It’s with the surety providers who provide guarantees/ insurance...

It’s with the surety providers who provide guarantees/ insurance for reclamation.

The issue with Peabody though is the PCI price has fallen from ~$500/t to ~$170/t in the space of around 6 weeks. Over half of Peabodys ~$600m EBITDA in Q2 was met sales. Some rough numbers says you could shave $250m off that $600m EBITDA for Q2 by revising met to spot.

Their PRB thermal ops are loss making (this year), and whilst they have NSW thermal ops that do ~18mtpa - 8mtpa of this is to AGL at a loss and the remaining 10mtpa of export is (mostly) not of Newcastle spec with the 5500kcal high ash selling for ~$200/t vs NEWC at ~$400/t. They also have legacy thermal hedges made at $85/t they need to deliver into.

Don’t get me wrong - I certainly don’t see it as expensive, but when weighing it up against Whitehaven who has no restrictions on distributions (ex passing increased buyback) and sell practically all product at a Newcastle spec I see Whitehaven (A$5bn EV) as a far better risk/reward play over Peabody (A$4.3bn EV) over the medium term. I’m Aussie too so I’m biased.