Middle East war increasing demand for Australian coal
Derek Rose |
The fallout from the Middle East war is prompting Asian countries to rethink switching from coal to gas to meet their energy needs, a major Australian producer of the fossil fuel says.
The comments were made by the boss of New Hope Corporation, which produces mostly thermal coal and has operations in NSW and Queensland, where it operates a bulk handling facility at the Port of Brisbane.
“In recent days, we’ve seen impacts for gas supply and heightened concern over that, which will make countries think about the switching potential,” chief executive Rob Fisher told a results briefing on Tuesday.
“Certainly, from a stability of shipping lanes, coal from Australia is a much safer bet than some of the other sources for gas.”
Korea had essentially turned to Russian coal on the back of the Ukraine crisis, and wasn’t taking much, if any, Australian coal, Mr Fisher said.
“That’s now changed, and we’ve had some inbound requests for supply to Korea,” he added.
At the same time, Indonesian coal quotas and production stoppages in China are also impacting prices.
Australian coal going through the Port of Newcastle in NSW in recent days has been selling for about $US146.75 a tonne – the highest level since the US and Iran were engaged in intense fighting in June.
New Hope revealed on Tuesday that while it had beaten its full-year production guidance, it had posted its smallest profit in five years due to higher mining costs and new equipment purchases.
It posted a $161 million net profit for the 12 months to July 31, down 63.4 per cent from the $439 million it made in 2024/25.
The owner of the Bengalla coalmine in the NSW Upper Hunter region and the New Acland Mine in southeast Queensland faced higher costs associated with “prime overburden movement”, or the excavation of rock and soil to expose mineral deposits.
It also had higher depreciation associated with plant and equipment purchases at its two mines.
The group produced 11.5 million saleable tonnes of coal, up 7.6 per cent from 2024/25, while its actual coal sales rose 11.8 per cent to 11.8 million tonnes.
New Hope believes coal’s share of global power generation will reduce over time, but the sheer increase in global power demand will support coal prices in the meantime.
Existing coalmines were aging and there had been underinvestment in new projects, suggesting a potential supply shortfall and an attractive pricing outlook for the industry, Mr Fisher said.
New Hope declared a final dividend of 30 cents per share, taking the total payout for the year to 40 cents, up from 34 cents a year ago.
New Hope shares were more than four per cent higher at $6.54 in afternoon trading.
AAP