Insight

WICET creates opportunity for Glencore's Wandoan

15 September 2016

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15 September 2016

WICET creates opportunity for Glencore's Wandoan

Report summary

We have assessed projects at the Wiggins Island Coal Export Terminal (WICET) in Queensland, given the potential opportunity to secure spare port capacity at a large discount to the existing terminal handling charge.

Executive Summary
- WICET Overview
  - Mines and projects forecast to supply coal to WICET Stage 1
- High port charges are crimping shippers' margins
- WICET capacity likely to be significantly under-utilised until 2023
- What will it take to fill up capacity at WICET?
- A strategic early start at Wandoan could result in an incentive price as low as US$63/tonne for Wandoan
- Development and marketing risks for Wandoan
- With potential M&A on the table, is an early start Glencore's best option?

Tables and charts

This report includes 7 images and tables including:

WICET Stage 1 capacity entitlement (before and after administration of Bandanna Energy and Cockatoo Coal)
WICET operating mines 2016 operating margin vs. remaining present value (1/1/17, NPV 10%)
WICET stage 1 capacity and mine throughput: base case

Incentive price comparison for WICET stage 1 projects and Wandoan
WICET capacity and mine throughput: scenario of an early start at Wandoan
Incentive price comparison for an early start scenario for Wandoan and leading Galilee projects
WICET creates opportunity for Glencore's Wandoan: Image 1