Annual Review 2020

FY20 Highlights

 

0
Mt
ROM Production
0
.0Mt
Saleable Production
0
Mt
Sales Volume
$
500
M
Revenue
$
0
M
Adjusted EBITDA
($
0
)M
Reported Net (loss) Income after Tax
US$
0
Operating Costs Per Tonne Sold
US$
0
Group Realised Metallurgical Coal Price
0
%
Net debt decrease

25.2Mt

ROM Production

17.0Mt

Saleable Production

18.2Mt

Sales Volume

$1,462.3M

Sales Volume

$53.8M

Adjusted EBITDA

($226.5)M

Reported Net (loss) Income after Tax

US$76.5

Operating Costs Per Tonne Sold

US$90.5

Group Realised Metallurgical Coal Price

7.1%

Net debt decrease

About Coronado

About Coronado

Coronado Global Resources Inc. is one of the world’s largest producers of high-quality metallurgical coal. Through our market-leading expertise, we operate some of the safest, cleanest and lowest cost mines in the industry. Our coals, transformed in the steel making process, support the manufacture of every-day steel-based products and social infrastructure that enrich lives around the world.

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FY20 Full Year Results

FY20 Full Year Results

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From the outset, the 2020 financial year presented a range of significant challenges to our business and our people. The first half was particularly difficult, and I am proud of the way in which our people responded to a constantly changing environment and slowing global economy.

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ASX Announcement

2020 Annual Report

Meeting the COVID-19 Challenge

Meeting the COVID-19 Challenge

The past year has been defined by a single, historical global crisis. The COVID-19 pandemic has distressed communities across the world, disrupted global markets, and changed the way we interact with one another. The virus has had an impact on every aspect of our business. It not only created disruption and uncertainty, but it also provided us the opportunity to demonstrate our genuine commitment to the health and safety of our employees and their families. We believe the company’s stakeholders will remember how they were treated during COVID-19; that we further built our reputation for being concerned about the well-being of our employees and that we distinguished ourselves among our competitors.

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Managing through COVID-19 and the Market Downturn in 2020

Covid

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COVID-19 Safety Protocols

Preventative measures implemented across all mines in Australia and the US to protect the health of our workforce.

Restart

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Restart US Operations

Buchanan and Logan resumed operation on 1 June 2020 after being idled on 30 March 2020. Operating at lower levels that meet domestic and export contracts. Greenbrier remains idled.

Capex

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2020 Capex Review

2020 capex reduced by 40% from original guidance range of US$190 – 210m. Curragh Expansion deferred until met coal prices normalize.

Bank Covenant

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Bank Covenant Waiver

Agreed with SFA lenders to waive compliance with the financial covenants until 30 September 2021 and to release certain assets from the existing security package.

Equity

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2020 Equity Raising

Successfully raised gross proceeds of US$180m to repay debt and improve liquidity. Equity raise also increased free float and the Company was added to the ASX300 Index in March 2021.

Production Right Sizing

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Production Right Sizing

Production rates have been analyzed to ensure operations can respond to the current pricing environment.

Inventory

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Inventory Management

Inventory levels are actively managed to achieve balance between stockpiling costs and meeting customers’ demand, as well as positioning for a recovery in met coal prices.

Other Liquidity Levers

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Other Liquidity Levers

Curragh non-core Heavy Mining Equipment sale and leaseback completed (US$23.5m proceeds). Further initiatives to improve liquidity continue to be explored.

Legend:

COVID-19 initiatives

Operating initiatives
Financial initiatives
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Completed
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Ongoing

Operational Overview

Curragh

Number of active mines1          

Two opencut mines, Curragh East and Curragh North, utilising draglines, a rope shovel and hydraulic excavators

Types of coal products

High-quality low-vol HCC, SCC, PCI and thermal coal

Key customers/markets

Met coal exported to international steel mills throughout Asia, Europe and South America. Thermal coal primarily for use by Australian domestic power station (Stanwell)

Expansion projects

Stanwell Reserve Area, MDL 162

1 Active mines at May 2021

Buchanan

Number of active mines1          

One underground mine with longwall mining system

Types of coal products

Low-vol HCC and premium low-vol PCI coal

Key customers/markets

North America customers and export destinations, including China, Europe and South America

1 Active mines at May 2021

Logan

Number of active mines1          

Four underground mines (Lower War Eagle, Powellton, Eagle 1, Muddy Bridge) and one surface mine (Toney Fork – idle from March 2020)

Types of coal products

High quality high-vol HCC and SCC met coals, PCI coal and thermal coal

Key customers/markets

North America steel makers and export destinations, including Europe, South America and India

Expansion projects

3.2 Mt mineable Reserves adjacent to existing Logan operations

1 Active mines at May 2021

Greenbrier

Number of active mines1          

One underground mine (Mountaineer 1 – idle from March 2020) and one surface mine (Midland Surface – idle from March 2020)

Types of coal products

Premium quality mid-vol met coal, PCI and thermal coal (including activated carbon specialty markets)

Key customers/markets

North America steel makers and export destinations, including Europe, Asia and South America

1 Active mines at May 2021

FY20 Performance Summary

For the Year Ended 31 December 2020

1 All References to “EBITDA” means EBITDA adjusted for FX and non-recurring items
2 All volumes are quoted in metric tonnes

Steel Starts Here

Coronado is a leading metallurgical coal producer and trusted supplier to the global steel industry.

Metallurgical coal is an essential ingredient in the production of steel, which is the most utilised metal in the world and an essential material underpinning social and economic growth. Steel’s strength and durability make it critical in the construction of major infrastructure projects, transportation technology, electrical equipment, and everyday household goods such as appliances.

As the world’s population continues to grow and urbanise, steelmakers and their suppliers will play a vital role in providing quality products that support a wide variety of uses well into the future.

Production of Steel

When iron is combined with carbon, recycled steel, and other elements, it is transformed into a much stronger material called Steel which can be 1,000 times stronger than iron.

Wide use of Steel

Steel is essential to modern society and is used in a range of products from rails, roads and vehicles to steel cans. It is used to deliver our food and water and enables energy generation and transmission. Steel is an essential material in the construction of generators and motors for electric vehicles and wind turbines and will play a key role in the transition to a low-carbon environment.

The amount of steel used in the world reached 1.7 billion tonnes in 2019. Steel markets are broadly as follows:

Sustainability of Steel

Steel is 100% recyclable and can be reused infinitely. On average new steel products contain 30% recycled steel. Steel products are durable and last a long time, with the average life span for a steel product being 40 years.


The strength and durability of steel has made it the most important material in our everyday lives.

Its multi-functional nature allows for broad use in everything from major infrastructure projects, to transport including cars and airplanes, and even common household appliances. Steel is also a core component of next generation renewable energy solutions such as solar and wind farms and can also be recycled, making it uniquely sustainable material to be used for generations to come.

Energy consumption per tonne of steel

reduced by 60%

since the 1960s, which has contributed to a significant decrease in CO2 intensity

Steel offers the most economic and the

highest strength to weight ratio

of any building material.

Source: World Steel Association

Sustainability

Coronado’s Sustainability Principles

Support the health and wellbeing of our people by maintaining a safe workplace with the ultimate goal of zero harm.

Respect our environment by minimising the impact of our business activities and rehabilitating affected landscapes.

Be a valued and active member of the local communities in which we operate by delivering economic benefit and engaging in an open and transparent manner.

Build teams of engaged and motivated individuals that understand the positive social and economic relevance of what they do.

Operate fairly and equitably with suppliers and customers and generate superior and sustainable returns for security holders.

Coronado’s Total Economic Contribution1
1 Tax Paid, Salaries and Wages, and Payments to Contractors and Suppliers are provided on a cash basis. Tax Paid excludes GST.

Sustainability Report

With a clear focus on the safety and wellbeing of our people, local communities, customers and the environment, our company is well positioned for sustainable growth into the future and will continue to have a positive impact on a broad range of stakeholders that are integral to our business.​

CEO Gerry Spindler

Downloads

Sustainability Report
Sustainability Report Databook

Bringing a Mine to Life

Exploration

Exploration is the commencement of the mining process and represents the start to community employment and economic contribution including surveys, drilling, permits, mine technical analysis, legal and financial consultation and planning. Curragh has recently increased its coal resources by 81mt, some of which will be contemplated for underground mining.

Mine design

Part of the mine planning and analysis, site design, mining methods and infrastructure requirements are assessed. The outcome of this assessment will determine the infrastructure required at a specific mine site to allow commencement of operations and contracting with communities further contributing to employment and the economy. All safety and environmental factors are considered and permitted before the next phase.

Mine construction

Construction is a significant undertaking which, dependent on the project, can involve investments of millions or even billions and provide employment and contributions to local and international communities for decades. Construction is a continuous process and Coronado have plans to accelerate the expansion of Curragh mine to achieve saleable production of 15 mt per annum in the near future.

Production

During the production phase mines will provide essential resources such as metallurgical coal to suppliers used in the manufacturing of Steel. Coronado produced 17.0mt in FY20 of which 79% was metallurgical coal, and 21% as thermal coal which is used by power plants for electricity capacity predominantly to communities in Australia and North America.

Rehabilitation

Mines offer a finite resource and do have an end to their production life. Both progressively and at the end of mining, mine sites are required to rehabilitate areas disturbed. Coronado in FY20 recognised Asset Retirement Obligations (ARO) provisions of $ 131.8 million for future site end of life closures.

Positive Metallurgical Coal Outlook

Forecast demand for seaborne metallurgical coal is underpinned by the growth of India’s blast furnace production over the next decade
India’s seaborne metallurgical coal demand is forecasted to grow at CAGR 4.9% from 2021 to 2030. This is supported by blast furnace production expected to increase from ~51Mt in 2021 to ~99Mt in 2030. Increased demand from India will assist in balancing the Australian coking coal price reliance on China

Australia is expected to continue to be the dominant producer in the supply of seaborne metallurgical coal. Supply is forecasted to increase from 175Mt in 2020 to 190Mt in 2030. Expected production growth is supported by a combination of brownfield expansion and greenfield development.

Growth in supply critical to meeting expected demand growth is likely to be impacted by three core issues:
1) access to financing for greenfield developments
2) permitting of projects
3) need for high-quality steel for infrastructure

Board of Directors

William (Bill) Koeck

  • Independent Non-Executive Director and Chair
  • Compensation and Nominating Committee (Chair)
  • Audit Governance & Risk Committee
  • Appointed: 21 September 2018

Garold (Gerry) Spindler

  • Managing Director and CEO
  • Appointed: 21 September 2018

Greg Pritchard

  • Independent Non-Executive Director
  • Audit Governance and Risk Committee (Chair)
  • Health Safety Environment Community Committee
  • Compensation and Nominating Committee
  • Appointed: 21 September 2018

Philip Christensen

  • Independent Non-Executive Director
  • Health Safety Environment Community Committee (Chair)
  • Audit Governance and Risk Committee
  • Appointed: 21 September 2018

Laura Tyson

  • Non-Executive Director
  • Compensation and Nominating Committee
  • Appointed: 13 August 2018

Sir Mick Davis

  • Non-Executive Director
  • Appointed: 25 June 2020