Valuation

Originally posted by saintex: ↑

@WizzardofOz
I did some research on your question. My understanding : the key figure is not the production, but the saleable production, which is more or less in line with the volume of sales, looking at NHC figures for the last 2 years.
The "raw (saleable) production coal is coal that is saleable without requiring further processing".

Interesting also to see that NHC gets a much higher proportion of saleable production from its main mine (Bengalla in NSW) than in its other mine (New Acland in QLD).

To come back to your initial question, WHC and NHC seem to have a similar valuation, looking at recent results (I think in term of EV/EBITDA). But one of the main difference is that NHC volume of production is expected to decrease more rapidly than the one of WHC (natural exhaustion of their mine potential). The discount between WHC and NHC is also explained by the uncertainty linked to the recent CB for NHC.

One element we need to take into account about coal is the consequences for coal consumers if thermal coal remains at this level of price for a certain period of time (6 months or more ?). Difficult to think that there won't be any substitution with another resource.
It will probably push towards the construction of more nuclear power stations, given the low uranium price (plenty of reserves in the world, with no real limit to the production), while there is a low level of carbon emission with nuclear power.

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.@ Saintex TUVM. To my knowledge it takes many years (around a decade nowadays ) to get a new nuclear plant approved and built in developed countries and the bill is v v high. Delays are very common.
But If i recall well in Europe, especially in Germany they have moved away from nuclear so a reversal is highly unlikely. Germany already closed 8 of its plants and the last 9 will close by end 2022 ! To be precise 3 have already closed, 3 will close by Dec this year and the last 3 by Dec 2022. In the UK nuclear generates 17% of electricity (gas 38%) but half of the plants will close within the next few years .A new plant Hinkley Point C is being built at a staggering cost of $ 22B., slated to open in ..2026, .the first in decades. France is the outlier with nuclear generating 70% of electricity but with a slowly declining production . It closed one plant last year and 14 reactors will close in the coming years..France and Germany have even been forced to reopen some coal powered plants !
Indonesian coal supply cant help much right now following heavy rains that dampened production, some mines declaring force majeure and output falling by 10%-40% in other mines.
In the meantime in India..data on Sept. 27 showed that 101 coal-fired plants have stockpiles worth less than eight days of coal burn (down 75%), with as many as 89 plants left with four or lesser days of coal burn. India waited for too long to start restocking, thinking that prices would soon correct. They now find themselves blindsided by both high prices and lack of supply.
I believe high coal prices will last at least till spring. How high is impossible to predict. But i can sit back and wait for the bumper profits of NHC.