we look into the out years. And the forward curve certainly would indicate that there are better than at the historical levels of average price available to us. And so if you back sold to the implied coal price for our share price today, there's still a bit of upside for shareholders.

Thanks, Paul. Next question is an audio question from Karen Large.

Thank you. I have a question for the company regarding the bond issue that was announced to the financial review. Mr. Paul stated to the Australian financial review that the bond issue was delayed by the ever grand crisis in China. I would like to know when the bond issue is likely to occur. I note the coal price is temporarily at near-record highs. How does this bear on the timing of our bond issue? Is the bond issue something shareholders can expect to see before Christmas?

Yes. The issue, the bond issue that you refer to is not being impacted upon by coal prices. It's impacted the global bond market. I'll just get Paul to a comment on that.

Yes. Thank you, Chair. Look, the statements from our CFO our appropriate or what he's referring to and what we acknowledge is that given the generations in the Asian bond market and principally off the back of the property market disruptions that we're seeing there, which I've already referenced, there is some caution on our part in terms of broadening out our base of sources of debt capital. We are -- we think it's a right -- the right strategic move for the company to diversify. We don't need it now. We were and are comfortably banked with no near-term maturities for our existing debt. In fact, because we're delivering so quickly, we'll be, as I said, net cash very shortly. So we'll do a lot of time of our choosing and -- but we'd rather not give our tone to the orders that are evidencing some disruption from sectors out there.

Thanks, Paul. And as questions and audio question from [Roman Bust].

Thanks, Mr. Chairman. In 2017, the Maules Creek coal mine was elevated to the highest environmental risk rating possible by the New South Wales Environmental Protection Authorities. What is the current environmental risk rating for the following 4 mines, please, Maules Creek, Narrabri, Tarrawonga and Werris Creek? And have any of these 4 mines had their status changed in the last 12 months, please?

Thanks, [Roman]. And you referred to a rating back in 2017. And as I indicated in an earlier answer, the management of environmental issues at all our sites and particularly Maules Creek since 2017, seen, firstly, some significant management changes and focus on our responsibilities, and we have seen a significant decrease in the number of environmental incidents at all sites. And so in answer to your question, that rating would have significantly improved from where it was back in 2017, and the trend line continues to go down as we continue to bring greater focus through our different internal mechanisms on the responsibilities we have in terms of management -- managing any of these issues. Now our next question also an audio question from Christine Cook.

Good morning, and thank you, Mr. Chairman. I note that on Page 24 of the 2021 Sustainability Report, the company's states Whitehaven is a signatory to the Minerals Council of Australia's Climate Action Plan, which was released in June 2020. The plan details the mineral industry's commitment to the goal of net zero emisson. Can the Board confirm that it is the current company position to support the goal of achieving net zero emission by 2050?

Thanks for your question, Christine. And I'm going to get -- as Paul a Board member of the MCA, I'll get Paul to comment on your question.

Look, we're certainly part of the world and supporting the cloud action plan released by the MCA. And also more recently, we support the ambition of net zero emissions in 2050 as also outlined, but we do acknowledge that the MCA is an overall judge in terms of the risk, but we are represented berate Board as the Chairman has noted, and we supported for that ambition.

Thanks, Paul. Okay. The next question is from -- it's an audio question from Helen. Okay. Next question is also an audio question from Loretta Alan.

Good morning. My question is about the sustainability report. On Page 25, the company acknowledges that there's a medium to long-term transition risk posed to the company by reduced access to funding and insurance. As I'm sure you're all aware, organizations are moving away from coal mines. So specifically in the report, these states were also exploring alternative sources of funding and insurance. Can you please describe what those are? And what implications this might have for the expenditure of Whitehaven and also for shareholders?

Thanks very much for the question, Loretta. Obviously, on an annual basis, we review our financial structuring, our capital management, the the debt component of that and where our finances are coming from, as we do insurance and it's to be prudent. We always go to the market and get the best available insurance package we can on an annual basis and that policy disposition will continue as far as that is concerned. We had a question a little while ago about the bond issuance, and we -- it's no secret we have been -- we intend to replace part of the debt structure in our capital management structure with a bond when the market condition is conducive to what we want to do. And so we are continuing to take steps in that regard. We're very fortunate at the moment with the market circumstances that prevail that we are less and less reliant on debt capital on a daily basis, if you like. And we're reducing our exposure to banks on a daily basis. But obviously, going forward, where we have a couple of projects in the development pipeline, we're doing to need some debt capital to go into those possibly joint venture partners as well as any accumulated cash that we can retain to invest in those new projects. Paul, do you want to add to that?

No, we could have reference.

The next question is an audio question from Nickel.

Thanks, Mr. Chair. Is it correct to conclude from your previous answer about the net zero emissions by 2050 issue that Whitehaven will be including the net zero emissions by 2050 in its 2022 sustainability report?

Paul?

Thank you, Chairman. We'll certainly look at it as I say, the reports only just recently been tabled. We've reviewed the previous report on net zero emissions 2050. Obviously, all of these reports are complex, although they are relatively short on detail. I hope reports note that available technologies and emerging technologies won't be sufficient in order to get us to there. In fact, the sustainable 2070 is the first time through which existing technologies can get us to net zero emissions. But we'll certainly review it. As I said earlier, it was just a matter of timing and that to be incorporated to us on annual report, but we will go for this year.

Thanks, Paul. The next question is an audio question from Murray Flood.

My question is about the Chairman versus the Minister for the Environment case in the Federal Court. After it was resolved, Whitehaven issued an ASX announcement stating that our current position has been that this legal claim was without merit, and that the court has dismissed proceedings. However, the court actually found a novel duty of care existed that finds the minutes just to be in the climate, a duty that was considered by the government to be meritorious to the extent that it's now the subject of an appeal in the full branch of the federal court. The court also determined the minister would pay the entirety of the applicants cost. In these circumstances, does the company now accept that its ISX statement was both preemptive and misleading?

Thank you for your statement and question, Maria, and simple answer to the last part of your question is no. I'm just going to hand over to Paul for a bit more detailed comment.

Thank you, Chair. Certainly the basis of values was about the basis of the junction. And so just to clear and also, obviously, the minister has approved the project. And in the site of the presence, it is the reasons why interview is due to care has been continued informing our view to approve the project. Honestly, as we've previously referenced, the federal government is appealing the underlying basis of all strategic care. So I mean, further questions in that regard might be best directed to the federal government.

Okay. Thanks, Paul. Next question is from the Capital.

Other than debt reduction and a dividend payment, are any other capital management strategies being considered, for example, buybacks at appropriate price, special dividends, et cetera? Thank you for your hard work over the past year, and, hopefully, you are enjoying the better times at the moment.

Thanks very much to the Capital for the last part of their comments there. Obviously, when the management and the Board are reviewing capital management strategies, all these elements are on the table and under consideration whether it's -- the dividend policy, share buybacks at a primary prices, any special dividends and how we are managing the capital structure and the demands on that going forward in terms of our existing assets, sustaining capital requirements and the development pipeline that we had in front of us. And so all those things are taken into consideration and considering that on balance in terms of the current status of the company's balance sheet and P&L. Okay. We're going to the next question is from Helen Lawrence. So the question, I apologize, Helen that you been able to get through on the audio. So this question is from Helen?

On the topic of bonds, could management explain the rationale behind only conducting the company's first bond issue now? Why has the company previously preferred bank debt finance to bond issuance as a means of capital raising? A bond is more expensive forms of debt instruments for the company compared to debt finance? Can you please give me a sense of the kind of interest rates that a typical bond issue would attract compared to what we might pay on a syndicated bank loan? If bonds are a less preferable option, why are we not pursuing bank debt finance?

Thanks for your question, Helen. I'll just flip back to Paul in a second. But obviously, we have a mix at the moment of debt financing facilities in terms of our semi debt facility leasing arrangements and the like. And we are currently very compliant in terms of all of our banking covenants, but certainly looking to the future, the company wants a bit more flexibility in terms of its debt structure. The company is far more mature today than what it was, say, 3 or 4 or 5 years ago as far as capital raising is concerned. We have, I suppose, accumulated a very good track record in this regard, and that's important in terms of getting the sort of credit ratings that are required to get out to the bond market to get competitive rates. So there's a lot of different moving parts in this. But I suppose, ultimately, we want to put ourselves in a position of maintaining the greatest flexibility as far as our debt structure in our capital management process is concerned. I just -- Paul would you like to add to some of those?

I think just to add a couple of more things. The company is far more sure now than it's been in the past. And we have looked at this in the past as to your curiosity about why now. So they looked in the past. In fact, we're very close to doing in previous occasions and it would appear that the few are missing out for the domestic banks conspired to them sharpen their offer to avoid us going to those markets. Now the attraction, obviously, with the bond market is a very deep markets. And once established within them, having been rated, you can -- you can refinance quickly. And that suits us to have a diversity of both sources of funds rather than just being captive to one domestic footprint here. So we've said very much from our perspective has been assigned the during business. There is a small capital cost -- or carry costs associated with being in the one line. But being a much deeper market, it's far more of just of who was sponsoring.

Thanks, Paul. Our next question and audio question from James Haywood. I think Jay is there. We've had a little bit of a problem with some audio. Okay. The -- we've now come to the conclusion of our Q&A session. As there are no further questions, I will shortly be closing voting. I ask all shareholders who have not already submitted their votes to do so now. I'll pause for 60 seconds to allow shareholders to finalize their votes. [Voting]

Thank you, the time for voting has now expired. I now close the poll, and the results for all resolutions will be displayed on the screen. There we go. As you can see, resolutions 2 to 5 have been passed, and resolutions 1 and 6 have not. As a result, will we not be voting on Resolution 7 today. Ladies and gentlemen, that completes the formal business of this meeting, and I now formally declare the meeting closed. And again, thank you all very much for your attendance. And we look forward to seeing you again next year's AGM. Thank you.