The Coal Trader

Stanmore Resources Rides Met Coal Boom, Eyes Production Growth in 2024

Australian metallurgical coal producer Stanmore Resources capped off a stellar 2023 with steady production and a strategic acquisition, solidifying its position as a key player in the thriving market.

Q4 Production Holds Steady, Full Year Soars:

  • Saleable production in October-December remained flat compared to the previous quarter at 3.4 mt but jumped 9.7% year-on-year, exceeding the 3.1 mt achieved in the same period of 2022.
  • For the full year, Stanmore saw a remarkable 43.5% increase in saleable production to 13.2 mt, fueled by the May-October acquisition of the Poitrel and South Walker Creek mines from BHP Mitsui Coal.

CEO Marcelo Matos Highlights Strengths:

  • Matos attributed the strong performance to improved logistics capacity, better rail network performance, and continued tight supply of prime met coal materials.
  • Stanmore further bolstered its portfolio in December by acquiring the remaining 50% interest in the MetRes joint venture, streamlining operations and securing additional production from the Millennium and Mavis Downs mines.

Record Output from Expansion Projects:

  • South Walker Creek achieved record saleable production of 6.3 mt in 2023, representing a 57.5% jump from 2022.
  • Poitrel and the Isaac Plains complex also saw significant increases, reflecting successful integration and ongoing development efforts.

Expansion Plans Drive Future Growth:

  • A mid-2024 expansion at South Walker Creek will boost its run-of-mine capacity to 9.4 mt/y, translating to a 7.0 mt/y rise in saleable production by 2025.
  • Development of Pit 5 North at Isaac Plains East is underway, expected to add 1.4 mt of saleable production annually upon completion in March 2024.

Challenges and Outlooks:

  • Stanmore cautioned about potential weather disruptions in Q1 2024 due to recent storms, potentially impacting supply chains in the short term.
  • FOB cash costs are expected to rise in 2024 due to inflation, foreign exchange movements, and strip mining changes.
  • The company commenced exploration at its Lancewood and Nebo West projects, with a pre-feasibility study for Lancewood scheduled for April-June.

Financial Snapshot and Strategic Positioning:

  • Stanmore held US$446.0 million in cash at year-end 2023, with a net cash position of $126.0 million after tax payments.
  • The company delivered phenomenal financial results in 2022, with post-tax net profit surging 10,597% to $727.4 million and revenue soaring 852% to $2.69 billion.

Stanmore Resources is riding the wave of the booming met coal market, strategically expanding its production base and leveraging its strong financial position to capitalize on future growth opportunities. With a focus on operational efficiency and exploration initiatives, the company appears well-positioned to further strengthen its position in the global met coal landscape.