18 September 2020

Statement on resolutions promoted by Market Forces

Whitehaven Coal’s Board is today recommending that shareholders vote against resolutions promoted by Market Forces, requisitioned by a group of shareholders representing 0.003% of voting shares on issue, to be considered at the Company’s Annual General Meeting on 22 October 2020.

The resolutions:

• Seek an amendment to the Company’s Constitution to provide that members can pass advisory resolutions in relation to the exercise of powers vested in the Board; and
• Request that the Company disclose a plan annually that demonstrates how it will wind up its production assets and operations in a manner consistent with the goals of the Paris Agreement

As outlined in the Notice of 2020 Annual General Meeting released today, Whitehaven’s Board recommends that shareholders vote against these resolutions for a number of reasons.

The suggestion that the Paris Agreement requires Whitehaven to wind up its production assets and operations is a misrepresentation. The Paris Agreement does not dictate how emissions reductions should be achieved. For example, in Japan, Whitehaven’s key export market, high quality coal remains part of the Government’s Nationally Determined Contribution to achieve its emissions reduction ambitions.

Under the International Energy Agency’s (IEA) World Energy Outlook (WEO) scenarios there will continue to be global demand for coal beyond 2040.

Whitehaven’s business is leveraged to the continuing forecast demand that exists in Asian export markets, where rapid electrification and the relative youth of the installed power generation fleet means coal will generate value for Whitehaven stakeholders for decades to come. We are also responding to growing demand for metallurgical coal products in India.

Whitehaven produces some of the highest quality coal available in the seaborne market. Our semi-soft coking coal is a critical input to steel-making processes and is low in impurities such as ash, sulphur and phosphorous, making it an attractive component of coke blends. Our high-CV and low impurity thermal coal, like much of the thermal coal produced for export in Australia, is used in modern highly efficient low emission (HELE) power stations overseas, which are assisting in the transition to a lower emissions future.

Whitehaven has a positive role to play as part of this ongoing transition – by meeting the projected increases in energy demand stemming from population growth and economic development in our near region, while making a practical contribution to global carbon emissions reduction efforts. As a large-scale producer of high energy, low impurity thermal coal, Whitehaven is also 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 seek to reduce their emissions while maintaining the stability and reliability of their electricity grids.

The positive future for NSW coal was recently acknowledged by the NSW Government in its Strategic Statement on Coal Exploration and Mining in NSW, which stated “coal mining is an important industry for NSW and will continue to be so for the next few decades.” Indeed, the NSW Government sees a role for coal in what it considers “a responsible approach to the global transition to a low carbon future, consistent with Australia’s ambition under the Paris Agreement.”[1]

Whitehaven also reports against the voluntary framework of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures and undertakes annual resilience testing of its operating asset portfolio. Based on our analysis, Whitehaven exhibits long-term resilience and value generation under each of the IEA’s WEO scenarios, including the Sustainable Development Scenario, the most aggressive decarbonisation scenario contained in the WEO. Whitehaven remains committed to meaningful disclosure on climate change risks and opportunities for shareholders.

Whitehaven has no intention of shutting down its mining operations.

For more on Whitehaven’s perspectives on its role in a more carbon-conscious world and its approach to sustainability, please refer to the Sustainability Report 2020, released today at www.whitehavencoal.com.au/sustainability-report-2020

[1] Strategic Statement on Coal Exploration and Mining in NSW, released June 2020

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