Thank you for standing by, and welcome to the Whitehaven Coal December Quarter Production Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Paul Flynn, Managing Director and CEO. Please go ahead, Paul.
Good morning, everybody, and thank you very much for taking the time to join us today for the December 2021 Quarterly Report. I'll go through the highlights as usual and go through our document, and then we'll get to the Q&A as soon as we can. Certainly, I'll just run through these highlights. Certainly, the backdrop of all of this is obviously a very strong price environment, so we've put there for you the average achieved coal price for the period of $211, which has been excellent, obviously, compared to not just previous years, but even a step up on the last quarter as well. December Quarterly Managed ROM Production at 3.2 million tons. December Quarter Managed Saleable Coal Production just under that at 3 million tons. Our total Managed Sales of 4 million tons for the period and our own portion of that at 3.5.
When you break that down to our own coal sales at equity level, we're at 2.9. Stocks at 2.1 million tons are reasonable, down from about 3.2, I think, last quarter. We have been drawing some of that. Cash generation has been very good, and I'm sure we'll get to that in the Q&A. We are still on track to be net debt or net cash position in March of 2022. Longwall transition was actually completed on time, which is good, 109-110, and I'm sure we'll talk about a little bit later on, but that's very positive. The quarter has seen two externalities which are driving our business to some degree. We've obviously had very wet weather across the state, which everybody's seen, reported on the media, and Gunnedah Basin got a hell of a lot of that, perhaps disproportionately so.
So that has caused production to slide to the right, which we'll talk about in a minute. And then, of course, having not been exposed to COVID cases for nearly two years, Omicron obviously is teaching us how to deal with that to some degree, and I'll talk about that and its effect on our business through this discussion. Now, as far as guidance, we'll get to that later, and we have updated our guidance based on both the weather and the COVID impacts. From a safety perspective, our TRIFR has gone up to 6.1 during this period. That's a little higher than what we'd like. Pleasingly, the severity of the instances that we're having is lower, but in total number, that's not where we want to be, so there's definitely some work to do on that.
On industry basis, we compare very well, but that's not really the standard we hold ourselves to. A brief discussion then over the page just in terms of ROM production sales and stock volumes. I'll just touch on this weather so I can give everybody a bit of a sizing impact of that. We have been receiving significant above-average weather rainfall, and that did culminate in floods in the area, I'm sure, which many of you who watch the news would have seen in our area. And in fact, at Maules Creek and partially at Gunnedah CHPP and also Tarawonga, but for Maules Creek in particular, we lost access there for a good two weeks. And so we did evacuate people out of site, used helicopters to bring essential service people back into the site to maintain all our environmental monitoring and safety-related regime during that period.
But as a result of not being on site, and so when you know you're not on site, you're obviously clearly not processing, washing, stacking, and certainly not loading trains during that period. About 600,000-700,000 tons have slid to the right for Maules Creek. And in the case of Gunnedah Open Cuts principally Tarawonga, the effect of that is about 100,000-200,000 tons being deferred. Now, COVID itself, as I've mentioned, we haven't been touched by COVID cases for nearly two years, which has been tremendous, but that's changed now. And during December, we certainly had started to see the impact of that in the number of people self-isolating, and there are associated impacts with that, not being able to have the full complement of manning that you need to man all the equipment on the day.
The impact of that is about 200,000 tons in the quarter. I'll get to the guidance update for you in a minute. The tables there, as you normally see from us, I won't go through the top one given I just said that at the outset, but the equity numbers you can see is roughly about 80% of the totals above, cutting across both equity ROM saleable sales of our coal purchase and also stocks. Coming down to Maules Creek, Maules Creek, most of you will recall we were only on line to do about 2.6 million tons in this quarter given the 13 million ton per annum rate limit on a calendar basis for the mine.
That weather impact I've just mentioned previously took the wind out of our sales for basically the total of that difference between the 2 million we've done and the 2.6 we potentially could have done to get to the 13 million tons, which is disappointing. Sales volumes, as you can see there for the quarter, 1.8 have been below. Equity metallurgical coal sales at only 250,000 tons representing 80% of production for the period. Coal stocks at the end of the period at 1.3 million tons. We have been drawing those down, of course, and you'll see the stock movements period on period. Overall, Maules Creek is going well, but yes, the weather and COVID-related impacts have been annoying, but we'll get to the impacts of that for guidance in a second. Narrabri, pleasingly, the changeout has occurred largely on time, which is excellent.
That's not to say that labor tightness hasn't sort of given us some issues to manage there. It's really just about a juggling act from us because we did redeploy some of our development crews into the relocation effort just to make sure that that did occur on time. There is a trade-off there, obviously, with development float, but we don't see a problem right now on that. But we're just highlighting labor is certainly tight. The ROM production for Narrabri was obviously understandably only modest there at 415,000 tons. Saleable coal is just converting inventories into saleable coal. The sales themselves are about a million, so we've obviously drawn down our stocks, and the stocks at the end of the period are 319. I think that was about 600 higher, about 950 in the previous corresponding sorry, in the previous quarter.
No PCI sales during the course of the period, and the cut-and-fit timing for commencement is a little bit later based on contractor and supplier labor shortages, so we're calling that now for late Q3. The next longwall move from 10 to 203 is in late Q3 and therefore in 2012. I should actually say I missed the point that the step around will be in this year, and so that from 110A to 110B is going to start in May of this year, and the importance of that we'll get to with the guidance. To the extent that there are delays for COVID and other things, it's really just there's no real tons lost in Narrabri, if I can say that, essentially from a guidance perspective. Gunnedah Open Cuts, I'll just go straight into Tarawonga. Tarawonga, like Maules Creek, did actually suffer from weather-related delays there.
ROM production there at 600,000 tons was less than what we were looking for in the period. Saleable coal production of 400,000 tons is 24% down. We are washing more at Tarawonga as we previously discussed in the last quarter just because there's obviously a massive opportunity with the spreads between the lower CV markets and the 6,000. So we are washing more coal, so there is a trade-off there between yield and higher margins. But overall, Tarawonga is going okay, but yes, we did have some haulage access issues there getting to the plant, and the mine itself also suffered from access issues.
Not as bad as Maules Creek, I have to say, but clearly the weather was more pervasive up the northern end of our footprint rather than the lower end because when I come to Werris Creek, which is usually the rain gauge for our operations, it's actually got through pretty lightly, which is good. So it's obviously the southern reaches of it. And so our production there at 273 was broadly in line with expectations, and that rolls through into the following stats as well. So as everyone knows, that's a bypass mine, so the saleable really just varies in terms of drawing stocks, whether we did that this period or last. That explains the difference from the two.
But Werris Creek has been operating well and thankfully has skirted through the impacts of the weather reasonably well, although it's not immune to the absenteeism we're seeing associated with the COVID-related isolation requirements. We did move this table for equity coal sales and realized pricing a little bit later in the document because it probably relates better to the outlook area. So we've just juggled that around. Those numbers are there for your consumption. The one thing we did throw in there that's in addition to what we've previously given you was the average coal price in Aussie dollar terms, which is most relevant. So the AUD 211 that I mentioned earlier, AUD 189, obviously for the previous quarter, so I think we're about AUD 201 more or less there for the first six months, which is obviously a very good result.
GC NEWC averaged 184 for the period, as you can see in the documentation there. We did hit a high of 222 for the quarter for a quarter settlement, so that's for monthly settlement in October, so that's very positive, and the backdrop does look very good. From a sales mix perspective, we have a little bit more of the lingering out-of-spec Narrabri coal still in on our stockpile, and we'll just blend that through some sales had slipped with the logistical delays we've seen, which I'll cover in a minute, had slipped into this second half. That's relatively modest in terms of its impact, and we'll bleed that into the higher spec coal sales during the course of the next six months.
It doesn't materially impact the business too much, thankfully, because it's relatively modest, and we still will be able to maintain GC NEWC plus average for the second half, which is what we previously said to you. So yeah, look, the market looks pretty good, and I think we look forward to significant cash generation, what was always going to be a bigger second half, but obviously with some weather impacts, it's made it slightly bigger on top of that. The outlook, of course, everybody can see that for one of a number of reasons, whether it be weather-related or production curtailments or redirection of sales in the export market, as we've seen in Indonesia into their domestic requirements. Market's very tight. Customers are coming to the market looking for sales.
We have seen a couple of bids or tenders being opened with no bids, so that's obviously indicative of the fact that we've got a very tight market on our hands, and some customers have actually gone away with lower-ranked coal than what they're intending to buy, so that, again, reinforces the notion that the market is pretty tight and that the vessel queue that you can see off the coast at Newcastle is symptomatic of a shortage of coal right across the coal chain, so it's not just the tons that we've missed out due to weather. Relatedly, obviously, the logistics update, really just to let you know that the port certainly has been up and down a little bit in terms of the consistency of its ability to bring boats in.
The weather has played a part in not just high winds and swells, but also then the rainfalls that we've received flushes a hell of a lot of fresh water through the port, and when that occurs, you can't bring the bigger ships in because of buoyancy reasons, so there's been a little bit of an impact there, as you can see. We're quoting about 50 ships there across the two ports at the end of the quarter. From a hedging perspective, the normal hedges we've put in place have been augmented by further hedges that we've taken out just to lock in some what we thought to be a good currency position for the balance of this year.
So it doesn't extend past 30 June, so it will unwind quite quickly, but we've put an average in there at 71.8, as you can see, for a decent portion of our US dollar revenue for the second half. Just quickly on the projects, I'll just call out a couple of highlights. Narrabri, some of you would have seen that's been recommended for approval, Stage 3 , which is very positive. I mean, that was supposed to happen before Christmas, so a bit annoyed about that not being able to hold the IPC hearing ahead of Christmas, but that is what it is. But it has come out now, and I believe the IPC hearing is scheduled for mid-February, which is very positive. We'd like to move that forward.
Vickery, you know, we're still waiting on the resolution of the appeal of the case against the Federal Ministry for the Environment, so no major change there. But our public exhibition for Winchester South has concluded. We've got some feedback now from the Coordinator-General's Office on submission, so we'll work through with them to clear those out over the next few months. Over to guidance. As I say, there's lots of. I'm sure I'm just belaboring a point here. There's lots of unpredictable aspects to this, weather-related, obviously being one. We're seeing plenty of weather up in the north still, and we've had our own impacts more localized. And then, of course, COVID has caused a 5% decrease in our expected ROM production for this period. So we have reset our guidance in that sense to 19 to 20.5. And then that cascades through the individual mines themselves.
Maules Creek at 11.3-11.7, Narrabri 4.3-5. Now, that hasn't changed, as you can see, and that is, as I mentioned earlier, the comment that if there are some delays there, it does eat into the changeout time. So a little bit of the changeout time might slip into the new financial year, but the ROM volumes should largely be deliverable in this year as a result. Gunnedah Open Cuts a small variation there. We do have a bigger run home for all our mines, as we always said at the beginning of this year, that the second half would be bigger than the first. And so there is a related cost impact for these things, though, as you can imagine. I'm sure you've heard many companies before us in the last few days of this week talking about diesel prices.
Certainly, the impact on us is about $3 a ton we're estimating for the year. It's been a significant jump, obviously, from up to, what, $90 now, so $0.90, sorry. So that's a big change. Demurrage cost associated with disruption in coal supply and production, that's $2 for us. That's, as you know, the take-or-pay under absorption that occurs when we're unable to get the tons into the market as we would hope. The volumetric impacts of flooding, there's about $2 in that, and COVID absenteeism, $1-$2 is a further impact. So our range for cost of coal now is 79.84. As you can see, lots of those impacts are relatively temporary, but they are there, and we should just call them out.
Now, the basis of that guidance, the note there we put at the bottom of the guidance reflects the continuation for the remainder of FY22 of the recent COVID labor experiences that we've had. So we have taken a relatively conservative position here in doing this, projecting continued labor shortages as a result of isolation requirements and extended that out to 30 June. Like everybody, we've been using some medical services advisors to give us a view in terms of just formally owning our strategies in terms of how to manage COVID and the RAT surveillance programs that we've got running across our business, which has been well received. They're saying that Omicron will run off relatively quickly, but obviously not as quickly as it ramped up.
And they're calling potentially a peak of it around about now, if not a week away, but around about now, and they're saying that by the end of February, we should be on the other side of this. Now, we've taken a bit more of a cautious approach to that than what these medical services consultants are telling us, and we've put that into our guidance here just to be on the cautious side of things. So if that doesn't play out the way that we've envisaged, then we can see ourselves moving back towards the end of the middle of the guidance rather than sort of the downside, which is the continuation of COVID impacts the way they currently are affecting us. With that, I'll bring that to an end. We'll get on to the Q&A. I think so.
If I might hand back to you, operator, then we can move into the questions that are in the Q already. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question.
Your first question comes from Rahul Anand with Morgan Stanley. Please go ahead.
Hi, Paul Flynn . Happy New Year. Thanks for the opportunity. I might start with the first one on volumes. So you've identified about 1.1 million tons of volume impact due to rainfall and COVID. The guidance cut today is about 1 million tons. I guess I wanted to understand what type of a contingency do you have in the new guidance in terms of NSW reaching that peak in February or maybe first or second week of March. So just trying to touch upon the contingency. And I guess the second part of that question is, Narrabri, you've had some delays, but as you said, no change to guidance. Is that all going to be met by stocks being drawn down? I'll come back with another question. Thanks.
Yep. Thanks, Rahul. Yeah, look, the 1 million tons that we've lost to date, we certainly think we can claw back some of that and have done a little bit of that already just in the opening weeks of this month. But the second half is going to be bigger. We think we can manage that. So we've put some contingency in there, as I say, just on the COVID side of things in particular. So if that advice that the runoff of cases and things by the end of January is much better, then there's upside. But based on what we've seen, we've certainly chosen to extend that a little further just because our experience to date hasn't been the same as the national average. And so that's why we're cautious on that.
We know that there's regional impacts that the government only really talks about the national average or the state average, and our regional impacts are somewhat different to that. So we think we can manage the second half, which is larger, as I said, anyway, in order to reach those milestones. Sorry, the second half of the question was.
Narrabri.
Narrabri. Yeah. Look, Narrabri, we've got to finish the panel, I suppose, is what I'm saying. So I'm talking about ROM production here, whereas what you said there was more related to sales in your second part of your question. We've got to finish the panel. So if there's slippage because of COVID-related impacts, say, for instance, or production issues, then a bit more of the changeout falls into the next year. But it's unlikely that the scale of any of those changes or the scale of any of those impacts would actually see us not finishing the panel or 110A in this financial year, the balance of this financial year. So we don't expect to see any ROM production issues there associated from delays or COVID to change the guidance numbers.
Now, you quite rightly pointed out that, of course, if that's the case and tons have hit the deck in the profile that we would have liked, then there will be some further sales impacts, which has been factored into the sales guidance we've given there. As you can see from Narrabri currently, there's some stocks, but there's not huge stocks on the ground at Narrabri. And we do want fresh coal to blend away some of the balance of the remnant coals that we have from the last panel sitting on the ground as well. But the key thing there is the ROM target's likely to get used, but there might be some potential for some slippage there from sales, which has been taken into our sales guidance.
Perfect. Thanks for that. Next one is for Kevin. I was just going to touch upon the GC NEWC pricing discount, Kevin, going into, I guess, the second half of FY22. Obviously, some volume delays now being faced given logistical challenges and also production. How should we think about that discount for the second half of FY22, please?
Rahul, good question. If you have a look at the stocks to the left at Narrabri, there's about 400,000 tons, I think. I'll go back to the last page. Sorry, 319,000 tons. That's principally been the source of the below GC NEWC material. Now, in the second half, we're going to have production out of Tarawonga, Werris Creek, Narrabri with fresh coal, and Maules Creek continuing with its quality. So our expectations are that the second half will be GC NEWC plus, I think, is the answer that I have in my head. First quarter might be GC NEWC a little bit minus. Second quarter will be GC NEWC plus. On average, GC NEWC or GC NEWC plus for the second half.
Yeah. Just on the port and amount of ships, it's interesting to note that the weather impacts are largely gone. That's not to say we won't have further weather impacts, but the demurrage impacts that we're seeing and the shipping queue that we've observed there in our note today, that's really about coal shortage. It's coal availability across the whole of the industry exporting out of Newcastle.
So there's definitely some tightness in there one way or the other, whether it was weather-related, which is more our case, but thankfully is gone. We're not having any difficulties in getting our product through the port at the moment. So I do expect that 50 number will come down relatively quickly in the second half. But it seems like there's a shortage of coal right across the market, which obviously speaks to the $215 average price that we're seeing month to date at the moment.
Yes, indeed. Okay. Final question from me. You've talked about net cash position by March. I guess this question's been asked before, but how are you thinking about reinstating the dividend once the debt is paid off? Should we be thinking about anything at the mid-year, or is it fair to say we defer it till the time you've fully paid off or in a stronger cash position post-payment?
Yeah. Look, Rahul, I think we'll just leave that comment that we've left in the document to stand on its own. We've got our half-year results out in four weeks' time, and so we'll be saying more about that. It'd be fair to say we're open-minded to all the necessary means of conveying returns to our shareholders who have been patient. Obviously, the business has generated good cash. We're on a very positive path there. So I think you'll see something more clearer from us with the half-year results on this. But as I say, open-minded. All measures will be on the table in terms of how we want to deal with that.
Okay. Perfect. That's all from me. Thank you very much for the time.
Thanks, Rahul.
Thank you. Your next question comes from Lachlan Shaw with UBS. Please go ahead.
Morning, Paul, Kevin, and Flynn. Thank you for the update and happy new year. So I've just got a couple of questions on pricing. So obviously, right now, GC NEWC has rallied pretty hard again. Just interested in how you're seeing the outlook there. Obviously, gas prices are coming down. China's production of coal is up. How are you thinking about the JFY settlement coming back through this year? And I'll come back with a second question shortly.
Yeah. Well, I think all these aspects are important to it. I think, obviously, the Indonesian position plays into that to some degree as well, Lachlan, which we understand that is easing, although it's not clear the rate at which that Indonesian withdrawal from the export market, the pace at which that ease will occur. So we see further tightness. Our customers really are screaming out for coal, so we'd love to have a bit more. And I think that underpins a good market going forward. Gas prices, you say, are eased. That's good, but coal's still very competitive on that basis. So look, it's definitely a much improved market from what we've seen in the past. I mean, just look at those average revenue numbers a year ago versus now, and that's quite a considerable change.
Yep. Sure. Thanks. And then just the second question, again, on pricing relating to met coal. PLV. Queensland's hitting record highs again. Wet weather tightness and COVID disruption driving through there. Semi-Soft is following or starting to follow at least. How are you thinking about the mix between Semi-Soft and Thermal, and do you think you'll try and wash more where you can?
Yeah. We're certainly washing for the purpose of the thermal premiums, not washing for the purposes of incremental Semi-Soft sales. Just so we're clear on that. We've renewed our term business for Semi-Soft sales, and that's been very positive. So we're happy to do that. And we observed the Platts spot prices increasing, as you're indirectly referring to. But we haven't been chasing any particular Semi-Soft sales over and above the term business we had. We don't think there's actually a lot of volume sitting behind that Platts number at the moment.
And in our sense, it's still very worthwhile to be sending our coal into the thermal market with the prices we're achieving. So I'm not looking for a major change from a met coal to thermal split in our business at all. I think we'll service those existing longer-term customers and wait until we see further real volume substance behind that spot market in the Semi-Soft in particular.
Great. Thanks. And just to follow up, if I may, you had a comment that Semi-Soft demand was weak in the quarter. Any insight you can help us with there?
I think the challenge there with Semi-Soft is that the incremental buyer of Semi-Soft was always the Chinese. And they're not been in the market, obviously, for OZ Semi-Soft coal for a long time. So we've been talking about this for some time. We've not chased incremental sales, whilst that participant in the seaborne Semi-Soft trade has been absent. They're satisfying their own needs largely through additional production within China. So just to say, the spot price has gravitated upwards, as it should, with the PLV going the way it has, as you already referenced. But what's the substance behind that? We think it's relatively thin. And so if you're trying to get away some good volumes at that level, I think that might be a challenge.
So in our instance, our conclusion there is we should continue to focus on our good long-standing relationships in Japan, Korea, India, and Taiwan. And so we've renewed those term business. But yeah, we don't see the depth in the market still in the Semi-Soft market. We don't see that returning, quite frankly, until we see perhaps China reengage in the Semi-Soft side of the industry. But obviously, if it's Australian sourced, that's a problem.
Understood. That's really helpful. Thanks very much, and I'll pass it on.
Thank you. Your next question comes from Paul Young with Goldman Sachs. Please go ahead.
Hi, Paul and Kevin. Hi, Paul as well. First question, Paul, is specifically on Maules Creek and around the wet weather situation that's been wet into the new year. Where are you at the moment at that mine, specifically to nameplate mining rates? And then secondly, the labour and weather issues. Have they impacted the truck automation rollout program there much? And also at Narrabri, just on the underground development, the float, have you had any impacts on the forward development?
All right, Paul. Thanks for that. We've got a few questions in there. Look, Maules Creek, once we were actually the weather didn't do much damage to the site itself, like in terms of rework and things and roads that needed to be rebuilt. That wasn't the issue. The issue was just lack of access. So the roads feeding into it, the highway itself, and then the roads off the highway to the mine were cut. And so the river swelled and took over all the access points. So getting back to mining rates wasn't the problem or wasn't the issue. Restoration of the site wasn't the problem. Getting back to mining rates, they've only really been affected by the absenteeism that we've seen associated with dysfunctional state border arrangements. That seems to be easing as it relates to Queensland.
And then obviously, Omicron causing some absenteeism on a daily basis where people are getting alerts saying that they need to isolate. And so that's really the issue for us now. Running at the rates we want to, the downside of that guidance is predicated on us having an ongoing cohort of absenteeism throughout the balance of the year. But we don't think it'll. We certainly hope it won't be that bad based on the advice that we've, as I mentioned earlier that we're receiving, that this will wind off. They're saying every week we've taken a more conservative view of that. So Maules Creek's in decent form. I was out there earlier in the week, and the pit's looking very good. And so I'm not concerned in that regard. AHS hasn't been running for a little while, and we're looking to start that up next month again.
The issue there was really just over the Christmas period with lower amounts of people and so on to work the system. It's been a little challenge. There were some areas in being able to sustain the AHS separated and segregated from the manned side of the pit. So we took a pause on that while some software upgrades had been dealt with. And I can get Ian to talk to that a little bit more. And then, sorry, the Narrabri one?
Narrabri float.
Oh, the float. Look, the float's in hand, but yeah, we're consciously watching that. We don't put too much float in it. We want it to be too little. So that's not an issue right at this point in time.
Yep. Okay. Thanks, Paul. That sounds pretty positive on Maules from a mining perspective. So that's great. Next question for Kevin. Kevin, thanks for that information about where you think pricing will end up versus NEWC. That's really helpful. Just further to just on pricing, as far as your sales volumes are concerned, are you fully sold for this half? You said you don't have a lot of coal available, and there's a lot of obviously interest in additional tenders. Are you fully sold? And secondly, can you and are you looking still of locking in sort of fixed higher prices on a more of a half-year sort of yearly basis?
Yeah. I'll let Paul talk about the fixed price because he's the guy who signs the contracts. Look, I'd say we're pretty much fully sold. That tonnage that dropped out of the guidance would have been the variable tonnes that we would have been selling in the second half of the year. Now we're fully sold. And so my expectation is that the second half volume will be bigger than the first half volume.
It's got to meet the guidance, Paul. Our expectation is that prices will remain relatively elevated, and therefore we're really comfortable looking at those numbers around retirement of the revolver in February and being net cash in March. And we've held that position now since about August, September last year. So it's been a constant in the discussion in the business. The impacts of wet weather and COVID pretty much taken care of. You can see the impact in December. So my take here is the second half is going to be a pretty good second half. I'll probably say a cracking second half.
Yep. Just on the fixed sales, we're not changing that markedly, Paul. We did, obviously, as you can see, took the currency out of the equation to a reasonable extent. Not, of course, all of it. I mean, we're within our policy there to do that. And that's, I think, 60% of revenue can be hedged. So we've taken the currency off the table, if you like, for about 60%. And we have been picking the eyes out of various opportunities and contracts where we have an option to swing into a fixed price on some of our sales. So we have been looking at that and have taken a number of those opportunities already, which will help us underpin, of course, a GC NEWC plus type average in the second half, actually.
That's been positive, even though the market's looking very buoyant anyway as it is. That's been good. The balance of the fixed price stuff we have is, as you would imagine, just the out-of-spec or the out-of-GC NEWC spec material. That's all generally on a fixed price basis rather than a floating for the month, as you know. No material change there.
Yeah. And the guidance for that, Paul, is if you have a look on the corporate side of there, there's about $99 million worth of fixed price forward sales.
Pretty much normal.
Yeah. Normal. And there's about AUD 700 million floating, which is only a proportion of the total revenue in the second half.
Yep.
Okay. Understood. All right. Well, thanks very much. And looking forward to your February results. That's it for me.
Okay.
Thanks, Paul.
Thank you. Your next question comes from Peter O'Connor with Shaw and Partners. Please go ahead.
Morning, Paul. Kevin, happy new year. Page five, table on equity coal sales and the sales mix. Paul, just thinking about the current quarter and the quarter ahead, so March quarter, June quarter, it feels like net coal sales will stay low, so circa sort of 12%. So how does the mix between high CV and other change over the next two quarters? With Narrabri heading back to normal, do we see that 60%-ish number tick back up?
Yep. Yep. Thanks, Peter. Yeah. Sorry, I wasn't quite sure where that was the end of the question. Normally, you ask two or three at a time, but.
Oh, I've got another one coming.
Yeah. Look, met coal, it'll tickle up a little bit, actually, because, as I said just now, we have re-signed some contracts with term business. So there might be a tickle up in that a little bit. The other thermal coal, the 27% that we've registered here, that we have seen a few sales, as I mentioned earlier, slipping into the second half. With fresh coal coming out of Narrabri, the production of that coal is much diminished. So it returns back to its 59 to 61 hundred type range that it works within. So second half, as we were saying, we're going to have a GC NEWC plus. That's not to say we don't have a few sales of out-of-spec coal in that second half, but it won't be influential in being able to maintain a GC NEWC average for the second half, as we previously stated.
We are watching, as I mentioned, more at Tarawonga, and that's sweeping that coal up. There'll be no material out of GC NEWC presence from Tarawonga, whereas Maules is, as you know, at the 57-type range. That will be the majority of the coal that gets sold in the second half, where it's sold as a discrete product. Otherwise, it will be blended up with the additional washed coal that we have out of our other operations.
Medium term, Paul, where does that other thermal coal percentage go? How much does it compress?
Yeah. Look, we're blending, obviously, to minimize the impact of Werris, just because, obviously, the margins are so good if you take the blending option rather than trying to have discrete sales into what's largely a Korean spec product. And we've only got three years left of Werris Creek to deal with there. So that naturally gravitates up more to a GC NEWC average.
Narrabri, obviously, the source of its out of 6000 type coal has really been fault-related production. And that's not to say from time to time there's not a plug or something you encounter there that gives rise to a little bit of higher-ash material. But over time, that also gravitates back towards the GC NEWC spec, so 59 to 61 in the case of Narrabri. Narrabri, obviously, doesn't carry the same energy that Maules Creek or Tarawonga or Vickery would. But it'll move back in 203. We'll get into some better ground there, and you'll see that come off. So 203 is not till, as I say, Q3 in 2023.
So do I envision in three years' time a situation where the split would be premium 80%, met coal 20%, and no other or minimal, like tiny other?
No, you will still have well, I think you're still going to have some out-of-spec coal there. So I wouldn't want to put a prediction out here in that regard. But yes, in three years' time, Werris Creek goes away, right? So there's one source of that blend stock that's gone. So you'll be definitely much better there. Narrabri should be back in that range, as I say, hovering around. It's never been the energy-rich source. Its benefit is low ash, generally, not extra energy. So I'll resist the temptation to put any predictions on it.
And your other part of that was, where's the met coal going? You were saying 20%. Our current trajectory in that area is captive to interest in semi-soft. And so I think over the last two or three years have told us enough not to predict too much about the semi-soft future split, given that it's been a couple of years now since we've actually seen a buoyant semi-soft market other than through the turn business that we hold.
And Paul, clarification. Back to the comment on dividends or the question asked about dividends. Would the comments from the chairman at the AGM be the best comments in the public domain about that until we get your actual delivery of the February result?
It's only four weeks away, so there's not long to wait. Obviously, the business is in a much improved financial position, and the outlook looks really good. The stock's cheap. That's about as far as we probably want to go right now. I mean, but we'll have a more comprehensive discussion on this in four weeks' time. I'll just ask you, Peter, to hold your horses until we get to that point.
Got it. And lastly, Kevin, finance. You put out a slide about your financing deck last year, and you talked also about debt capital markets and Asian debt capital markets. Now you've got the luxury of sitting there with a net cash position in a month's time. The revolver runs out, I think it's July 2023. How do you juggle the debt, the debt that you've got there? Is Asian capital markets still an option? Do you roll the revolver? How do you see this debt tranche play out?
You've been reading the Treasury paper, haven't you? So the answer to that.
I'm writing the board paper now.
I look forward to receiving it. The answer, I think, is we roll the revolver. And our expectation over time is the revolver becomes less prominent in the capital stack. Pleasingly, debt capital markets across Asia have improved since that last little wrinkle with the Chinese property companies. And I think we want to put our toe in that water. But there's no mad rush for it, and we'll take our time to do it. As you point out, we're in pretty rude health come the second half. And so I think in time, we will be in that debt capital markets. We will remain and retain relationships with Australian banks. This is a transition, not a truncation, is how I'd describe it. And that's what I see with the Australian banks. They're participating with a view out to 2030 and 2035. So I hope that answers your question.
Yep. Perfect. Thanks, Paul. Thanks, Kevin.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Alex Ren with Credit Suisse. Please go ahead.
Morning, Pete. Yep, because I've got a couple of quick questions from me on growth aspects. Could you give us a bit more color on how you're weighing up the growth options, particularly given where the pricing is these days? I suppose this question comes with two parts. Firstly, what is the priority between brownfield and greenfield expansion? And secondly, are there any discussions with the other partners at Maules to take whatever's there up to 100%? I'll circle back on the second question. Thanks.
Yes. Thanks, Alex. Look, I think at this point in time, as I mentioned earlier, there's a couple of hurdles there just with our growth options. I mean, Winchester South is further back in the queue, so that's going through the necessary parts of the process there, and we'll work through that in an orderly fashion. The state government up there has been pretty reasonable, so don't envisage any delays there. Vickery, as you know, is subject to the same outstanding matter. That is an institution of the appeal against the federal minister for having approved the project. We are moving ahead with all the secondary approval-related matters. In fact, most of those management plan activities have been submitted. We're looking to sign those off relatively quickly.
But we have said previously that we're not looking to put a growth project on the table before the board for at least another 12 months. So our priorities here are to get the balance sheet in shape, return to a more normalized pattern of capital allocation and distributions for shareholders. And then we'll bring a project to the table when that is the right time to do it.
There's further work going on there behind the scenes on Vickery just in the meantime. In terms of Maules Creek, you've mentioned 100%. I'm not sure that 100% is up for grabs. I'm only aware of the Itochu piece, but 15%. And so the question is probably better directed towards Itochu in that sense. We obviously like Maules Creek. I think the asset's got a great future. And so we'll watch that process keenly. We're not aware of any real progress over the last month or two to tell you the truth. But yeah, I'll suggest that that question be directed to Itochu to get some color there.
Great. Very clear. Thank you. And I guess on Vickery, is there a rough timeline of secondary approvals at Vickery? And obviously, the cultural heritage sort of remains under the spotlight and is going through some big changes in WA. So would there be any cultural heritage issues impacting the progress? And I suppose the last question now about longwall move into kind of zone three. So how long would that turnaround time be, roughly?
Yeah. Thanks, Alex. Yeah. Vickery, no cultural heritage issues there that you should be concerned with there. There's no particular nuances, as you say. There's obviously a report coming out in the post-Juukan Gorge period, but there's nothing there that we're concerned about as it relates to Vickery. The idea that there'll be some changes to the cultural heritage preservation framework nationally and also in the state, I think that's fair to say that there will be, but we don't have any particular cultural heritage-sensitive sites in Vickery.
It's previously been mined, and so we're largely clear of those types of issues. The longwall move at Narrabri, that's definitely a bit of a move because we're obviously moving from the northern end of the pit into the shallow southern end of the pit, and so there's a bit of work there, but that will be fine. We've got some gear in Schupliker, as you know, and so we wouldn't be outside of the normal eight-week period. It's at the better end of it, six, but if it takes a little bit longer, let's say it is a significant move, but there should be no real change outside of that period.
Great. Got it. Thank you. That's it from me.
Thank you. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Oh, happy New Year, Paul. Paul, I was wondering if you could just put some numbers around your workforce comments, like the absenteeism you're experiencing, what sort of percentage, and have you seen it trending up or down in the first three weeks of this calendar year? But also turnover. I mean, the market's tight for labor up and down the East Coast, and I think in the past, you've suffered a bit of labor loss because you're not the biggest payer. What's happening with turnover rates across your business as well? So that's on the labor side. And then the other question is just if GC NEWC continues to rally like it is, can you still achieve the premium in the back half given a lot of your floating tons were lost? So if it keeps rallying, can you still get that comment that you've made? T hanks.
Yeah. Let me try and deal with that. I'll try and take that not as a slight. We're not like Barrenjoey and the largest payers in the market, Glyn, but it's good to hear from you. I'll leave that in. I'll refer across to Ian for the labor-related matters, and it might be the best way to deal with that, both on absenteeism from COVID and then also tightness in the market. Because both those points are very important. It's right to raise them. Thank you. As far as the GC NEWC rally, yes, we did lose some of those extra tons, which are uncommitted. But as it rises, I mean, we're still going to get our premiums on whatever month those tons are settled in. As I say, we haven't had a material change to the fixed price profile or percentage of tons in our mix.
We have converted over a few sales where there was the opportunity to do so. But as I made the comment earlier, it wasn't material to the overall sales portfolio in the second half. We will be exposed to the index as it settles in the month in which those deliveries take place. So I'm still looking to have a good second half here. And as I say, on the whole, GC NEWC average at plus for the second half is where our target is. And I feel quite confident we can deliver that with the extra washing that we've got. And you've got off this pretty lightly, so we might refer to you in terms of labor tightness and absenteeism from COVID.
Okay. No problems. Go ahead, Glyn. Look, I guess if you look at the absenteeism associated with COVID, as Paul touched on earlier, I think the sites have done a fantastic job over the last couple of years. And until basically this Christmas upswing associated with Omicron, the impact to the sites associated with COVID was quite minimal, to be frank with you. And I mean, it took a lot of effort. And all of the sort of controls that we put in place, segregation, mask wearing, and the employees taking a responsible stance there, reporting if they didn't feel well, etc., not turning up to work. So I think as an organization, we did really well during that period.
If you look at sort of the numbers that we've seen, and I mean, these are sort of direct-related type of how we measure this into the business, it's just over 100 and probably around 120 so far more recently. But that undersells the size of the impact because a number of people haven't come to work or they've been close contacts, etc., or casual contacts and haven't come in to ensure that nothing spread. I think the other thing too is when you're trying to talk COVID numbers, it's not just a straight numbers exercise. You've got to look at the skills and who it's impacting. For example, it may impact, say, statutory roles, deputies underground.
We did have a short period of time there where we had quite a number of deputies impacted at Narrabri, which then had the flow-on effect of not being able to necessarily run a couple of our development panels during that period of time. And that can sort of flow on to other areas where there's sort of small numbers of people, say, continuous miner operators, shot firers, etc., across the business. Having said that, I guess the business, we've also been looking to prioritize the work areas. And I think Paul touched on, I mean, the longwall had the priority of people over that Christmas period when we were down on some numbers. So trying to predict sort of how many on an average basis is quite difficult because it comes up and down and can also sort of be dependent.
And we've seen this on maybe a sort of a community event and in and around Christmas. And our employees being largely local may have attended those. And we've had some peak spots where we've had to manage through associated with that. So does that give you enough color on the COVID side of things?
Yeah. That's great. But I mean, what would 120 represent as a percent? And is it trending back down now, the percent, or it's in the last three weeks?
If you try to ask for a percentage, I would say that sort of we've got a fleet away at a time sort of thing is probably, but it can vary to multiple fleets for, say, a day or two, as I've indicated, to back to sort of a fleet of people. So that's sort of the variation we're seeing over the last few weeks. But having said that, if I look at Narrabri now, which had a pretty tight time over Christmas, it's getting very close back to normal now.
Okay. Great. And then just the turnover?
So on the people one, like all of the mining industry, we're dealing with the labor and skill shortage. We're working on a number of initiatives to improve that position, both not only for our own employees but contract employees. So we're obviously working with the various labor hire providers we've got. And I mean, you touched on, so obviously some of that work is ensuring that we've got market-competitive remuneration. We're looking at working arrangements, maybe some additional benefits. We're doing a lot of work in looking at some geographical areas that may have been untapped previously to see whether or not there's a labor pull there.
As Paul touched on, the border restrictions. Hopefully we'll see that relaxing in Queensland, and we'll be able to tap into some more people there. And I guess the other one we'll also always consider our ratio of contractors to Whitehaven employees. So there's no one silver bullet to this exercise, and everyone's in the same boat, but we've got a sort of high-level focus on ensuring that we can get that turnover rates and absenteeism levels down.
But is the turnover rate above average at the moment or in line with average? Just so curious to know where it sits against sort of history.
I don't think it's any higher than historical. We are short some numbers across the sites, and that's what we're looking to fill those holes with those initiatives that I've indicated previously.
That's great. Thanks very much for the color.
Thank you. Your next question comes from Tim Zhao with Lazard Asset Management. Please go ahead.
Oh, hey, guys. Thanks for the update. I just got a quick question on Maules Creek. Obviously, with all the floods and the COVID, the second half has been producing under the sort of licensed volumes. Does the gap get credit into the following years or not, probably the subsequent following half, but in the later in the years?
Tim, Paul here. No, you don't get to carry that forward. First of January, new year, you've got 30 million tons to work with. That's it. So whatever you didn't get in this quarter, the December quarter just gone, that weather-related 600,000 tons that we missed, that has to, well, the coal's still there, obviously, to be exploited in future periods. But the 13 million ton reset occurs on a hard date on the 1st of January.
Okay. Cool. Thanks, guys.
Thank you. That's all for the time we have for our question-and-answer session. I'll now hand back to Paul Flynn for closing remarks.
Yep. Thanks, operator . Thanks, everybody, for taking the time. I look forward to catching up. I'm sure there'll be some questions that come out of this. We're only four weeks away from the half-year results, so that'll obviously complete the picture in terms of what has happened in the six-month period to 31st of December. But again, if you've got any questions, you know where to find us, and look forward to catching up with you between then and then potentially at the half-year. Thanks, all. Thank you, operator. I'll hand back to you.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.