BHP considers early closure of Mt Arthur coal mine, Westpac eyes CBDCs and Woodside records quarterly production
BHP is evaluating the closure of the Mt Arthur coal mine ahead of its initial 2030 target, due to government regulations.
BHP (ASX: BHP) is reportedly considering the closure of its Mt Arthur coal mine in New South Wales ahead of its 2030 target.
The potential closure is due to the state government’s coal reservation scheme and a coal price cap announced by the federal government last year.
The state government requires thermal coal miners to reserve up to 10% of their output for domestic coal-fired power stations.
In December, the state government imposed domestic coal reservation and price cap orders on NSW producers to offer at least 18.6 million tonnes into the domestic market.
The federal government introduced a 12-month price ceiling on domestic coal of $125 per tonne in NSW and Queensland.
BHP New South Wales Energy Coal vice president Adam Lancey wrote a letter to staff this week saying that Mt Arthur would redirect 1.5Mt coal for domestic use at a reduced price of $125/t.
The letter also mentioned concerns about the impacts on operations, business models, local communities and infrastructure, commercial partnerships, and meeting obligations to customers and the energy market.
“In light of these directions, we are actively reviewing operational plans and existing commitments to understand their implications. And, while I would like to avoid this scenario, the findings of this review may lead to a reassessment of our Pathway to 2030 plan,” Mr Lancey wrote.
NAB tests stablecoin cryptocurrency
National Australia Bank (ASX: NAB) has created a stablecoin cryptocurrency called AUDN, tied to the Australian dollar.
AUDN is aimed to be launched in mid-2023 and it was announced it will start being tested shortly.
AUDN was created on the Ethereum blockchain in December 2022 and NAB also plans on expanding it to the Algorand network. It will soon start testing its use with internal transactions before expanding to other use cases.
In the future, AUDN may also be used for carbon credit trading, overseas money transfers, and repurchase agreements.
NAB aims to use AUDN in cases with “high friction and clear customer benefit.” The bank will focus on the benefits of the coin in the corporate and institutional banking sectors.
ANZ Group Holdings (ASX: ANZ) was the first of the big four banks to create an Aussie dollar-linked stablecoin, creating and transacting with its A$DC in March 2022.
The Australian government has promised to establish a framework for licensing and regulation of crypto service providers in 2023.
Westpac eyes CBDCs
Westpac Group (ASX: WBC) is interested in central bank digital currencies (CBDCs) as they could act as a form of electronic cash and be issued by central banks.
This is according to a report published by the bank on Monday. CBDCs could tackle issues with private cryptocurrencies such as high costs, slow transaction times, and price volatility.
Westpac sees the “revolutionary possibilities” of using CBDCs as a foundation for a more efficient and interoperable digital financial system.
“Some of the more revolutionary possibilities lie in using CBDCs as a foundation on which to build a more efficient and interoperable digital domestic and global financial system,” Westpac senior economist Jarek Kowcza said.
Scalability is a significant hurdle for cryptocurrencies, and stablecoins also have their own challenges.
Westpac has since launched a search for a principal architect for digital assets and cryptocurrency in July 2022, indicating its intention to enter the cryptocurrency and blockchain space.
Meanwhile, the Commonwealth Bank of Australia (ASX: CBA) believes mass market adoption of a CBDC in Australia is still “some years away”.
The Reserve Bank of Australia and the Digital Finance Cooperative Research Centre are exploring the use cases of a CBDC in a year-long research project.
Woodside Energy posts huge growth in revenue
Woodside Energy Group (ASX: WDS) posted a 78% jump in four quarter revenue in its results posted last Wednesday, slightly ahead of analysts’ forecasts, due to strong liquefied natural gas (LNG) prices and its takeover of BHP Group’s petroleum assets.
The company is on track for a record profit of around $5.6 billion in 2022, but forecasts for 2023 are for a slight fall in profit due to weaker oil and gas prices.
Woodside Energy chief executive officer Meg O’Neill said the near-term outlook for gas prices is clouded by factors such as European winter temperatures and Chinese economic recovery.
Ms O’Neill also said the jury is out on the outlook for LNG prices in the near term.
The company remains confident it can start producing gas from its biggest project, the $12 billion Scarborough development, and Pluto LNG expansion, in 2026, despite new consultations with Indigenous groups required by the Federal Court.
Woodside’s outlook of production growth of 4% a year to 2027 is based on its major projects already underway, despite the government’s plans to control gas prices.
Fortescue posts record half-yearly results
Fortescue Metals Group (ASX: FMG), the large iron ore miner which is also working on green energy and decarbonisation efforts, posted its half-yearly results for 2023 this week.
During the period, Fortescue had its strongest-ever quarter of shipments (49.4 million tonnes) and increased its half-year shipments by 4% year-on-year.
The company had an average revenue of US$87 per dry metric tonne (A$123.50/dmt), with C1 costs of US$17.17 per wet metric tonne (A$24.37/wmt), 3% lower than the previous quarter. Fortescue is on track to reach or exceed the upper end of its iron ore guidance for FY23.
The company has started civil works on the installation of a solar farm and established a framework agreement with the government of Kenya to develop green ammonia and green fertiliser facilities.
Fortescue spent $226 million in the first half operating its green energy division and $57 million on decarbonisation initiatives.
Fortescue chief executive officer Andrew Forrest said the company has made progress on its iron ore interests in Gabon, an electrolyser facility in Gladstone, a battery facility in the United Kingdom, and green energy projects worldwide.
Mr Forrest believes the demand for green energy is immense and the company is confident that the global capital markets will support its five green energy projects to reach the final investment decision in 2023, with the first production in 2024.