Whitehaven Coal to ship 70k tonnes of coal to Ukraine to fight Russia

Australia is a long way from the Ukraine, but our coal sector is now at the heart of the largest land war in Europe since 1945.

As Vladimir Putin’s war on Ukraine rolls into its fourth week, Ukrainians have found an unlikely source of support: Australian coal companies.

This week, 70,000 tonnes of thermal coal from Whitehaven Coal will be shipped to the Ukraine to support the country’s battered power generation sector, part of a broader multimillion-dollar support package from the federal government designed to help Ukrainians thwart the first large-scale land war in Europe since 1945.

Prime Minister Scott Morrison said the coal could power up to one million homes in Ukraine.

“It’s our coal, we dug it up, we’ve arranged the ship, we put it on the ship, and we’re sending it there to Ukraine to help power up their resistance,” he said.

Resources Minister Keith Pitt said the support shipment from Whitehaven had come about swiftly.

Dawson LNP candidate Andrew Willcox (left) and Resources Minister Keith Pitt visit the Bravus thermal coal mine northwest of Clermont on March 21. Thermal coal prices have escalated in recent months and the war in the Ukraine has added to the frenzy. Picture: Contributed

“The request from the Ukraine was a specific request and was turned around very quickly,” he said.

“It was fortunate Whitehaven did have capability given the very long lead times on contracts for most of Australia’s thermal coal.

“This is incredibly important to the people of Ukraine and where we can help, Australia will help.”

Alongside heating homes, Mr Pitt said the coal could be used to keep the country’s manufacturing sector and hospitals going.

In the longer-term, Mr Pitt said Australian thermal coal would continue to power the world.

“The reality is very straightforward,” he said.

“The world relies on our coal to keep the lights on.

“Whether that is in Japan or South Korea or others.”

Mr Pitt argued Australia was naturally positioned to supply Southeast Asia, though Europe could emerge as a new market for producers.

“We are better positioned to supply Southeast Asia simply because of logistics,” he said.

“But at what price is keeping the lights on?

“That’s the ultimate question in Europe.

“In terms of the long-term opportunities, I have always said publicly and privately and will continue to do so, that people buy from Australia because the quality of our coal is so much higher, we are such a reliable supplier, our logistics chain is second to none, and they can count on us when it matters.”

Whitehaven holds thermal and metallurgical coal assets in Northern NSW and hopes to open up a new $1bn mine near Moranbah called Winchester South.

Winchester South boasts JORC reserves of 350Mt.

Whitehaven Coal managing director Paul Flynn. Picture: John Feder/The Australian.

If approved, the mine would produce up to 17Mt of thermal and metallurgical coal annually over a 30-year lifespan.

In a statement released on Sunday, the company expressed its pride in partnering with the government to support Ukraine.

“Whitehaven is proud to be a part of this humanitarian effort and to help deliver the inputs for essential energy and heating in circumstances of extreme and ongoing suffering for the people of Ukraine.

“In a very tight supply market, Whitehaven has been able to commit this important shipment while ensuring contracted customer demand is met.

“Whitehaven will work closely with the Australian Government and one of its key supply chain partners, Trafigura, to ensure the prompt delivery of the cargo.”

The company has also funnelled $250,000 to the Australian Red Cross Ukraine Crisis Appeal.

Whitehaven is not the only coal business to back the Ukrainian resistance.

Bowen Basin giant BHP has pledged $6.7m in humanitarian assistance to the Ukrainians, $2.7m of which will go toward providing shelter, food and access to medical care for the four million Ukrainian refugees expected to seek refuge from the conflict in neighbouring countries in coming months.

Mr Pitt said there were many reasons to be thankful for Australia’s coal sector.

“They pulled the country through, in terms of our economy, right through the pandemic,” he said.

“They are doing record levels of exports.

“We’ve got some 270,000 Australians directly employed, over one million direct and indirect.”

“It’s how we pay for essential services.

“It’s how we pay for roads and schools and hospitals.

“I’m proud of those hardworking men and women and what they are doing and now they are able to provide assistance into the Ukraine, who are been basically torn apart by Russian forces and Mr Putin.”

A mother nurses her child as she reacts after a residential building was hit by debris from a downed rocket in Kyiv on March 20, 2022. Picture: Fadel Senna, AFP

Prices for thermal coal have risen dramatically in recent months and the war in Ukraine has added to the frenzy.

The share price of many thermal coal producers has also skyrocketed.

In the pst year, the share price of TerraCom Resources, which operates the Blair Athol thermal coal mine near Clermont, has exploded by almost 400 per cent to hover at 44 cents a share as of March 21 after bottoming out at 8 cents a share in March 2021.

In an ASX announcement on March 18, the company noted it had sold one of its cargoes of coal for some $400 per tonne.

In a visit to the Bravus Carmichael mine complex on Monday, Mr Pitt also touted a new $1.5m government program to help Australia’s METS businesses crack the Indian market.

“When China stopped taking our exports, a lot of those exports were picked up by India, so it’s important we continue to build those relationships and this money just supports that work,” he said.

“The program will deliver a greater understanding of the Indian mining sector, enabling greater market penetration by Australian METS businesses.”

Mr Pitt said about 40 METS companies were currently active in India.

Australian METS sector peak body Austmine will lead the program.

Originally published as Whitehaven Coal to ship 70k tonnes of coal to Ukraine to fight Russia