Current industry coal price forecasts are consistent with over 2.5°C of global warming. With just a 10% drop from these prices, in line with implementing existing climate policies, constructing the proposed new mines would not add shareholder value compared to simply running off existing assets.

Published by Market Forces, 4 Oct 2023. Download the full report here. 

Key findings

  • Market Forces modelling of Whitehaven Coal’s cash flows shows the company’s proposed new coal mines aren’t resilient to even small shifts in coal prices.

  • Current industry coal price forecasts are consistent with over 2.5°C of global warming. With just a 10% drop from these prices, in line with implementing existing climate policies, constructing the proposed new mines would not add shareholder value compared to simply running off existing assets.

  • Scenarios that factor in stronger government climate policies imply even larger price drops, threatening value destruction.

  • Whitehaven could instead recover billions of dollars for shareholders this decade by simply running down its existing assets.

  • Given the immense risks to long-term coal demand, investors must push for a more responsible strategy of axing growth projects and accelerating capital returns.


Despite increasing calls from shareholders to preserve capital rather than risk it on new coal mines that are incompatible with global climate goals, Whitehaven is pursuing the development of several large new coal mines that would see the company producing coal past 2050. Given the increasing risks to demand in Whitehaven’s core markets and beyond, management should, at a minimum, be able to prove to shareholders that its assets and plans are financially resilient outside the heady coal markets of the past two years. Yet the company has shared no such analysis with its investors.

To cover this glaring gap, Market Forces has built a model that projects the company’s free cash flows (FCF) using many of Whitehaven’s own assumptions and data, as well as those of the wider industry.

The purpose of the model is to evaluate shareholder returns under two scenarios: one where the company pursues its aggressive organic production growth plans (the “Expansion” scenario), and one where the company simply runs down existing assets according to their current approvals (the “Operating” scenario).1 2


Whitehaven isn’t resilient to even small declines in coal prices

Our results show Whitehaven’s growth plans quickly stop making financial sense on a net present value (NPV) basis even under small downward shifts to coal prices, compared to the median industry price forecast as collated by KPMG. These baseline price forecasts are incompatible with existing policies to restrict climate change, let alone the major further policy shifts that must be enacted for countries to meet their commitments to the Paris Agreement’s climate goals, as shown further below. At prices 10-20% lower than this unreasonably optimistic benchmark, the company would barely be able to generate cash to return to shareholders, and would risk actively destroying value.

Source: Market Forces analysis
FCF is modelled out to 2060 and is presented net of growth capex

A 10-20% drop in prices is far from a tail risk. Thermal coal prices in the International Energy Agency’s (IEA) Stated Policies Scenario (STEPS), which factors in existing government policies and is consistent with 2.5°C of global warming, are already some 9% below the median industry forecast. This is even more pronounced in IEA scenarios modelling climate policy moving towards alignment with the Paris goals, such as the Announced Pledges Scenario (APS, 50% chance of limiting warming to 1.7°C) and Net Zero Emissions by 2050 scenario (NZE, 50% chance of 1.5°C), where thermal coal prices are in the order of 26% and 37% lower than the KPMG median, respectively. If applied equally to its thermal and metallurgical portfolio, Whitehaven would be loss-making under either scenario.

Investors must call for a more responsible way forward

Whitehaven stands at a crossroads. With its three growth projects yet to receive final investment decisions, the company can still choose a path forward that is both more financially predictable and less reliant on the utter failure of the Paris climate goals, and the entirely unacceptable economic, social and environmental outcomes of such a scenario. Shareholders must therefore seize the opportunity at the company’s upcoming AGM to request more rigorous planning and disclosure by the company, demonstrating production and capital expenditure plans that are consistent with the pathway to net zero emissions by 2050.

Download the full report here.