WICET creates opportunity for Glencore's Wandoan Report

Insight 15 September 2016

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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 the following images and tables:

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