UNITED STATES
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FORM
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(Mark One)
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DOCUMENTS INCORPORATED BY REFERENCE
Portions
of
the
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statement
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be
filed
with
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and
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connection
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this Annual Report on
Form
10-K. Documents incorporated by reference in this report are listed in the Exhibit Index of this
Annual Report on Form 10-K.
Steel starts
here.
Annual Report on Form 10-K for the year ended December
31, 2024.
TABLE OF CONTENTS
Page
Number
PART I
8
38
66
66
68
90
91
PART II
92
93
94
112
115
156
157
159
159
PART III
160
160
160
160
160
PART IV
161
165
166
Coronado Global Resources Inc. Form 10-K December 31,
2024
5
EXPLANATORY
NOTE
Unless
otherwise
noted,
references
in
this
Annual
Report
on
Form 10-K
to
“we,”
“us,”
“our,”
“Company,”
or
“Coronado” refer
to Coronado
Global Resources
Inc. and
its consolidated
subsidiaries and
associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Annual Report on Form 10-K are expressed in metric tons, or
Mt,
millions
of
metric
tons,
or
MMt,
or
millions
of
metric
tons
per
annum,
or
MMtpa,
except
where
otherwise
stated. One Mt (1,000 kilograms)
is equal to 2,204.62 pounds
and is equivalent to 1.10231 short
tons. A net ton
is equivalent
to a
short ton,
or 2,000
pounds. In
addition, all
dollar amounts
contained herein
are expressed
in
United States
dollars, or
US$, except
where otherwise
stated. References
to “A$”
are references
to Australian
dollars, the
lawful currency
of the
Commonwealth of
Australia, or
the Commonwealth.
Some numerical
figures
included in this Annual Report on Form 10-K have been
subject to rounding adjustments. Accordingly, numerical
figures shown as totals in certain tables may not equal
the sum of the figures that precede them.
CAUTIONARY NOTICE REGARDING FORWARD
-LOOKING STATEMENTS
This Annual
Report on
Form 10-K
contains “forward-looking
statements” within
the meaning
of Section
27A of
the Securities Act
of 1933, as
amended, or the
Securities Act, and
Section 21E of
the Securities Exchange
Act
of
1934,
as
amended,
or
the
Exchange
Act,
concerning
our
business,
operations,
financial
performance
and
condition, the coal, steel and other industries, as well as our plans,
objectives and expectations for our business,
operations, financial performance and condition. Forward-looking statements may
be identified by words such
as
“may,”
“could,”
“believes,”
“estimates,”
“expects,”
“intends,”
“plans,”
“anticipate,”
“forecast,”
“outlook,”
“target,”
“likely,” “considers”
and other similar words.
Any
forward-looking
statements
involve
known
and
unknown
risks,
uncertainties,
assumptions
and
other
important factors that
could cause actual
results, performance,
events or outcomes
to differ
materially from
the
results,
performance,
events
or
outcomes
expressed
or
anticipated
in
these
statements,
many
of
which
are
beyond
our
control.
Such
forward-looking
statements
are
based
on
an
assessment
of
present
economic
and
operating
conditions
on
a
number
of
best
estimate
assumptions
regarding
future
events
and
actions.
These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans or an investment in our securities include,
but are not limited to:
•
the prices we receive for our coal;
•
uncertainty in global economic
conditions, including the
extent, duration and
impact of ongoing
civil
unrest and
wars, as
well as
risks related
to government
actions with
respect to
trade agreements,
treaties or policies;
•
risks
unique
to
international
mining
and
trading
operations,
including
tariffs
and
other
barriers
to
trade;
•
a
decrease
in
the
availability
or
increase
in
costs
of
labor,
key
supplies,
capital
equipment
or
commodities, such
as diesel
fuel, steel,
explosives and
tires, as
the result
of inflationary
pressures
or otherwise;
•
the extensive forms
of taxation that
our mining operations
are subject to,
and future tax
regulations
and developments;
•
concerns
about
the
environmental
impacts
of
coal
combustion
and
greenhouse
gas,
or
GHG
emissions, relating
to mining
activities,
including
possible
impacts on
global
climate issues,
which
could result in increased regulation of coal
combustion and requirements to reduce
GHG emissions
in many
jurisdictions,
including
federal and
state government
initiatives
to control
GHG
emissions
could increase costs associated
with coal production and consumption,
such as costs for
additional
controls
to
reduce
carbon
dioxide
emissions
or
costs
to
purchase
emissions
reduction
credits
to
comply
with
future
emissions
trading
programs,
which
could
significantly
impact
our
financial
condition
and
results
of
operations,
affect
demand for
our products
or our
securities
and
reduced
access to capital and insurance;
•
severe financial hardship,
bankruptcy, temporary or permanent shut
downs or operational
challenges
of
one
or
more
of
our
major
customers,
including
customers
in
the
steel
industry,
key
suppliers/contractors,
which
among
other
adverse
effects,
could
lead
to
reduced
demand
for
our
coal,
increased
difficulty
collecting
receivables
and
customers
and/or
suppliers
asserting
force
majeure or other reasons for not performing their contractual
obligations to us;
Coronado Global Resources Inc. Form 10-K December 31,
2024
6
•
our ability to generate sufficient cash to service
our indebtedness and other obligations;
•
our
indebtedness
and
ability
to
comply
with
the
covenants
and
other
undertakings
under
the
agreements governing such indebtedness;
•
our ability to
collect payments
from our customers
depending on
their creditworthiness,
contractual
performance or otherwise;
•
the demand for steel products, which impacts the demand for
our metallurgical, or Met, coals;
•
risks
inherent
to
mining
operations
could
impact
the
amount
of
coal
produced,
cause
delay
or
suspend coal deliveries, or increase the cost of operating
our business;
•
the loss of, or significant reduction in, purchases by our
largest customers;
•
unfavorable economic and financial market conditions;
•
our ability to continue acquiring and developing coal reserves
that are economically recoverable;
•
uncertainties in estimating our economically recoverable
coal reserves;
•
transportation for our coal becoming unavailable or uneconomic
for our customers;
•
the risk that we may be required to pay for unused capacity pursuant to the terms of our take-or-pay
arrangements with rail and port operators;
•
our ability to retain key personnel and attract qualified
personnel;
•
any failure to maintain satisfactory labor relations;
•
our ability to obtain, renew or maintain permits and consents
necessary for our operations;
•
potential costs or
liability under applicable environmental
laws and regulations,
including with respect
to any exposure
to hazardous substances
caused by
our operations, as
well as
any environmental
contamination our properties may have or our operations
may cause;
•
extensive regulation of our mining operations and future
regulations and developments;
•
our ability to provide
appropriate financial assurances
for our obligations under
applicable laws and
regulations;
•
assumptions underlying our asset retirement obligations
for reclamation and mine closures;
•
any cyber-attacks or
other security breaches that
disrupt our operations
or result in
the dissemination
of proprietary or confidential information about us, our
customers or other third parties;
•
the risk that we may not
recover our investments in
our mining, exploration and other
assets, which
may require us to recognize impairment charges related
to those assets;
•
risks related to divestitures and acquisitions;
•
the risk that diversity in
interpretation and application of
accounting principles in the
mining industry
may impact our reported financial results; and
•
other risks and uncertainties described in Item 1A. “Risk
Factors.”
We
make
many
of
our
forward-looking
statements
based
on
our
operating
budgets
and
forecasts,
which
are
based upon
detailed assumptions.
While we
believe that
our assumptions
are reasonable,
we caution
that it
is
very difficult to
predict the impact
of known factors,
and it is
impossible for us
to anticipate all
factors that could
affect our actual results.
See Item 1A. “Risk Factors” and
elsewhere in this Annual Report
on Form 10-K for a more
complete discussion
of the risks
and uncertainties
mentioned above
and for
discussion of other
risks and uncertainties
we face that
could
cause
actual
results
to
differ
materially
from
those
expressed
or
implied
by
these
forward-looking
statements.
Coronado Global Resources Inc. Form 10-K December 31,
2024
7
All
forward-looking
statements
attributable
to
us
are
expressly
qualified
in
their
entirety
by
these
cautionary
statements, as well as others made in this Annual
Report on Form 10-K and hereafter in our other
filings with the
Securities
and
Exchange
Commission,
or
SEC,
and
public
communications.
You
should
evaluate
all
forward-looking statements made by us in the context
of these risks and uncertainties.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to
you. The forward-looking statements
included in this Annual Report
on Form 10-K are made
only as of the date
hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new
information, future events, or otherwise, except as required
by applicable law.
Forward-looking and
other statements
in this
Annual Report
on Form
10-K regarding
our GHG
reduction plans
and
goals
are
not
an
indication
that
these
statements
are
necessarily
material
to
investors
or
required
to
be
disclosed in our filings with the SEC. In addition, historical, current and
forward-looking GHG-related statements
may be based on standards for measuring
progress that are still developing, internal controls and
processes that
continue to evolve and assumptions that are subject to
change in the future.
Coronado Global Resources Inc. Form 10-K December 31,
2024
8
PART I
ITEM 1.
BUSINESS.
Overview
We are a leading producer,
global marketer and exporter
of high-quality Met coals,
with a diversified portfolio
of
three high-quality,
long-life Met coal assets
located in Australia
and the United States,
or U.S. Our coals
are an
essential ingredient
in the production
of steel using
blast furnaces,
or BF,
used in the
manufacture of everyday
steel-based
products.
This
steel
supplies
large
segments
of
the
global
economy,
such
as
the
automotive,
construction, and infrastructure sectors.
Our mining
operations and
development projects
are located
in Queensland
in Australia,
and in
Virginia, West
Virginia
and
Pennsylvania
in
the
U.S.
Our
operations
in
the
U.S.,
or
U.S.
Operations,
and
our
operations
in
Australia, or Australian Operations
,
are strategically located for
access to transportation
infrastructure, enabling
us to serve a diversified customer base spanning five
continents.
Our Australian
Operations
consist of
a 100%-owned
Curragh producing
mining property
located in
the Bowen
Basin of Queensland, Australia. The
Curragh complex is comprised
of two open cut mines, Curragh
North Mine
and Curragh
South Mine
and one
underground mine,
Mammoth Underground.
With approximately
22 years
of
reserve
life,
the
Curragh
complex
is
a
key
supplier
to
steelmakers
in
Asia,
Europe
and
South
America,
contributing 9.7 MMt of saleable production for the year
ended December 31, 2024.
Our U.S.
Operations consist
of two
producing
mining properties
(Buchanan
and Logan)
and two
development
mining properties
(Mon Valley,
and Russell
County), primarily
located in
the Central
Appalachian region
of the
U.S.,
or
CAPP,
all
of
which
are
100%-owned.
Buchanan
and
Logan,
with
approximately
24
and
30
years
of
reserve life, respectively,
contributed a total of 5.7 MMt of
saleable production for the year ended December
31,
2024. On January 14, 2025, the Company successfully completed the sale of its idled Greenbrier property which
formed part of the U.S. Operations.
In addition to Met
coal, our Australian
Operations sell thermal
coal,
under a long-term
legacy contract assumed
in the
acquisition
of
Curragh,
to
Stanwell
Corporation
Limited,
or
Stanwell,
a Queensland
government-owned
entity and the
operator of the
Stanwell Power Station
located near Rockhampton, Queensland,
and some thermal
coal in the export
market. Our U.S.
Operations also produce
and sell some
thermal coal that
is extracted in
the
process of mining Met coal.
Location of Australian Operations
Location of U.S. Operations
We
have
a
geographically
diverse
customer
base
across
a range
of
global
markets.
Major
consumers
of
our
seaborne Met coal in 2024 were located in high-growth
Asian markets, Brazil and Europe.
History and Australian Public Offering
We were founded in 2011
by our then Chief Executive Officer
and current Executive Chair,
Mr. Garold Spindler,
our then President and Chief Operating Officer, Mr. James Campbell and a private equity fund affiliated with The
Energy & Minerals
Group, or
EMG, with
the intention
of evaluating,
acquiring and
developing
Met coal
mining
properties.
Coronado Global Resources Inc. Form 10-K December 31,
2024
9
Prior to our initial public offering,
Coronado Global Resources Inc.,
was a wholly-owned subsidiary
of Coronado
Group LLC. On October 23, 2018, we completed an initial public offering on the Australian Securities
Exchange,
or ASX, which we refer to as the Australian IPO.
Coronado Group LLC is currently owned by funds managed by EMG, which we refer to,
collectively, as the EMG
Group, and certain members of our management.
As
of
December
31,
2024,
the
EMG
Group
and
management
beneficially
owned
50.4%
of
the
issued
and
outstanding shares of our common
stock through their ownership of Coronado Group LLC.
The remaining 49.6%
was owned by public investors in the form of CDIs traded on
the ASX.
Organizational Structure
The following chart shows our current organizational structure:
* Coronado Global Resources Inc. holds 100%
ownership interest in its subsidiaries, unless otherwise
stated.
Segments
In accordance with
Accounting Standards Codification, or
ASC, Topic 280,
Segment Reporting
, we have
adopted
the following reporting segments:
•
Australia; and
•
U.S.
In
addition,
while
“Other
and
Corporate”
is
not
determined
to
be
a
reporting
segment
it
is
disclosed
for
the
purposes of reconciliation to our Consolidated Financial Statements.
These segments are grouped based on geography and reflect how we currently monitor
and report the results of
the
business
to
the
Chief
Executive
Officer,
who
is
our
chief
operating
decision
maker,
or
CODM.
Factors
affecting and differentiating the financial
performance of each of
these two reportable segments
generally include
Coronado Global Resources Inc. Form 10-K December 31,
2024
10
coal quality, geology, coal marketing opportunities, mining and
transportation methods and regulatory
issues. We
believe
this
method
of
segment
reporting
reflects
the
way
our
business
segments
are
currently
managed,
resources are allocated and
the way the performance
of each segment is evaluated.
The two segments consist
of similar operating activities as each segment produces similar
products.
Industry Overview
Types and properties of Met Coal
Met coal is primarily
used in the manufacture of
coke, which is used
in the steel-making process, as
well as direct
injection
into
a
BF
as
a
replacement
for
coke.
Met
coals
are
differentiated
by
variations
in
the
physical
and
chemical properties that govern applicable use, and while all Met coals
are used primarily in steelmaking, not all
Met
coals
have
equal
ability
to
be
carbonized
into
coke.
Coke
carbonization
is
a
process
of
heating
to
high
temperatures in
the absence
of oxygen,
certain coals
(i.e. Met
coals with
caking properties)
soften and
form a
plastic mass
that swells
and re-solidifies
into a
hard but
porous solid,
or coke.
Coke is
used primarily
as a
fuel
and a reducing agent in a BF during the reduction of iron ore
into iron, before it is converted into steel.
Met
coal
types
include
hard
coking
coal,
or
HCC,
semi-hard
coking
coal,
or
SHCC,
semi-soft
coking
coal,
or
SSCC, and pulverized coal injection,
or PCI. All of
these types of Met
coal are used in
steel production processes
and are typically sub-categorized by their volatile content as low volatile
content, or Low-Vol,
mid volatile content
or high volatile content, or High-Vol
.
Importance of Met Coal in the Global Economy
Met
coal
is
traded
globally.
Global
seaborne
markets
are
sub-divided
into
the
Atlantic
and
Pacific
basins,
referencing
the
primary
location
of
coal
production
and
location
of
the
end
customer.
Major
consumers
of
seaborne Met coal include China, India, Japan and Europe.
Met
coal
is
used
primarily
in
the
manufacturing
process
for
steel.
Steel
is
used
in
a
variety
of
applications
in
everyday life
from building
and infrastructure
construction to
wind turbine
blades to
cars. As
steel has
been an
essential part of
the expanding
global economy,
demand for
Met coal has
historically been
closely tied
to steel
production in the world’s growing economies, including
China and India.
Description of the Steelmaking Process
Met
coal
is
a
key
ingredient
in
the
production
of
steel
using
BFs,
and
approximately
0.78
ton
of
Met
coal
is
required to produce
one ton of
steel. An alternative
steelmaking process
utilizing electric arc
furnaces does not
use
coal
as
a
manufacturing
input
and
accounted
for
28.6%
of
steel
production
in
2023.
Steel
markets
are
distributed as follows:
Source: World Steel Association — World Steel in Figures, 2024.
Steel that
is recyclable
can be
re-used infinitely.
According to
the Word
Steel Association,
new steel
products,
on average, contain 30% recycled steel. The
steel industry uses its resources efficiently
and produces very little
waste.
Coronado Global Resources Inc. Form 10-K December 31,
2024
11
The table below shows
steel recovery by sector. Ninety percent of
steel in each of the
Machinery and Automotive
sectors is recovered.
Source: World Steel Association —Steel Facts.
Global Coal Markets
Markets
for
Met
and
thermal
coal
operate
relatively
independently
of
each
other.
However,
a
degree
of
substitution can occur
between specific thermal
coals and lower
ranked Met coals,
as lower ranked
Met coal is
less suitable for creating coke but
still contains thermal heating properties. When the supply of
higher quality Met
coals is constrained, or
prices are extremely high,
these ‘crossover’ coals
can be sold
for higher value in
Met coal
markets but may retreat to thermal coal markets in times
of ample Met coal supply.
In
most
countries
in
which
Met
and
thermal
coals
are
produced,
domestic
markets
have
emerged
to
take
advantage of
proximate sources
of fuel
for power
generation or
feedstock for
coke making
and industrial
use.
Similarly,
transportation
linkages
have
been
developed
to
access
export
markets,
either
land
borne
across
country borders (such as between the U.S. and Canada) or seaborne. While substantially larger volumes of coal
produced on an annual basis are consumed in the country of origin, export markets — and particularly seaborne
markets — tend to exhibit
greater price and volume
transparency than domestic
markets. As a result, seaborne
market prices are the most common reference point in
the international Met coal market.
Typically,
global seaborne
markets are sub-divided
into the Atlantic
and Pacific basins,
referencing the
primary
location of coal production and location of the end-customer.
Major
consumers
of
seaborne
Met
coal
included
Japan,
China,
India
and
Europe.
Met
coal,
and
in
particular
HCC, is a
relatively scarce product,
as large-scale mineable
deposits are limited
to specific geographic
regions
located in the eastern U.S., western Canada, eastern Australia,
Russia, China, Mozambique and Mongolia.
Market Demand and Trends
Met Coal
Most of the
Met coal that
we produce is
sold, directly or indirectly, to steel
producers. The steel industry’s demand
for Met
coal is
affected by
several factors,
including the
cyclical nature
of that
industry’s business,
geopolitical
stability,
general
economic
conditions
affecting
demand
for
steel,
tariffs
on
coal,
steel
and
steel
products,
technological developments in the steelmaking process and the availability and
cost of substitutes for steel, such
as aluminum,
composites and
plastics. Seaborne
Met coal
import demand,
which is
most of
our business,
can
be
significantly
impacted
by
the
availability
of
indigenous
coal
production,
particularly
in
the
leading
Met
coal
import
countries
of
China
and
India,
among
others;
and
the
competitiveness
of
seaborne
Met
coal
supply,
including from
the
leading
Met coal
exporting
countries
of
Australia,
the
U.S.,
Russia,
Canada
and
Mongolia,
among others.
Thermal Coal
The thermal coal
we produce is
predominantly a byproduct
of mining Met
coal. The thermal
coal we produce
is
sold, directly
or indirectly,
to power
stations, predominantly
Stanwell, as
an energy
source in
the generation
of
electricity. Demand for our thermal coal is impacted by economic conditions, environmental regulations, demand
for
electricity,
including
the
impact
of
energy
efficient
products,
and
the
cost
of
electricity
generation
from
alternative
fuels.
Our
thermal
coal
primarily
competes
with
producers
of
other
forms
of
electric
generation,
including natural gas, oil, nuclear,
hydro, wind, solar and biomass, that provide an alternative to
coal use.
Coronado Global Resources Inc. Form 10-K December 31,
2024
12
94%
6%
FY24 Coal revenue mix -Australian
Operations
Met
Thermal
Overview of Operations
Australian Operations—Curragh
Curragh is located in
Queensland’s Bowen Basin, one of the
world’s premier Met coal regions. Curragh
has been
operating since
1983, and
produces a
variety of
high-quality,
low-ash Met
coal products.
We believe
our HCC
product
is
recognized
by
steelmakers
for
its
low-ash
content,
consistency
of
quality
and
favorable
coking
attributes. We believe that our semi-coking coals, or SCC,
products are similarly valued, in particular for their
low
wall
pressure,
which
makes
them
suitable
for
stamp
charging
coke
ovens,
and
our
PCI
coal
at
Curragh
is
recognized
by
steelmakers
for
its
low
phosphorus
and
sulfur
content.
These
Met
coal
products
are
exported
globally
to
a
diverse
customer
base
located
primarily
in
Asia.
Curragh
also
produces
thermal
coal,
which
is
primarily sold domestically
under a long-term contract
with Stanwell, with a
limited amount of such
thermal coal
being exported.
Revenues from our Australian Operations represented
63.6% of our total revenue for the year ended December
31, 2024. See Item 2. “Properties” for more information regarding
Curragh.
Coal revenues split by Met and thermal for our Australian Operations
are as follows:
For the year ended December 31, 2024, 70.9% of the total
volume of coal sold by our Australian Operations was
Met coal and 29.1% of the
total volume of coal sold
by our Australian Operations
was thermal coal, the majority
of which
was sold
to Stanwell.
For the
year ended
December 31,
2024, Curragh
sold 7.2
MMt of
Met coal
into
the seaborne coal markets. The
majority of customers purchase multiple
grades of products and have
purchased
Curragh coal continuously through all stages of the coal/commodity
pricing cycle. Curragh’s Met coal is typically
sold
on
annual
contracts
negotiated
by
our
global
marketing
team,
with
pricing
agreed
to
bilaterally
or
with
reference
to
benchmark
indices
or
spot
indices.
Our
Australian
Operations
have
maintained
a
high
level
of
contract coverage against planned production. In 2024, substantially all of Curragh’s
Met coal export sales were
made under term contracts.
U.S. Operations—Buchanan and Logan
Our producing
mining
properties
in the
U.S.
are
located in
the CAPP
region, specifically
in
Virginia
and
West
Virginia, which is
a highly-developed and
active coal-producing region. Met
coal produced by
our U.S. Operations
is
consumed
regionally
by
North
American
steel
producers
or
exported
by
seaborne
transportation
to
steel
producers (primarily in
Asia, Europe and
South America). The U.S.
Operations also produce
small quantities of
thermal coal that
is extracted in
the process of
mining Met coal,
which is sold
to global export
markets. We believe
that many steelmakers
regard Met coal from
the CAPP region (where
our U.S. Operations
are located) to
be of
the highest
quality in
the
world
owing to
its generally
low-ash
and
sulfur content.
Our U.S.
Operations
offer
a
range of
Met coal
products, with
significant production
of HCC,
comprising coal
with High-Vol
,
(including High-
Vol A, or HVA
,
High-Vol B, or HVB, and High-Vol
A-B, or HVA
-B) and coal with Low-Vol.
Sales from our U.S. Operations to export
markets are typically priced with reference
to a coal benchmark index.
In circumstances where we
sell our seaborne
coal through intermediaries Free
on Rail (Incoterms
2010), or FOR,
our realized price on FOR sales does not
include transportation to the seaborne port
or costs to transload into a
Coronado Global Resources Inc. Form 10-K December 31,
2024
13
97%
3%
FY24 Coal revenue mix -U.S.
Operations
Met
Thermal
vessel. Consistent
with seaborne sales,
sales to North
American customers
are generally sold
on a FOR
basis
where the customer arranges for and incurs the cost of
transportation to their facility.
A portion of our sales is
sold to North American steel and coke producers on annual contracts at
fixed prices that
do
not
fluctuate
with
the
benchmark
index.
The
fixed-price
nature
of
these
annual
contracts
provides
us
with
visibility on our
future revenues,
as compared to
spot sales or
sales priced
with reference
to a coal
benchmark
index. For 2025, we
have entered into
annual fixed price
contracts to sell
approximately 2.3
MMt of Met coal
to
North American steel and coke producers. During
periods of stable and rising prices, we
strive to take advantage
of the spot market. Spot export contracts are negotiated
throughout the year.
Revenues from our U.S.
Operations, in the aggregate, represented
36.4% of our total
revenue for the year
ended
December 31, 2024. Coal revenues split by Met and thermal
for our U.S. Operations are as follows:
For the year ended December 31,
2024,
94.6% of the total volume of
coal sold by our U.S. Operations
was Met
coal and
5.4% was
thermal coal.
We sold
64.2% of
total Met
coal from
our U.S.
Operations into
the seaborne
Met coal markets for the year ended December 31, 2024.
See Item 2.
“Properties” for
more information
regarding Buchanan,
Logan and
the other
mining properties
that
comprise our U.S. Operations.
Competitive Strengths
Large scale and long-life operating assets with substantial
resource base
We own and
operate a portfolio
of long-life
assets across
Australia and the
U.S., with an
average implied
mine
life for our
producing mines
of approximately 23
years based on
December 31, 2024,
marketable reserves
and
2024 total saleable production.
Importantly,
we have 100%
ownership over all of
our operating mines,
allowing us full control
over all operating
decisions. This control adds
value throughout the cycle
and allows us to
react swiftly and decisively
to changes
in global market demands.
Coronado Global Resources Inc. Form 10-K December 31,
2024
14
We had reserves of
521 MMt and
a substantial resource base
of 499 MMt
(exclusive of reserves) as
of December
31, 2024.
(1)
(1)
reserves. Australian resources
are reported
on a 5.3%
in-situ moisture
basis. U.S. Operations
resources are reported
on a dry
basis. Reserve
life
is
calculated as
marketable reserves
divided by
2024
total saleable
production
for
Coronado’s operating
assets
for
the year
ended
December 31, 2024. Refer to Item 2. “Properties.”
Diversified by geography, producing
mines, product and customer base
We
benefit
from
a
geographically
diverse
asset
base
in
Australia
and
the
U.S.,
with
access
to
multiple
transportation infrastructure
options, including
key rail
and port
infrastructure necessary
for both
the seaborne
export and domestic markets.
We have access to the
key major markets in both
the Atlantic and Pacific basins,
and our wide footprint provides flexibility to respond quickly
to changes in global market demands.
Our
Met
coal
production
is
diversified
across
high-quality
products.
Our
Australian
Operations
produce
HCC,
SCC, and PCI coal.
We have a dedicated global
marketing team that generates direct
sales for our coal. We
sell most of our coal to
end users, either directly or through intermediaries, such
as brokers.
Our customer
base spans
across a
full spectrum
of key
global markets.
We sell
directly to
a number
of large,
high-quality and well-known
companies in the
steel industry. Many of our
core customers have
been longstanding
customers and
source our
products as
essential base
feed, which
translates into
a long
history of
contract renewal
for such customers.
We are a
key supplier to
tier one steel
mills in Japan,
South Korea, Taiwan,
India, Europe,
Brazil, North America and China. The majority
of our sales are made under
contracts with terms of typically
one
year or on a spot basis.
Given
the
quality
of
our
diverse
customer
base,
we
believe
the
demand
for
our
products
is
fundamentally
insulated across
all stages
of the
commodity
cycle. This
flexibility provides
us the
ability to
take advantage
of
favorable market pricing as and where it arises.
We believe our geographic diversity provides a competitive advantage by allowing
us to sell multiple products to
our
customers
in
multiple
countries.
This
allows
the
sales
team
to
leverage
its
relationships
to
provide
value
added solutions, including blends with third parties.
Coronado Global Resources Inc. Form 10-K December 31,
2024
15
70%
30%
FY2024
Export
Domestic
72%
28%
FY2023
Export
Domestic
66%
34%
FY2022
Export
Domestic
2024 Coronado’s key coal trade flows
The below charts show our export and domestic
sales split by volume as of December 31, 2024,
2023 and 2022:
Sales volume by export and domestic coal sales
Coronado Global Resources Inc. Form 10-K December 31,
2024
16
51%
9%
41%
Australia
HCC
SCC
PCI
66%
34%
U.S.
Low Vol
High Vol
The below charts
show Met product
ranges by volume
sold for our
Australian Operations and
our U.S. Operations
for the year ended December 31, 2024.
Sales of Met coal represented 95.2%
of our total coal revenues for the
year ended December 31, 2024. Most
of
the Met coal that we produce is sold, directly or indirectly,
to steel producers.
Sales of thermal coal represented 4.8% of our total coal revenues
for the year ended December 31, 2024.
Expiration of Stanwell contract from early 2027 is
expected to increase cash flow generation
Coronado Curragh Pty Ltd,
or CCPL, a
subsidiary of Coronado, is
party to the Amended
Coal Supply Agreement,
or
ACSA
with
Stanwell,
which
was
entered
into
in
consideration
for
mining
rights
at
Curragh
North
that
we
inherited upon our
acquisition of
the complex in
2018. Under
the ACSA, CCPL
is required
to deliver approximately
3 MMtpa,
of thermal
coal to
Stanwell at
an agreed
price and
quantity.
The agreed
price is
meaningfully
lower
than the price that could be achieved for the same coal if it would be sold on the seaborne market. Furthermore,
Stanwell receives
a tonnage
rebate, consisting
of 25%
of export
revenues above
an agreed
floor price
on the
first 7 MMtpa we export, and 10%
of the revenues above a separate
floor price for exports above 7 MMtpa.
The
total Stanwell rebate for the year ended December 31,
2024, was $116.9
million.
Under the ACSA, Stanwell may vary the quantity of thermal coal
purchased each year, so the total quantity to be
delivered to Stanwell each year cannot
be precisely predicted. Based on the contractually agreed amounts
in the
ACSA and pattern
of prior deliveries,
management estimates that 3
MMtpa is the
approximate delivery obligation.
The
ACSA
is
expected
to
expire
in
early
2027;
and
upon
expiration
of
the
ACSA,
the
New
Coal
Supply
Agreement, or NSCA,
will govern the
supply of thermal
coal to Stanwell
reducing the delivery
requirement from
approximately 3 MMtpa
to approximately 2
MMtpa, which we
expect will allow
additional volumes to
be processed
and sold in the export market.
In addition,
the NSCA
does not
include any
obligations to
pay Stanwell
a tonnage
rebate on
volumes sold
into
the export market. For more details, refer to “Information Regarding
Major Customers” below.
Optimization of
our existing
assets and
continued investment
in accretive
organic growth
projects are
our key strategic focus areas
We
continue
to
invest
in
our
organic
growth
projects
at
both
Buchanan
and
Curragh.
In
December
2024,
we
commenced
operations
at
the
Mammoth
Underground
Mine.
The
project
involves
a
bord
and
pillar
mining
approach that leverages
Curragh’s existing infrastructure, resulting
in relatively limited
capital expenditures. Once
fully
operational,
the
project
is
designed
to
deliver
up
to
2.0
MMtpa
of
additional
saleable
production.
The
Mammoth Underground
Mine is
targeting coal
volumes
that can
be accessed
at a
relatively low
cost, which
is
expected to deliver cost reductions for the entire Curragh
operation on a per Mt basis.
We
continue
to
invest
in
a
capital
project
at
the
Buchanan
mine
to
de-bottleneck
operations
and
improve
productivity.
This includes
construction of
a new
surface raw
coal storage
area to
increase the
mine’s
storage
capacity.
The project
is designed
to alleviate
bottlenecks and
allow the
mine to
operate at
a higher
production
capacity. In
2024, excavation and construction
works continued with the completion
of access roads and bridge
extensions, in addition
to a stockpile
area coal reclaim
tunnel, electrical works
and installations. Buchanan
also
progressed the construction of a second set of
skips, which are intended to increase the mine’s hoisting capacity
to the surface and allow the mine to operate at a higher capacity and are set
for commissioning in the first half of
2025.
Coronado Global Resources Inc. Form 10-K December 31,
2024
17
Competition
We operate
in a competitive
environment. We
compete with domestic
and international coal
producers, traders
and brokers.
We compete
based on
coal quality
and characteristics,
price, customer
service and
support and
reliability of supply.
Demand for Met coal and the prices
that we will be able to obtain for our
Met coal are highly
competitive and are
determined predominantly by world
markets, which are
affected by numerous factors
beyond
our control, including but not limited to:
•
general global, regional and local economic activity;
•
changes in demand for steel and energy;
•
tariffs imposed by countries, including the U.S. and Australia, on the import of certain steel products and
any retaliatory tariffs by other countries;
•
industrial production levels;
•
short-term constraints, including adverse weather conditions;
•
changes in the supply of seaborne coal;
•
technological changes;
•
changes in international freight or other transportation infrastructure
rates and costs;
•
the costs of other commodities and substitutes for coal;
•
market changes in coal quality requirements;
•
government regulations which restrict, or increase the
cost of, using coal; and
•
tax impositions on the resources industry,
all of which are outside of our control;
In addition, coal prices are highly
dependent on the outlook for coal consumption in
large Asian economies, such
as China, Japan, South Korea and India,
as well as any changes in government
policy regarding coal or energy
in those countries.
In developing our
business plan and
operating budget, we
make certain assumptions
regarding future Met
coal
prices, coal demand and
coal supply. The prices we receive for
our Met coal depend
on numerous market factors
beyond our control. Accordingly,
some underlying coal price assumptions relied on by us may materially change
and
actual
coal
prices
and
demand
may
differ
materially
from
those
expected.
Our
business,
operating
and
financial
performance,
including
cash
flows
and
asset
values,
may
be
materially
and
adversely
affected
by
short-term or long-term volatility in the prevailing prices
of our products.
Competition in
the coal
industry is based
on many
factors, including, among
others, world supply
price, production
capacity,
coal
quality
and
characteristics,
transportation
capability
and
costs,
blending
capability,
brand
name
and diversified operations. We are subject to competition from producers in Australia, the U.S., Canada, Russia,
Mongolia and
other coal
producing countries. See
Item 1A. “Risk
Factors—We face increasing
competition, which
could adversely affect profitability.”
Information Regarding Major Customers
We are well-positioned
in the key
high-growth Asian
markets (Japan, South
Korea and India)
as sales to
direct
end
users
in
the
region
represented
58.5%
of
our
total
revenue,
including
Tata
Steel
Limited
and
TS
Global
Procurement Company Pte Ltd, collectively Tata
Steel, which accounted for 20.1%
of total revenue, in 2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
18
4%
30%
9%
21%
15%
8%
8%
4%
Customer -FY2024
direct sales by coal revenue
Other Asia countries
Japan
South Korea
India
North America
South America
Europe
Australia
0%
20%
40%
60%
80%
Tata
Top 5
Top 10
Top
Customers
by coal revenues
FY 24
FY 23
The charts below
show our direct
sales by geographic region
in 2024 and
our sales by
customers 2023 and 2024.
Tata
Steel
Our U.S. Operations and Australian
Operations are parties to
Long Term
Coal Sale and Purchase Agreements,
or Long
Term
Agreements,
with Tata
Steel with
contract terms
ending March
31, 2025.
We have
commenced
negotiations with
Tata
Steel to
extend our
long-term
relationship after
the expiration
of the
current Long
Term
Agreements, and
we expect
to continue
our long-term
relationship with
Tata
Steel through
potential new
Long
Term
Agreements, with terms ending March 31, 2028.
Under the potential new Long Term
Agreements,
we intend to provide for the sale of a minimum
aggregate total
of 2.5 MMt
of coal per
contract year across
the Group, consisting
of certain specific
quantities of HCC
and PCI
Coal. The
coal is
intended to
be sold
Free on
Board (Incoterms
2020), or
FOB, priced with
reference to
benchmark
indices
and
the
agreements
contain
industry
standard
terms
and
conditions
with
respect
to
delivery,
transportation, inspection, assignment, taxes and performance
failure.
Stanwell
We are party
to contractual arrangements
with Stanwell, including
the previously mentioned
ACSA–see Item 1.
“Business - Our Competitive Strengths, and the New
Coal Supply Deed, or the Supply Deed”.
Under the
ACSA, we
deliver
thermal coal
from Curragh
to Stanwell
at an
agreed
price and
quantity.
Stanwell
may vary the quantity of thermal coal purchased each year so the total quantity
to be delivered to Stanwell each
year cannot be precisely forecast.
The coal that we
supply to Stanwell constitutes the majority
of the thermal coal
production from Curragh. Our cost of supplying coal to Stanwell has
been greater than the contracted price paid
by Stanwell during the year ended December 31, 2024 and
for prior years.
Under the
ACSA, we
also share
part of
the revenue
earned from
export coal
sales (from
particular Tenements
(as defined below))
with Stanwell
through various
rebates. The
most material
rebate is
the export
price rebate,
which is linked to the realized export coal price for a defined
Met coal product, or Reference coal,
as follows:
Coronado Global Resources Inc. Form 10-K December 31,
2024
19
•
coal price of Reference coal exceeds the Tier
1 Rebate Coal Floor Price, we pay
a rebate of 25% of the
difference between the realized export coal price and
the Tier 1 Rebate Coal Floor
Price.
•
coal price of Reference coal exceeds the Tier
2 Rebate Coal Floor Price, we pay
a rebate of 10% of the
difference between the realized export coal price and
the Tier 2 Rebate Coal Floor
Price.
In addition, the ACSA also provides for:
•
above 7.0 MMtpa; and
•
The total Stanwell
rebate for the
year ended
December 31,
2024, was $116.9
million and has
been included in
the
Consolidated
Statements
of
Operations
and
Comprehensive
Income
included
elsewhere
in
this
Annual
Report on Form 10-K.
The Supply
Deed grants
us the
right to
mine the
coal reserves
in the
Stanwell Reserved
Area, or
the SRA.
In
exchange, we have
entered into
the NCSA with
Stanwell, that
will commence
upon the expiration
of the ACSA
(which is expected to occur in early 2027 based on estimated volume remaining to be delivered).
The key terms
under the NCSA are described below:
•
-
-
-
•
Stanwell will reduce to 2
million ‘Tonnes Equivalent’ per annum (based on a nominal
gross calorific value
of
25.6GJ)
at
a
fixed
contract
price
that
varies
in
accordance
with
agreed
formulae,
inclusive
of
all
statutory charges and royalties
in respect of coal
sold and delivered under
the NCSA. The supply
term,
the contract
tonnage
and the
contract price
under the
NCSA are
subject to
adjustment
in accordance
with a financial model agreed between Stanwell and us.
•
In summary, we have agreed that the total value of the discount
received by Stanwell on coal supplied to
it under
the NCSA should
(by the expiration
of the NCSA)
be equal to
the net present
value of
$155.2 million
(A$210.0
million) as at the date of the Supply Deed, using a contractual
pre-tax discount rate of 13% per annum.
The net
present value of the deferred consideration was $2
85.1 million as of December 31, 2024. See Item
8. “Financial
Statements and Supplementary Data—Deferred Consideration
Liability.”
As part
of the
NCSA, Coronado
and Stanwell
entered into
an Option
Coal Supply
Agreement, or
the OCSA
in
respect of the
supply of certain
additional coal
to Stanwell during
the term of
the NCSA. Thermal
coal supplied
to Stanwell under the OCSA will be at the higher of cost
or market value at the time of sale.
See Item 1A. “Risk
Factors—Risks related
to the Supply
Deed with
Stanwell may
adversely affect
our financial
condition and results of operations.”
Transportation
Coal produced
at
our mining
properties
is transported
to customers
by a
combination
of road,
rail,
barge
and
ship. See Item 2. “Properties”
for descriptions of the transportation infrastructure
available to each of our mining
properties. Rail
and port
services
are typically
contracted
on a
long-term,
take-or-pay basis
in Australia,
while
these contracts are
typically negotiated on
a quarterly basis
in the U.S.
See Item 7. “Management’s
Discussion
and Analysis
of Financial Condition
and Results
of Operations—Liquidity
and Capital
Resources” for
additional
information on our take-or-pay obligations.
Australian Operations
Our Australian
Operations
typically sell
export coal
FOB, with
the customer
paying for
transportation
from the
outbound shipping port.
The majority of
Curragh’s export
Met coal is railed
approximately 300 kilometers
to the
Coronado Global Resources Inc. Form 10-K December 31,
2024
20
Port of
Gladstone for export
via two main
port terminals, RG
Tanna Coal Terminal,
or RGTCT, and Wiggins Island
Coal Export Terminal,
or WICET.
Curragh also has capacity available
to stockpile coal at the Port
of Gladstone.
For
sales
of
thermal
coal
to
Stanwell,
Stanwell
is
responsible
for
the
transport
of
coal
to
the
Stanwell
Power
Station.
Rail Services
Curragh is linked to the Blackwater
rail line of the Central Queensland Coal
Network an integrated coal haulage
rail system owned and operated
by Aurizon Network Pty
Ltd. Curragh has secured
annual rail haulage capacity
of
up
to
11.5
MMtpa
(plus
surge
capacity)
under
long-term
rail
haulage
agreements
with
Aurizon
Operations
Limited, or Aurizon Operations, and Pacific National Holdings
Pty Limited, or Pacific National.
The RGTCT Coal
Transport Services
Agreement with Aurizon
Operations is for
8.5 MMtpa of
haulage capacity
to RGTCT. Curragh pays a minimum monthly charge (components of which are payable on a take-or-pay basis),
which is calculated with reference
to the below-rail access charges,
haulage/freight charges, a minimum
annual
tonnage
charge
and
other
charges.
The
RGTCT
Coal
Transport
Services
Agreement
terminates
on
June 30,
2030.
The Coal Transport
Services Agreement
with Pacific
National is
for 1.0
MMtpa of
haulage capacity
to RGTCT.
Curragh pays
a minimum
monthly charge
(components of
which are
payable on
a take-or-pay
basis), which
is
calculated with reference to the below-rail
access charges, haulage/freight charges, a
minimum annual tonnage
charge and other charges. The
Coal Transport Services
Agreement with Pacific National terminates
on July 31,
2029.
The
Wiggins
Island
Rail
Project,
or
WIRP,
Transport
Services
Agreement
with
Aurizon
Operations
is
for
2.0
MMtpa of capacity to
WICET.
This contract is effectively
100% take-or-pay (for a
portion of the rail haulage
and
all capacity access charges). The WIRP Transport
Services Agreement expires on June 30, 2030.
Port Services
Curragh exports coal
through two terminals
at the Port
of Gladstone, RGTCT
and WICET.
At RGTCT,
Curragh
and
Gladstone
Port
Corporation
Limited,
or GPC,
are
parties
to
a
coal
handling
agreement
that
expires
on
June 30, 2030.
The agreement may
be renewed
at our
request and,
subject to certain
conditions, GPC is required
to agree
to the
extension
if there
is capacity
at RGTCT
to allow
the extension.
We currently
have the
right
to
export between 7.7 MMtpa and 8.7 MMtpa at our nomination
on a take-or-pay basis.
We have
a minority
interest
in WICET
Holdings
Pty Ltd, whose
wholly-owned
subsidiary,
Wiggins Island
Coal
Export Terminal
Pty Ltd, or WICETPL, owns WICET.
Other coal producers who export coal through WICET also
hold
shares
in
WICET
Holdings
Pty Ltd.
In
addition,
we
and
the
other
coal
producers
(or
shippers)
have
take-or-pay agreements with WICETPL and pay
a terminal handling charge to
export coal through WICET, which
is
calculated
by
reference
to
WICET’s
annual
operating
costs,
as
well
as
finance
costs
associated
with
WICETPL’s
external
debt
facilities.
Our
take-or-pay
agreement
with
WICETPL,
or
the
WICET
Take
-or-Pay
Agreement,
provides
Curragh
with
export
capacity
of
1.5
MMtpa.
The
WICET
Take
-or-Pay
Agreement
is
an
“evergreen” agreement, with rolling ten-year terms. If we inform WICETPL that we
do not wish to continue to roll
the term
of the WICET
Take
-or-Pay Agreement,
the term
would be set
at nine years
and the terminal
handling
charge payable by us would
be increased so that our
proportion of WICETPL’s debt is amortized to nil by
the end
of that nine-year term.
Under
the
WICET
Take
-or-Pay
Agreement,
we
are
obligated
to
pay
for
that
capacity
via
terminal
handling
charges, whether utilized or not. The terminal handling charge
payable by us can be adjusted by WICETPL if
our
share of WICETPL’s
operational and finance
costs increases, including
because of increased
operational costs
or because another shipper defaults and
has its capacity reduced to nil. The terminal
handling charge is subject
to a financing cap
set out in the
terminal handling
charge methodology and
has already been
reached and is
in
force.
If
another
shipper
defaults
under
its
take-or-pay
agreement,
each
remaining
shipper
is
effectively
proportionately
liable
to
pay
that
defaulting
shipper’s
share of
WICETPL’s
costs
going
forward,
in the
form
of
increased terminal handling charges.
If we default under the
WICET Take
-or-Pay Agreement, we would
be obligated to pay a
termination payment to
WICETPL. The termination
payment effectively
represents our proportion
of WICETPL’s
total debt outstanding,
based on the
proportion of
our contracted
tonnage to
the total contracted
tonnage of
shippers at
WICET at the
time the payment is triggered. Shippers can also
become liable to pay the termination
payment where there is a
permanent cessation of
operations at WICET.
Since WICET began shipping
export
tonnages in April 2015,
five
shareholders
of
WICET
Holdings
Pty Ltd
have
entered
into
administration
and
their
relevant
take-or-pay
Coronado Global Resources Inc. Form 10-K December 31,
2024
21
agreements have subsequently
terminated, resulting in
the aggregate contracted
tonnage of shippers decreasing
from 27 MMtpa to 13.9 MMtpa.
Under the WICET Take
-or-Pay Agreement, we are required
to provide security (which is
provided in the form of
a bank guarantee). The amount of
the security must cover our estimated liabilities as
a shipper under the WICET
Take
-or-Pay Agreement for the following twelve-month period. If
we are in default under
the WICET Take-or-Pay
Agreement and are subject
to a termination payment,
WICETPL can draw on
the security and apply
it to amounts
owing by
us. See
Item 1A. “Risk
Factors—Risks
related to
our investment
in WICET
may adversely
affect our
financial condition
and results
of operations”
and Item 7.
“Management’s
Discussion and
Analysis of
Financial
Condition
and
Results
of
Operations—Liquidity
and
Capital
Resources”
for
additional
information
on
our
take-or-pay obligations.
U.S. Operations
Our
U.S.
Operations’
domestic
contracts
are
generally
priced
FOR
at
the
mine
with
customers
bearing
the
transportation costs from
the mine to the
applicable end user.
For direct sales to
export customers, we hold
the
transportation
contract
and
are
responsible
for
the
cost
to
the
export
facility,
and
the
export
customer
is
responsible
for
the
transportation/freight
cost
from
the
export
facility
to
the
destination.
A
portion
of
our
U.S.
Operations
export
sales
are
made
through
intermediaries.
For
these
sales,
the
intermediary
typically
takes
ownership of the coal as
it is loaded into the
railcar. The intermediary is responsible for the rail transportation and
port costs.
Rail Services
Our U.S. Operations are served by Norfolk Southern and CSX
Transportation railroads.
Norfolk
Southern
railroad
serves
our
Buchanan
mining
property
and
transports
Buchanan’s
coal
to
Lamberts
Point Coal
Terminal
Pier 6
and to
CNX Marine
Terminal
for export
customers and
to our
domestic customers
either directly
or
indirectly
via inland
river
dock
facilities
where
the coal
is transloaded
on
to
barges
and
then
transported to the customer’s facilities.
CSX Transportation railroad
serves our Logan mining property.
CSX transports coal to
Pier IX Terminal
or CNX
Marine Terminal or Dominion
Terminal Associates (DTA) for export customers
and either
directly to
the customers
or to inland river dock facilities for domestic customers.
Port Services
Norfolk
Southern’s
Lamberts
Point
Coal
Terminal
Pier
6
is
the
largest
coal
loading
facility
in
the
Northern
Hemisphere with 48 million tons
of annual export capacity
and is the main terminal
at Lamberts Point located
in
Norfolk, Virginia. Pier IX is
a coal export terminal with an annual
export capacity of 16 million tons located
in the
Port of Hampton Roads in Newport News, Virginia.
Our
U.S.
Operations
also
have
alternate
port
access
through
CNX
Marine
Terminal
which
is
a
transshipping
terminal at the Port of Baltimore owned by CONSOL Energy.
Suppliers
The principal
goods we
purchase
in support
of our
mining activities
are mining
equipment, replacement
parts,
diesel fuel, natural gas, ammonium-nitrate
and emulsion-based explosives, off
-road tires, steel-related products
(including roof control materials),
lubricants and electricity.
As a general matter, we have many well-established,
strategic relationships
with our
key suppliers
of goods
and do not
believe that
we are
dependent on
any of
our
individual suppliers.
We also manage
and operate several
major pieces of
mining equipment and
facilities to produce
and transport
coal,
including,
but
not
limited to,
longwall
mining
systems,
continuous
miners,
draglines,
dozers,
excavators,
shovels,
haul
trucks,
conveyors,
coal
preparation
plants,
or
CPPs,
and
rail
loading
and
blending
facilities.
Obtaining and repairing these
major pieces of equipment
and facilities often involves
long lead times. We
strive
to extend the lives of existing equipment and facilities
through maintenance practices and equipment rebuilds
to
defer the
requirement for
larger capital
purchases. We
use our
global leverage
with major
suppliers to
support
security of
supply to
meet the
requirements
of our
active mines.
See Item
2. “Properties”
for more
information
about operations at our mining properties.
We partner with contractors and other third parties for exploration, mining, and other services, generally, and the
success of these relationships are important
for our current operations and the
advancement of our development
Coronado Global Resources Inc. Form 10-K December 31,
2024
22
projects.
See
Item
1A.
“Risk
Factors—Our
profitability
could
be
affected
adversely
by
the
failure
of
suppliers
and/or outside contractors to perform.”
Environmental Sustainability
Met coal is an essential ingredient in the production of
steel, which is the most utilized metal in the world and
an
essential material underpinning social and economic growth. Steel’s strength and durability make it critical in the
construction of
major projects
(including renewable
energy infrastructure),
transportation
technology,
electrical
equipment, and everyday household goods.
While we acknowledge the
emissions-intensive cumulative impacts of mining,
transportation and use of
Met coal,
as critical player in
the world’s transition to renewable energy
future, Coronado has an important
role in operating
sustainably and responsibly.
We
are
focused
on
extracting
high-quality
Met
coal
with
commitment
to
safe
and
sustainable
practices.
Coal
mining
is
one
of
the
most
environmentally
regulated
industries
in
the
world,
and
it
is
vital
that
we
strive
to
consistently meet or exceed relevant regulatory standards.
We are subject to various environmental laws, regulations and
public policies in Australia and the U.S.
Managing
our environment and climate
change risks is a
key component of our
corporate strategy and
it is integrated into
our daily
operations. We seek
to minimize
our environmental impact
and ensure
we meet
or exceed
our legislative
and regulatory environmental obligations.
Coronado’s sustainability principles include the following
:
●
employee safety.
●
landscapes.
●
engaging in an open and transparent manner.
●
relevance of what they do.
●
●
Climate change
We believe that
climate change is
a complex
challenge that requires
action at all
levels of
society. Climate change
can
heighten
existing
physical
and
non-physical
impacts
and
risks
and
introduce
new
ones
that
can
affect
business performance in the near and long-term.
While our operations
are recognized as
vital contributors to
the communities and
economies in which
we operate,
we acknowledge that our mining
activities create GHG emissions.
Climate change is one of
the most significant
issues for
the steel
industry,
and the
industry has
made significant
reductions in
GHG emissions
by improving
energy efficiency and using new
technologies. Where possible, we
are continuing to identify
and implement GHG
emissions and
energy reduction
opportunities across
our business,
whilst monitoring
climate related
risks and
the sustainability of our operations. We are
committed to working with other industry
partners to support, develop
and
introduce
new
coal
production
and
energy-generation
technologies,
that
help
reduce
the
environmental
impact while continuing to meet global energy and steel demands.
Coronado’s operational emissions profile is predominantly
Scope 1 emissions. Within these Scope 1 emissions
,
the major source is fugitive emissions, which is an inherent gas released as a
function of mining coal source and
diesel consumption.
Our Australian Operations disclose
GHG Scope 1
and 2 emissions annually
to the Clean
Energy Regulator under
the National Greenhouse and Energy Reporting Scheme.
Our
U.S.
Operations
undergo
detailed
internal
inspections
as
well
as
rigorous
evaluations
by
both
state
and
federal inspectors
on a
regular basis.
Our U.S.
Operations
disclose GHG
Scope 1
and 2
emissions, including
fugitive emissions
(methane),
for the
facilities
required
to report
their
emissions
annually
to the
United
States
Environmental Protection Agency.
Coronado Global Resources Inc. Form 10-K December 31,
2024
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Our
operations
are
currently
focused
on
implementing
reporting
improvements,
identifying
opportunities
for
reducing emissions
on a per
ton of coal
production basis
and benchmarking
ourselves against
our peer
group.
Coronado launched its first set of GHG targets
in 2021 and has committed to targeting reductions
in its Scope 1
and 2 emissions by 30% by 2030 from its 2019 emissions
baseline.
Emissions
reduction
estimates
to 2030
have
been evaluated
based
on improvements
that
can reasonably
be
expected using
technologies
currently available.
Detailed
analysis to
determine
economic
viability of
available
technologies has not been considered.
The target reduction of 30% by 2030 is based on the current mine plans for Coronado's Curragh and U.S. mines
and
is
not
expected
to
be
a
linear
reduction.
As
we
address
our
material
areas
of
impact
including
emission
reductions and opportunities, the need for mitigation technologies
are likely to increase.
Senior leaders and subject matter
experts from our Australian and
U.S.
Operations meet regularly to discuss and
analyze
how
climate
change
might
impact
our
strategies
and
to
review
how
we
are
progressing
towards
our
emissions reduction targets. This
is achieved through
reviewing the accuracy of
the emissions forecast, providing
updates on
decarbonization projects
and discussing
idea pipelines
in relation
to new
technologies. Our
capital
allocation framework integrates climate-related risks
and opportunities into its decision-making processes.
We are
also evaluating
a range
of potential
projects that
could have
a positive
impact on
our emissions
profile
including
options
for
energy
generation
from
solar,
wind
and
gas
along
with
on-grid
solutions.
In
2022,
we
commissioned the
Buchanan Ventilation
Air Methane,
or VAM,
abatement project
on vent
shaft 16
at our
U.S.
Operations. The
project utilizes the
latest technology
to convert
fugitive methane
gas emissions
to carbon
dioxide.
Given
the
proven
success
of
the
original
VAM
unit,
we
installed
a
second
unit
at
vent
shaft
18
at
our
U.S.
Operations in 2024.
The 2
VAM
units
are
anticipated
to
destroy
approximately
300,000
tCO2-e
annually
(depending
on
operating
conditions), a significant contribution to our strategic
path to a 30% reduction target by 2030.
At Curragh
we have continued
to develop
our understanding
of the gas
reservoirs and
are progressing
studies
for open cut
gas drainage in
advance of mining.
In 2024, a
second gas truck
trial was run
to confirm the
gas to
diesel displacement ratio and understand additional operational
impacts for future options.
Increased public concern may result in
additional regulatory risks as new laws and
regulations aimed at reducing
GHG emissions come into effect in the jurisdictions in which we operate. Any legislation that limits or taxes GHG
emissions could adversely impact our growth, increase
our operating costs, or reduce demand for our coal.
With
respect
to
physical
climate
risks,
our
operations
may
be
impacted
by
adverse
weather-related
events
potentially resulting in lost production, supply chain disruptions and increased operating costs, which could have
a material adverse impact on our financial conditions and results
of operations.
Additionally, federal,
state and international GHG and climate
change initiatives, associated regulations or
other
voluntary
commitments
to
reduce
GHG
emissions,
including
the
Safeguard
Mechanism
in
Australia,
could
significantly
increase
the
cost
of
coal
production
and
consumption,
increase
costs
as
a
result
of
regulations
requiring the
installation of
emissions control
technologies, increase
expenses associated
with the
purchase of
emissions
reduction
credits
to
comply
with
future
emissions
trading
programs,
or
significantly
reduce
coal
consumption through
implementation
of a
future clean
energy standard.
Such initiatives
and regulations
could
further reduce demand
or prices for
our coal in
both domestic and
international markets,
could adversely affect
our ability
to produce
coal and
to develop
our reserves,
could reduce
the value
of our
coal and
coal reserves,
and may have a material adverse effect on our business,
financial condition and results of operations.
Human Capital Disclosures
People
Our ability to
attract and
retain skilled,
motivated and
engaged employees
is an
essential part
of our
business.
Investing in the skill and capabilities of our people will underwrite
our long-term growth and sustainability. In both
Australia and the
U.S., we operate
in regional locations
with highly competitive
labor markets. In
each location,
we
are
creating
a
high-performing
workforce
with
a
talent
pipeline
for
future
leaders,
including
succession
planning for critical
roles. To
achieve this,
we continue
to create a
culture that welcomes
and values
all people
and
where
our
core
values
of
collaboration,
accountability,
respect
and
excellence
are
demonstrated
in
everything that we do.
Worldwide we had 1,951 employees as of
December 31, 2024. In addition, as of
December 31, 2024, there were
1,790 contractors supplementing the permanent workforce, primarily
at Curragh. Since we operate in areas with
Coronado Global Resources Inc. Form 10-K December 31,
2024
24
highly competitive labor markets, it is essential that we
have a continued focus on attracting the
best people, and
ensuring we have programs in place to engage, develop
and retain them within our business.
We continue to support
initiatives to enhance our
culture, increase our
ability to attract and
retain the workforce
we need, and
to drive our
desire to build
safe, high-performing
teams. This
includes extensive
efforts to
gather
feedback from
our employees
and contacting
partners through
surveys, focus
groups and
team empowerment
sessions. Following
analysis of the
feedback, priorities
are identified,
and cultural
programs designed
to bridge
gaps between current and desired cultural states are developed
and implemented.
As of
December 31,
2024, approximately
10.1% of
our total
employees, all
at our
Australian Operations,
were
covered by a single, federally-certified collective Enterprise Agreement, or the EA, for specified groups of mining
and maintenance employees. Our U.S. Operations employ
a 100% non-union labor force.
Safety
On May 31, 2024, one
of our employees was fatally
injured while working in our
Buchanan underground mining
complex in
Virginia in
the U.S.
The Company
ceased operations
at its
Buchanan mine
until June
3, 2024,
and
worked with the appropriate U.S. federal and state agencies on
site investigating the incident.
Our
employees
and
contractors
are
our
most
valuable
assets,
and
we
consider
their
safety
our
number
one
priority.
Safety is
essential to
all business
functions and
is never
to be
compromised, under
any circumstance.
The
health
and
safety
of
our
people
is
reinforced
every
day
through
our
culture,
behaviors,
training,
communication and procedures.
We manage safety and health
through continuous improvement efforts
and the implementation of practices
and
procedures that address safety risks first and in full compliance with the legal and
regulatory frameworks of both
the
U.S.
and
Australia.
We
empower
our
people
to
consistently
strive
to
have
a
safety
mindset,
and
act
by
applying,
managing
and
monitoring
effective
controls
to
prevent
adverse
outcomes
with
all
activities
and
operations. Our programs are intended
to reinforce our position that
safety and health should always
be front of
mind for all employees and contractors.
Safety
performance
is
monitored
through
physical
observations
from
both
internal
and
external
parties
and
through the
reporting of
key metrics.
Safety performance
is assessed
monthly against
internal goals
and on
a
quarterly basis is benchmarked against our peers within
the mining industry.
We set targets
for safety interactions
which is a process
where employees observe
a risk behavior and
provide
immediate feedback
if it
is deemed,
or has the
potential to
be, unsafe.
This is
monitored by
management daily
through safety meetings,
site visits, employee
discussions, and management
observations. The process
allows
for greater empowerment, innovation and employee input
into the mining process.
The 12-month rolling
average Total
Reportable Injury
Frequency Rate,
or TRIFR, as
of December
31, 2024 for
our Australian Operations
was 2.22
and the Total Reportable Incident
Rate, or TRIR,
for 12-month rolling
average
as of December
31, 2024
for our
U.S. Operations
was 2.22.
We strive
to ensure
that we
continue to
provide a
safe operating environment for all employees and contractors.
Workforce composition
Our
values
(CARE
–
Collaboration,
Accountability,
Respect,
Excellence)
guide
our
policies,
processes
and
actions as they
relate to
all workforce
interactions and
people related
initiatives. As
part of these
values and
to
enable our
people to
excel within
the workplace,
we are
building an
inclusive workforce,
where each
person’s
viewpoint is heard, valued and respected.
We
invest
in
training
and
development
programs
for
both
our
new
and
long-serving
employees.
Investing
in
graduate
recruitment,
traineeships
and
internship
programs
through
partnerships
with
leading
education
institutions
has
been
central
to
accessing
talent
and
building
our
brand.
Further,
our
internal
leadership
development enhances succession planning and the transfer
of skills and knowledge across our business.
As of December 31, 2024:
•
in the U.S., approximately 5.9% of Senior Managers
were female.
•
in Australia,
over
31% of
employees
at a
General
Manager,
Senior
Manager
and
Senior Professional
level were female, an increase from 28.4% in 2023.
•
6.0% of our global workforce was female.
Coronado Global Resources Inc. Form 10-K December 31,
2024
25
•
55.6% of all
employees were
between the
ages of
30 and
50 years
old, and
the number
of employees
under 30 increased from 13.7% as of December 31, 2023 to
16.2% as of December 31, 2024.
Attracting and retaining the right people
Attracting and retaining the best
people is crucial to our
growth and success. Talent
is a valuable resource, and
we actively seek
individuals who are
not only highly skilled
but also align
with our core
values and goals.
Since
operating
in regional
areas
where talent
availability
and
the
market
is competitive,
we recognize
the
need for
additional efforts
to retain
our employees.
We continue
to enhance
our remuneration,
cash benefits
and other
non-tangible benefits to ensure
team members are appropriately recognized and rewarded.
In
2024,
our
total
rolling
turnover
rate
was
27.7%
and
17.5%
in
Australia
and
the
U.S.,
respectively,
and
our
voluntary departure rolling
turnover rate was
18.1% and 13.2%
in Australia and
the U.S., respectively.
In 2023,
our total
rolling
turnover rate
was 18.1%
and 13.4%
in Australia
and the
U.S.,
respectively,
and
our voluntary
departure rolling turnover rate was 15.5% and 10.9%,
in Australia and the U.S., respectively.
Regulatory Matters—Australia
Our Australian Operations
are regulated by the
laws and regulations
of the Commonwealth
of Australia, or
Cth,
the State
of Queensland,
or Qld,
and local
jurisdictions. Most
environmental laws
are promulgated
at the
state
level, but the Australian federal government has a
role in approval of actions which have national
environmental
significance.
In
Queensland,
the
environmental
laws
relevant
to
coal
mining
include
development
legislation,
pollution,
waste,
ecosystem
protection,
cultural
heritage
and
native
title,
land
contamination
and
rehabilitation
legislation. In addition, the Australian federal government regulates
foreign investment and export approvals.
Tenements
We control the
coal mining
rights at Curragh
under 14 coal
and infrastructure
mining leases, or
MLs, and three
mineral development licenses, or MDLs, granted pursuant to the Mineral Resources Act 1989 (Qld).
See Item 2.
“Properties” for more information regarding the Tenements.
Mineral Resources Act 1989 (Qld)
The
Mineral
Resources
Act
1989
(Qld),
or
the
MRA;
and
the
Mineral
and
Energy
Resources
(Common
Provisions)
Act
2014
(Qld),
together,
provide
for
the
assessment,
development
and
utilization
of
mineral
resources
in
Queensland
to
the
maximum
extent
practicable,
consistent
with
sound
economic
and
land
use
management.
The
MRA
vests
ownership
of
minerals,
with
limited
exceptions,
in
the
Crown
(i.e., the
state
government). A
royalty is
payable to
the Crown
for the
right to
extract minerals. The
MRA creates
different tenures
for different mining activities, such as prospecting, exploring and mining. A ML is the most important tenure, as it
permits
the
extraction
of
minerals
in
conjunction
with
other
required
authorities.
The
MRA
imposes
general
conditions on a ML.
The MRA
provides that
regulations may
prescribe the
royalties payable
in respect
of minerals mined
from land
to
the
Crown.
Royalty
rates
are
prescribed
under
the
Mineral
Resources
Regulation
2013
(Qld),
or
the
MR
Regulation. A person
who is the holder
of a ML must
keep the records
necessary to enable the
royalty payable
by the person
to be ascertained.
In relation
to coal,
the MR Regulation
prescribes a
progressive six
tier royalty
rate
structure,
with
the
applicable
royalty
rate
determined
based
on
the
average
price
per
Mt
of
coal
sold,
disposed of, or used in the return period.
The tiers
applicable in
calculating
the royalty
payable for
our Australian
Operations
that have
been applicable
since July 1, 2022 are as set out below:
•
7% for average coal price per Mt sold up to and including
A$100 per Mt;
•
12.5% for average coal price per Mt sold from over
A$100 up to and including A$150 per Mt;
•
15% for average coal price per Mt sold from over A$150
up to and including A$175 per Mt;
•
20% for average coal price per Mt sold from over A$175
up to and including A$225 per Mt;
•
30% for average coal price per Mt sold from over A$225
up to and including A$300 per Mt; and
•
Coronado Global Resources Inc. Form 10-K December 31,
2024
26
The royalty
payable
for
coal sold,
disposed
of or
used
in
a return
period
is then
calculated
by multiplying
the
royalty rate
by the
value of
the coal.
Queensland Revenue
Office
Public Ruling
MRA001.4 contains
details on
the
costs
that
can
(and
cannot)
be
deducted
when
calculating
the
applicable
royalty
and
the
method
for
determining the value of the coal. In October
2024, the Progressive Coal Royalties Protection (Keep Them in the
Bank) Bill 2024 (Qld)
was passed by the
Queensland Government, amending the MRA
to introduce a coal
royalty
rate floor, by providing that a regulation may not prescribe coal royalty rates that are lower than those prescribed
from
time
to
time,
meaning
that
royalty
tiers
can
only
be
reduced
by
the
operation
of
legislation.
Current
processes will continue
to apply for
any increase to
coal royalty rates.
See Item 2. “Properties”
for a discussion
of the royalties currently applicable to Curragh.
Mining Rehabilitation (Reclamation)
Mine closure and rehabilitation risks and costs are regulated
by Queensland state legislation.
Amongst
other
things,
an
Environmental
Authority
Holder,
or
EA
Holder,
must
provide
the
Queensland
State
Government with financial assurance for the purpose of drawing upon in the event that an EA Holder defaults on
its obligations to rehabilitate the mine site.
The Mineral
and
Energy
Resources
(Financial
Provisioning)
Act
2018 (Qld),
or the
Financial
Provisioning
Act
establishes
a
financial
provisioning
scheme,
or
the
Scheme,
from
which
the
Department
of
the
Environment,
Tourism,
Science
and
Innovation,
or
the
DETSI,
sources
funds
to
rehabilitate
and
remediate
land
subject
to
mining.
Under
the
Financial
Provisioning
Act,
all
mine
operators
are
required
to
make
a
submission
to
the
DETSI
in
respect
of
an
Estimated
Rehabilitation
Cost,
or
ERC,
for
the
mine
site.
The
ERC
is
determined
using
the
DETSI-approved
ERC
calculator.
Using
this
information,
the
DETSI
sets
the
ERC
for
the
mine.
The
DETSI
provides the ERC to the manager of the Scheme, or the Scheme Manager.
The Scheme Manager undertakes a
risk assessment of the
mine, which is based
upon independent advice
from a Scheme risk
advisor. EAs
with at
least $100,000
in ERCs
will undergo
an annual
risk category
allocation assessment
process. The
assessment
process will
determine whether
the holder
will be
required to
provide a
contribution
to the
Scheme’s Financial
Provisioning Fund
and/or to
provide surety
to the
Scheme Manager
for that
EA. It
includes detail
on the
mine
operator’s financial
soundness and credit
rating, characteristics of
the mining operation
(e.g., life of mine,
or LOM,
and off-take agreements),
rehabilitation history,
environmental compliance
history and the
submission made by
the Company.
Risk categories include
high, moderate, low
and very low.
If the ERC
and risk categories
are set
at moderate,
low or
very low
for a
mine, then
there is
a need
to pay
an annual
contribution
based on
a small
percentage of
the ERC to
the Scheme.
The prescribed
percentages for
each category
are: (1)
Very
low: 0.5%;
(2)
Low:
1.0%;
and
(3)
Moderate:
2.75%.
If the
category
is high,
then
the
operation
provides
a
surety
for the
whole
ERC
and
possibly
a
contribution
to
the
Scheme.
The
risk
assessment
of
the
mine
and,
therefore,
the
amount of the contribution to the fund is assessed and paid annually in perpetuity,
or until a clearance certificate
is obtained.
Each year, the Scheme Manager
is required to
make an Annual
Review Allocation to
determine whether the
mine
will provide surety or pay a contribution to the Scheme
depending on the value of the ERC relating to applicable
environmental authorities, as follows:
1)
2)
3)
There
can
be
no
assurance
that
our
risk
category
allocation
will
not
change
in
future
years.
Our
financial
obligations may increase due to a number of factors, including
but not limited to:
•
any changes that increase ERC amounts or are the result
of disturbances;
•
any major Environmental Authority,
or EA, amendment;
•
compliance with existing EA obligations; and
•
major changes to financial soundness of the EA holder.
Curragh has
2
EAs, which
are covered
by the
Scheme,
namely
EA number
EPML00643713
and
EA number
EPVX00635313.
In
November
2024,
the
Scheme
Manager
completed
the
assessment
of
the
Annual
Review
Allocation for EA number
EPML00643713 and issued an Annual
Review Allocation of “Moderate”.
The moderate
rating resulted in Curragh being obliged to make a financial contribution to
the Scheme of 2.75% of the ERC.
In
January 2025, the Scheme Manager completed an
assessment of the Annual Review Allocation
for EA Number
Coronado Global Resources Inc. Form 10-K December 31,
2024
27
EPVX00635313 and
issued an
Annual Review
Allocation of
“High” in
respect of
MDL162 requiring
Curragh to
maintain its historical financial assurance in respect of 100%
of the ERC for that EA.
The Financial Provisioning Act also requires for a Progressive Rehabilitation and Closure
Plan, or a PRCP, to be
produced with
respect to mined
land. This
requirement is integrated
into the
existing EA processes
for new mines,
minimizing the
regulatory burden
on government
and industry.
All mining
projects carried
out under
a ML
that
make a site-specific
EA application will
be required to
provide a PRCP. If approved by
the administering authority,
a stand-alone PRCP
schedule will be
given to the
applicant together with
the EA. The
PRCP schedule will
contain
milestones with completion dates
for achieving progressive rehabilitation
of the mine site.
Curragh’s PRCP was
submitted to the DETSI,
the relevant government
department, on October
20, 2022, and Curragh
has complied
with all further requests for information made by the DETSI.
The DETSI advised Curragh that the end date of the
decision period in relation to the PRCP has been extended
to September 30, 2025.
Environmental Protection Act 1994 (Qld)
The
primary
legislation
regulating
environmental
management
of
mining
activities
in
Queensland
is
the
Environmental
Protection
Act 1994
(Qld),
or
the
EP
Act. Its
objective
is to
protect
Queensland’s
environment
while allowing
for development
that improves
the total
quality of
life, both
now and
in the
future, in
a way
that
maintains ecologically sustainable
development. Under the EP
Act, it is an offense
to carry out a
mining activity
unless the person holds or is acting under an EA for the activity. The EA imposes conditions on a project. It is an
offense to contravene a condition of an
EA. In addition to the requirements found
in the conditions of an EA, the
holder must
also meet
its general
environmental
duty and
duty to
notify of
environmental
harm and
otherwise
comply with the provisions of the
EP Act and the regulations promulgated thereunder. For example, the following
are offenses under the EP Act:
•
causing serious or material environmental harm;
•
causing environmental nuisance;
•
depositing prescribed water contaminants in waters and related
matters; and
•
placing contaminants where environmental harm or nuisance
may be caused.
The EA
holder must
also be
a registered
suitable operator under
the EP
Act. We are
a registered
suitable operator
(RSO Number 293585).
We
hold
EA
EPML00643713,
which
authorizes
the
open
cut
and
underground
mining
of
black
coal,
mineral
processing,
chemical
storage,
waste
disposal
and
sewage
treatment
over
the
14
MLs
at
Curragh
on
certain
conditions.
Those
conditions
include
requirements
in
relation
to
air
and
water
quality,
regulated
structures
(e.g., dams),
noise
and
vibration,
waste,
land
use,
rehabilitation,
watercourse
diversion
and
GHG
emission
reduction programs.
We
also
hold
a
range
of
subsidiary
EAs
for
our
Australian
Operations.
See
“—Mining
Rehabilitation
(Reclamation)” above for more information regarding the Financial
Provisioning Act.
Aboriginal Cultural Heritage Act 2003 (Qld)
The Aboriginal Cultural Heritage Act 2003 (Qld) imposes a duty of care on all persons to take all reasonable and
practicable measures to ensure that any activity conducted does not harm
Aboriginal cultural heritage. Its object
is to provide effective recognition, protection and conservation
of Aboriginal cultural heritage.
We have obligations
relating to Aboriginal cultural
heritage with respect
to a number of
cultural heritage objects
and areas located within
the area of the
Tenements.
We work closely
with the Aboriginal people
to manage the
cultural heritage objects, areas or
evidence of archaeological significance, within
our mining operations. We
are
party to a Cultural Heritage Management Plan (and associated Cultural
Services Agreement) with the Gaangalu
Nation People that applies
to all of the Tenements.
The plan establishes a
coordinating committee and sets
out
the steps to be followed to manage activities that may impact
Aboriginal cultural heritage.
Native Title Act 1993 (Cth)
The Native Title Act
1993 (Cth), or NTA,
sets out procedures under which
native title claims may be lodged
and
determined and compensation claimed for
the extinguishment or impairment of
the native title rights or interests
of Aboriginal peoples. Its object is to provide for the recognition and protection of native title, to establish ways in
which future
dealings affecting
native title
may proceed
and to
set standards
for those
dealings, to
establish a
Coronado Global Resources Inc. Form 10-K December 31,
2024
28
mechanism
for determining
claims to
native
title
and to
provide for,
or permit,
the
validation of
past
acts,
and
intermediate period acts, invalidated because of the existence
of native title.
With respect to MLs and MDLs
granted under the Mineral Resources
Act 1989 (Qld) on state land
where native
title has not
been extinguished,
a principle
known as
the non-extinguishment
principle governs.
Broadly,
under
this principle, native title rights are suspended while the mining tenure,
as renewed from time to time, is in force.
The grant
(or renewal)
of a
mining tenure
in respect
of land
where native
title may
exist must
comply with
the
NTA
to ensure
the validity
of the tenure.
Registered native
title claimants
have certain
notification, consultation
and negotiation rights relating
to mining tenures. Where
native title is extinguished
(i.e., freehold land), the NTA
does not apply.
Regional Planning Interests
The Regional Planning
Interests Act 2014
(Qld), or
the RPI Act,
manages the
impact of resource
activities and
other
regulated
activities
in
areas
of
the
state
that
contribute,
or
are
likely
to
contribute,
to
Queensland’s
economic, social
and environmental
prosperity (e.g., competing
land use
activities on
prime farming
land). The
RPI
Act
identifies
areas
of
Queensland
that
are
of
regional
interest,
including
strategic
cropping
areas
and
strategic environmental
areas. Under the
RPI Act,
conducting a resource
activity in an
area of regional
interest
requires
a
regional
interest
development
approval,
unless
operating
under
an
exemption.
Importantly,
pre-existing mining activities being undertaken at the date of
the introduction of the legislation are exempt.
In conjunction with
the grant in
July 2016 of
ML 700006, ML
700007 and ML
700008 at Curragh,
we were granted
a
regional
interest
development
approval,
which
is
subject
to
regional
interest
conditions,
such
as
mitigation.
Certain protection conditions
are also imposed
on us with respect
to ML 80171,
which includes an
obligation to
provide mitigation in the event that strategic cropping land
is impacted by future operations.
Environmental Protection and Biodiversity Conservation
Act 1999 (Cth)
The Environment Protection
and Biodiversity Conservation
Act 1999 (Cth),
or the EPBC Act,
provides a federal
framework
to
protect
and
manage
matters
of
national
environmental
significance,
such
as
listed
threatened
species
and
ecological
communities
and
water
resources.
In
addition,
the
EPBC
Act
confers
jurisdiction
over
actions
that
have
a
significant
impact
on
the
environment
where
the
actions
affect,
or
are
taken
on,
Commonwealth land, or are carried out by a Commonwealth agency.
Under the
EPBC Act, “controlled
actions” that have
or are likely
to have a
significant impact on
a matter
of national
environmental significance are subject
to a rigorous assessment
and approval process. A
person must not take
a “controlled
action” unless approval
is granted
under the
EPBC Act.
Any person
proposing to
carry out
an “action”
that may be
a “controlled action”
must refer the
matter to the
Commonwealth Minister
for a determination
as to
whether the proposed action is a controlled action.
On
November 2,
2016,
the
Commonwealth
Minister
for
the
Department
of
the
Environment
and
Energy
administering the
EPBC Act
approved the
extension of
the existing Curragh
mining area to
include mining
four
additional Tenements
—ML 700006,
ML 700007,
ML 700008
and ML 700009
(EPBC Act
referral 2015/7508)—
as
a
“controlled
action,”
on
certain
conditions.
The
conditions
include
requirements
in
relation
to
offsets
and
groundwater.
Mine Health and Safety
The primary health and safety legislation that applies
to Curragh are the Coal Mining Safety and
Health Act 1999
(Qld) and the relevant Coal
Mining Safety and Health Regulation
2001 (Qld), which we refer
to, together,
as the
Coal Mining Safety Legislation.
Additional
legislative
requirements
apply
to
operations
that
are
carried
on
off-site
or
which
are
not
principally
related to
coal mining
(e.g., transport, rail
operations, etc.).
The Coal
Mining Safety
Legislation imposes
safety
and health
obligations on
persons who
operate coal
mines or
who may
affect
the safety
or health
of others
at
coal mines. Under the Coal Mining Safety Legislation, the operator
of a coal mine must, among other things:
•
ensure that the risk to coal mine workers while at the
operator’s mine is at an acceptable level;
•
audit and review the effectiveness and implementation of the
safety and health management system to
ensure the risk to persons is at an acceptable level;
•
provide adequate
resources to
ensure the
effectiveness
and implementation
of the
safety and
health
management system;
Coronado Global Resources Inc. Form 10-K December 31,
2024
29
•
ensure the operator’s own
safety and health and
the safety and
health of others
is not affected
by the
way the operator conducts coal mining operations;
•
not carry out an
activity at the coal
mine that creates
a risk to
a person on
an adjacent or
overlapping
petroleum authority if the risk is higher than an acceptable
level of risk;
•
appoint a site senior executive for the mine;
•
ensure the site senior executive develops and implements
a safety and health management system for
all people at the mine;
•
ensure the site senior
executive develops, implements
and maintains a management
structure for the
mine that helps ensure the safety and health of persons
at the mine; and
•
not operate the coal mine without a safety and health
management system for the mine.
We recognize that health and
safety are imperative to the ongoing
success of our Australian Operations.
As the
operator at Curragh, we have
in place a comprehensive safety
and health management system,
which includes
an emergency
response
team,
to address
these legislative
requirements.
In accordance
with the
Coal Mining
Safety Legislation,
we have also established an occupational hygiene
baseline for dust exposure at Curragh.
Water Act 2000 (Qld)
In Queensland, all entitlements to the use, control and
flow of water are vested in the state and regulated by
the
Water Act
2000 (Qld).
Allocations under
the Water
Act 2000 (Qld)
can be managed
by a water
supply scheme
operator,
such
as
SunWater Ltd,
which
is
a
Government-owned
corporation
regulated
by
the
Queensland
Competition Authority.
We have purchased
the required water
allocations for Curragh
and entered into channel
and pipeline infrastructure agreements and river supply agreements with SunWater
Ltd to regulate the supply of
water pursuant to these
allocations. See Item 1A. “Risk Factors—In times
of drought and/or shortage of
available
water,
our
operations
and
production,
particularly
at
Curragh,
could
be
negatively
impacted
if
the
regulators
impose restrictions on our water offtake licenses
that are required for water used in the CPPs.”
National Greenhouse and Energy Reporting Act 2007
(Cth)
The National Greenhouse and Energy Reporting Act 2007 (Cth) imposes requirements for both foreign and local
corporations
whose
carbon
dioxide
production
GHG
and/or
energy
consumption
meets
a
certain
threshold
to
register and
report GHG
emissions and
abatement actions,
as well
as energy
production and
consumption
as
part of
a single,
national reporting
system. The
Clean Energy
Regulator administers
the National
Greenhouse
and
Energy Reporting
Act
2007 (Cth),
and
the
Department
of Climate
Change,
Energy,
the
Environment
and
Water is responsible for related policy
developments and review.
The
Australian
Government’s
Safeguard
Mechanism
is
a
legislative
framework
to
incentivize
emissions
reductions,
through
declining
emissions
limits,
called
baselines,
predictably
and
gradually
on
a
trajectory
consistent with
achieving the
Government’s emissions
reduction target
of 43%
below 2005
levels by
2030 and
net zero by
2050. The scheme
includes credits
to provide
an incentive
to companies
to reduce
their emissions
below their baselines.
The
Safeguard
Mechanism
applies
to
industrial
facilities
emitting
more
than
100,000
tons
of
carbon
dioxide
equivalent per
year,
including in
electricity,
mining, oil
and gas
production, manufacturing,
transport and
waste
facilities.
In
accordance
with
the
Safeguard
Mechanism,
Curragh
has
established
a
production-adjusted
(intensity)
baseline for covered emissions (Scope 1).
Curragh
will
be
required
to
take
action
to
keep
its
net
Scope
1
emissions
at
or
below
the
baseline
through
emissions reduction,
by for example,
purchasing Safeguard
Mechanism Credits,
or SMCs, from
another facility
captured by the Safeguard Mechanism,
or face enforcement measures.
Labor Relations
Minimum employment entitlements, embodied in the National Employment Standards, apply to all private-sector
employees
and
employers
in Australia
under
the federal
Fair Work
Act 2009
(Cth).
These standards
regulate
employment conditions and paid leave. Employees who are associated with
the day-to-day operations of a local
mine or mines and who are not located in head office or corporate administration offices are also covered by the
Coronado Global Resources Inc. Form 10-K December 31,
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30
Black Coal Mining Industry Award 2010 which regulates conditions including termination arrangements, pay and
hours of work.
Unfair dismissal,
enterprise bargaining,
bullying claims,
industrial actions
and resolution
of workplace
disputes
are also regulated
under state
and federal
legislation. Some
of the workers
at Curragh
are covered
by the
EA,
which was approved by the
Fair Work Commission,
or the Commission, Australia’s
national workplace relations
tribunal. See “—Human Capital Disclosures” above.
On December 7,
2023, the Fair
Work Legislation Amendment (Closing
Loopholes) Bill 2023,
containing the Same
Job, Same
Pay concept
proposed by
the Australian
Government was
passed. It
came into
effect in
November
2024.
The new laws seek to identify when
a labor hire worker is completing
the same job as an ordinary employee,
and
subsequently, determine
what is an applicable rate of pay for the labor hire worker
completing this job.
In
respect
of
the
workers
at
Curragh
covered
by
the
EA,
applications
will
be
allowed
to
be
made
to
the
Commission for an
order that labor
hire employees must
be paid
at least what
they would receive
under Curragh’s
EA
(noting
that
there
are
exemptions
for
registered
trainees
and
apprentices,
short-term
placements,
small
businesses and genuine service contractors).
The
Commission
will
then
make
an
assessment
that
a
Same
Job,
Same
Pay
order
would
be
fair
and
reasonable—including
whether
labor
hire workers
are performing
the
same work
as EA
employees—and
can
make an order
setting a ‘Protected
Rate of Pay.’
Any conditions in
Curragh’s EA that are
captured by the
meaning
of “full rate of pay” (e.g., any incentives, loadings, allowances, and penalty rates) will be payable to
the labor hire
worker, so long as those conditions
are enlivened by the “same job” being performed.
Regulatory Matters—U.S.
Federal,
state
and
local
authorities
regulate
the
U.S.
coal
mining
industry
with
respect
to
matters,
such
as
employee
health
and
safety,
protection
of
the
environment,
permitting
and
licensing
requirements,
air
quality
standards, water pollution, plant and wildlife protection, the
reclamation and restoration of mining properties after
mining
has
been
completed,
the
discharge
of
materials
into
the
environment,
surface
subsidence
from
underground mining and the effects
of mining on groundwater quality
and availability.
In addition, the industry is
affected
by significant
requirements
mandating
certain
benefits
for current
and
retired
coal miners.
Numerous
federal,
state
and
local
governmental
permits
and
approvals
are
required
for
mining
operations.
Because
of
extensive and
comprehensive
regulatory
requirements,
violations during
mining
operations
occur from
time
to
time in
the industry.
In addition
to the
non-exhaustive summary
of material
federal legislation
described below,
our operations are
subject to a
wide array of
federal, state and
local environmental
law, including,
for example,
the Safe Drinking Water Act, the Toxic
Substances Control Act, the Emergency Planning and Community Right-
to-Know Act, the National Historic Preservation Act of 1966 and the Migratory Bird Treaty Act of 1918, as well as
state regulatory schemes that either mirror federal law or create
additional layers of regulation.
Clean Air Act of 1970
The U.S.
Clean Air
Act of
1970, or
the CAA,
regulates airborne
pollution that
may be
potentially detrimental
to
human
health,
the
environment
or
natural
resources.
The
CAA
and
comparable
state
laws
that
govern
air
emissions affect U.S. coal mining operations both
directly and indirectly.
Direct impacts
on coal
mining and
processing operations
may occur
through the
CAA permitting
requirements
and/or
emission
control
requirements
relating
to
particulate
matter,
or
PM,
nitrogen
dioxide,
ozone
and
sulfur
dioxide,
or
SO
2
.
For
example,
the
U.S.
Environmental
Protection
Agency,
or
the
EPA,
pursuant
to
the
CAA,
administers rules
that apply
PM limits to
emissions from
coal preparation
and processing
plants constructed
or
modified after April 28, 2008.
In addition, in recent years,
the EPA
has adopted more stringent
national ambient
air quality standards, or NAAQS for PM, nitrogen oxide,
ozone and SO
2
. It is possible that these modifications as
well as future modifications
to NAAQS could directly
or indirectly impact our
mining operations in a
manner that
includes,
but
is
not
limited
to,
the
EPA
designating
new
areas
of
the
country
as
being
in
nonattainment
of
applicable NAAQS or expanding existing
nonattainment areas, and prompting
additional local control measures
pursuant to state
implementation plans, or
SIPs, required to
address such revised
NAAQS. SIPs may
be state-
specific or regional in scope.
Under the CAA, individual
states have up to
12 years from the date
of designation
of attainment/nonattainment areas to secure reductions
from emission sources.
The CAA
also indirectly, but significantly, affects the
U.S. coal
industry by
extensively regulating the
SO2, nitrogen
oxides,
mercury,
PM,
GHGs,
and
other
substances
emitted
by
coal-burning
facilities,
such
as
steel
manufacturers,
coke
ovens
and
coal
fired
electric
power
generating
facilities.
Over
time,
the
EPA
has
promulgated or proposed CAA
regulations to impose more
stringent air emission standards
for a number
of these
Coronado Global Resources Inc. Form 10-K December 31,
2024
31
coal-burning
industries,
especially
the
power
generation
sector.
Collectively,
CAA
regulations
and
uncertainty
around
future
CAA
requirements
could
reduce
the
demand
for
coal
and,
depending
on
the
extent
of
such
reduction, could have a material adverse effect
on our business, financial condition and operations.
NAAQS Revisions.
The CAA
requires the
EPA
to periodically
review and,
if appropriate,
revise the
NAAQS to
ensure protection of
public health.
In recent years,
the EPA
has reviewed the
NAAQS for PM,
ozone and SO
2
.
The PM NAAQS
was last revised
and made more
stringent in 2012.
Individual states have developed
SIPs, which
detail the PM emission reductions their sources must meet in order for
the state to maintain or achieve the 2012
PM NAAQS. On
April 14,
2020, the EPA announced
its intention
to retain, without
changes, the 2012
PM NAAQS.
This action
was finalized by
the EPA on December
18, 2020.
On March
6, 2024,
the EPA
finalized a rule
lowering
the level of
the annual
24-hour PM2.5
standards for
fine PM
NAAQS from
12.0 ug/m3
to 9.0
ug/m3. The
more
stringent NAAQS, requires new
SIPs to be developed
and filed with the
EPA, which may trigger additional control
technology
for
mining
equipment
or
coal-burning
facilities,
or
result
in
additional
challenges
to
permitting
and
expansion
efforts.
The
revised
NAAQs
has
been
challenged
by
industry
participants
and
litigation
remains
ongoing.
Cross State Air Pollution Rule, or CSAPR.
The CAA includes a so-called Good Neighbor
Provision that requires
upwind states to
eliminate their significant
contributions to
downwind states’
nonattainment of the
NAAQS. On
July 6, 2011,
the EPA
finalized the CSAPR,
which was
meant to satisfy
this Good Neighbor
Provision. CSAPR
requires the
District of
Columbia and
27 states
from Texas
eastward (not
including the
New England
states or
Delaware) to reduce power plant emissions that
cross state lines and significantly contribute to ozone and/or
fine
particle
pollution
in
downwind
states.
Following
litigation
in the
D.C. Circuit
and
U.S. Supreme
Court,
the first
phase of
the nitrogen
oxide and
SO2 emissions
reductions required
by CSAPR
commenced in
January 2015;
further reductions of both pollutants in the second phase
of CSAPR became effective in January 2017.
On
March
15,
2021,
the
EPA
finalized
a
rule
update
that
requires
additional
emissions
reduction
of
nitrogen
oxides
from
power
plants
in
twelve
states.
Additional
emission
reduction
requirements
in
these
states
could
adversely affect the demand for coal.
On April 30, 2021, the EPA finalized the Revised CSAPR Update Rule, which fully addressed twenty-one states’
outstanding interstate
pollution transport
obligations for
the 2008
NAAQS for
ozone.
For nine
states, the
EPA
found that
their projected
2021 emissions
do not
significantly contribute
to non-attainment
and/or maintenance
problems in downwind states.
The remaining twelve states
were found to
contribute to the non-attainment and/or
maintenance
problems
in
downwind
states.
The
EPA
indicated
that
it
would
issue
new
or
amended
Federal
Implementation Plans
requiring additional
emissions reductions
from electricity
generating units
in those states
beginning in the 2021 ozone season.
Mercury and Air
Toxic
Standards, or MATS.
The EPA
published the final
MATS
rule in the
Federal Register
on
February 16,
2012.
The
MATS
rule
revised
the
New
Source
Performance
Standards,
or
NSPS,
for
nitrogen
oxides,
SO2
and
PM
for
new
and
modified
coal-fueled
electricity
generating
plants,
and
imposed
Maximum
Achievable Control
Technology,
or MACT,
emission limits
on hazardous
air pollutants,
or HAPs,
from new
and
existing coal-fueled and oil-fueled electricity generating plants. MACT standards limit emissions of mercury,
acid
gas HAPs, non-mercury HAP
metals and organic
HAPs. The rule
provided three years
for compliance with
MACT
standards and
a possible
fourth year
if a
state permitting
agency determined
that such
was necessary
for the
installation
of
controls.
Though
the
MATS
rule
has
been
the
subject
of
various
legal
challenges,
the
EPA
reaffirmed the
scientific, economic,
and legal
underpinnings
of the
MATS
rule in
February 2023.
In May
2024,
the EPA finalized even more stringent non-mercury metal surrogate filterable PM emission
standards for all coal-
fueled electricity
generating plants
and new
mercury emission
standards
for lignite-powered
units. This
rule is
currently subject to ongoing litigation. The
more stringent regulations may increase the
cost of coal-fired electric
power generation and negatively impact the demand for
coal.
GHG Emissions
Standards and Guidelines.
In 2014, the
EPA
proposed a sweeping
rule, known
as the “Clean
Power Plan,” to cut carbon emissions from existing electricity generating units, including coal-fired power
plants.
Following
a
series
of
legal
challenges,
the
EPA
commenced
new
rulemaking
proceedings
in
October
2017,
ultimately rescinding the Clean
Power Plan and finalizing
its replacement, the Affordable
Clean Energy,
or ACE
rule, in
June 2019.
The ACE
rule establishes
emission guidelines
for states
to develop
plans to
address GHG
emissions
from
existing
coal-fired
power
plants.
Like
its
predecessor,
the
ACE
rule
was
subject
to
significant
litigation and was remanded to the EPA
for further action.
On April
25, 2024,
the
EPA
finalized
a rule
that
(1)
repeals
the
ACE rule,
(2)
established
guidelines
for GHG
emissions
from
existing
fossil-fuel
fired
steam
generating
EGUs,
(3)
finalizes
revisions
to
the
NSPS
for
GHG
emissions
from
new
and
reconstructed
fossil
fuel-fired
stationary
combustion
turbine
EGUs,
and
(4)
finalizes
revisions to
the NSPS
for GHG
emissions from
fossil fuel
fired steam
generating EGUs
that undertake
a large
modification.
The final rule requires widespread implementation of carbon capture and sequestration and use of
Coronado Global Resources Inc. Form 10-K December 31,
2024
32
green
hydrogen.
The
new
rules
may
require
significant
capital
expenditure
to
develop
the
infrastructure
necessary for compliance and could impact our customers
and future demand for coal.
There have
also been
numerous challenges
to the
permitting of
new coal-fired
power plants
by environmental
organizations and state regulators for
concerns related to GHG emissions.
For instance, various state regulatory
authorities have rejected the construction of new coal-fueled power plants based
on the uncertainty surrounding
the potential costs associated with GHG emissions under future laws.
In addition, several permits issued to new
coal-fueled power plants without GHG emission
limits have been appealed to the EPA's
Environmental Appeals
Board.
A federal appeals court allowed a
lawsuit pursuing federal common law claims
to proceed against certain
utilities on the basis that they may
have created a public nuisance due to
their emissions of carbon dioxide, while
a
second
federal
appeals
court
dismissed
a
similar
case
on
procedural
grounds.
The
U.S.
Supreme
Court
overturned that
decision in
June 2011,
holding that
federal common
law provides
no basis
for public
nuisance
claims against utilities due to their carbon dioxide emissions.
The U.S. Supreme Court did not, however, decide
whether similar claims
can be brought under
state common law.
As a result,
tort-type liabilities remain a
concern.
To
the extent
that
these risks
affect
our current
and prospective
customers,
they
may reduce
the
demand
for
coal-fired power, and may
affect long-term demand for coal.
Regional Haze.
The EPA
promulgated a regional
haze program designed
to protect and
to improve visibility
at
and around Class I Areas, which are generally national parks, national wilderness areas and international parks.
This program
may restrict
the construction
of
new
coal-fired
power
plants,
the
operation
of
which
may
impair
visibility
at
and
around
the
Class
I
Areas.
Additionally,
the
program
requires
certain
existing
coal-fired
power
plants
to install
additional
control measures
designed
to limit
haze-causing
emissions,
such
as SO2,
nitrogen
oxide and PM. On August 30, 2022, the EPA issued a final action finding that 15 states had failed to
submit SIPs
by the
July 31,
2021 deadline.
Such failure
triggers a
two year
deadline for
the EPA
to promulgate
a Federal
Implementation
Plan
unless
the
states
submit
and
the
EPA
approves
a
SIP
that
meets
the
applicable
requirements.
If states adopt SIPs with more stringent requirements,
demand for coal could be affected.
New Source
Review,
or NSR.
Pursuant to
NSR regulations,
stationary sources
of air
pollution must
obtain an
NSR permit prior to beginning
construction of a new
“major” source of emissions
or a “major” modification
of an
existing major source.
If a project
is determined to
trigger NSR, Prevention of
Significant Deterioration regulations
require the project to implement Best
Available Control Technology
and/or Non-Attainment New Source Review
Lowest Achievable Emission Rate control technology.
Beginning in the late 1990s, the EPA filed lawsuits against owners of many
coal-fired power plants in the eastern
U.S. alleging that
the owners performed
non-routine maintenance, causing increased emissions
that should have
triggered
the
application
of
these NSR
standards.
Some of
these
lawsuits
have
been settled
with
the
owners
agreeing to
install additional
emission control
devices in
their coal-fired
power plants.
In recent
years, the
EPA
proposed and promulgated several revisions to its
NSR regulations and policies concerning NSR permitting.
For
example,
in
2023,
the
EPA
issued
a rule
that
would
require
additional
sources
to
consider
fugitive
emissions
when determining if
NSR has been
triggered. Remaining litigation and
uncertainty around the NSR
program rules
could impact demand for coal.
Coke Oven Batteries and Coke Ovens.
Coke Oven Batteries and Coke Ovens: Pushing, Quenching, and Battery
Stacks are two source categories
regulated by the CAA. On
July 5, 2024, the EPA
finalized amendments to the
emissions standards for Coke Ovens which lower the limits for leaks from doors, lids,
and offtakes, require fence
line monitoring
for benzene
and impose
new emissions
standards
for previously
unregulated
HAPs within
the
category such as hydrogen
chloride, hydrogen fluoride,
and mercury.
These standards may
impact our current
and prospective customers and reduce long-term demand for
coal.
Clean Water Act of 1972
The U.S. Clean Water Act of 1972, or the CWA,
and corresponding state law governs the discharge of toxic and
non-toxic pollutants into
the waters
of the
U.S. CWA requirements
may directly
or indirectly
affect U.S. coal
mining
operations.
Water Discharge.
The CWA and corresponding state laws affect coal mining operations by imposing restrictions
on discharges of
wastewater into waters of
the U.S. through
the National Pollutant
Discharge Elimination System,
or
NPDES,
or
an
equally
stringent
program
delegated
to
a
state
agency.
The
EPA
and
states
may
develop
standards and
limitations for
certain pollutants,
including through
the technology-based
standard program
and
water
quality
standard
program.
These
restrictions
often
require
us
to
pre-treat
the
wastewater
prior
to
discharging it. NPDES permits
require regular monitoring, reporting and
compliance with effluent limitations. New
requirements
under the
CWA
and corresponding
state laws
may cause
us to
incur significant
additional
costs
that could adversely affect our operating results.
Coronado Global Resources Inc. Form 10-K December 31,
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33
Dredge and Fill Permits.
Many mining activities, such as the development
of refuse impoundments, fresh water
impoundments,
refuse fills,
and other
similar structures,
may result
in impacts
to waters
of the
U.S., including
wetlands, streams and, in certain instances, man-made
conveyances that have a hydrologic connection
to such
streams or wetlands. Under the CWA, coal
companies are also required to obtain
a Section 404 permit from the
USACE prior to
conducting certain mining
activities, such as
the development of
refuse and slurry
impoundments,
fresh water impoundments,
refuse fills and
other similar structures
that may affect
waters of the
U.S., including
wetlands,
streams
and,
in
certain
instances,
man-made
conveyances
that
have
a
hydrologic
connection
to
streams or
wetlands. The
USACE is
authorized to
issue general
“nationwide” permits
for specific
categories of
activities that are similar in nature
and that are determined to have
minimal adverse effects on the
environment.
Permits issued
pursuant to
Nationwide Permit
21, or NWP
21, generally
authorize the disposal
of dredged and
fill material from surface coal mining activities into waters of the U.S., subject to certain restrictions. Since March
2007, permits
under NWP
21 were
reissued for
a five-year
period with
new provisions
intended to
strengthen
environmental protections.
There must
be appropriate
mitigation in
accordance with
nationwide general
permit
conditions
rather
than
less
restricted
state-required
mitigation
requirements,
and
permit
holders
must
receive
explicit authorization from the USACE
before proceeding with proposed
mining activities. The USACE may
also
issue individual permits for mining activities that do not qualify for
NWP 21.
For many years, there has been uncertainty
surrounding the definition of the
“waters of the U.S.” scope of
CWA
jurisdiction. On
August 29,
2023, the
EPA and the
Department of
the Army
issued a
final rule
revising the
definition
of “waters of the U.S. ” under the CWA.
This rule conforms with the U.S. Supreme Court’s
decision in Sackett v.
Environmental Protection, 598 U.S. 651 (2023). The revised definition and the U.S. Supreme Court’s
decision in
Sackett narrow
agency
jurisdiction
under
the CWA.
However,
due
to ongoing
litigation,
implementation
of
the
revised definition has been delayed in several states and territories. It is uncertain what impact this may have on
our operations.
Effluent Limitations
Guidelines for
the Steam
Electric Power
Generating Industry.
On September
30, 2015,
the
EPA published a
final rule setting new or additional requirements for
various wastewater discharges from steam
electric power plants.
The rule set
zero discharge
requirements for
some waste streams,
as well as
new, more
stringent limits for arsenic, mercury,
selenium and nitrogen applicable to certain other waste streams.
On August 31, 2020, the EPA finalized a rule to revise the guidelines and standards for the steam electric power
generating point source category applicable to two categories of wastewater streams regulated by
the 2015 rule:
flue
gas
desulfurization
wastewater,
or
FGD,
and
bottom
ash
transport
water,
or
BA.
With
respect
to
FGD,
selenium standards are
less stringent than
under the 2015
rule, and certain
types of facilities,
such as facilities
with
high
FGD
flow,
low
utilization
boilers
and
those
set
to
retire
coal
combustion
units,
are
subject
to
less
stringent
effluent
limits.
The
compliance
deadline
for
FGD
technology-based
wastewater
limits
was
extended
from
December
31,
2023
to
December
31,
2025.
On
May
9,
2024,
the
EPA
finalized
new
rules
to
revise
the
technology-based
effluent
limitations
guidelines
and
standards
for
the
steam
electric
power
generating
point
source category applicable to FGD
wastewater, BA transport water, and combustion residual leachate at existing
sources. These
rules may
significantly
increase costs
for many coal
-fired steam
electric power
plants and
may
impact demand for coal.
Surface Mining Control and Reclamation Act of 1977
The
Surface
Mining
Control
and
Reclamation
Act of
1977,
or the
SMCRA,
which
is administered
by the
U.S.
Office
of
Surface
Mining
Reclamation
and
Enforcement,
or
OSM,
establishes
operational,
reclamation
and
closure standards for all aspects of surface mining and
many aspects of underground mining in the U.S.
Under the SMCRA, a
state may submit a
qualifying surface mining
regulatory scheme to the
OSM, and request
to exert
exclusive jurisdiction over
surface mining activities
within its territory. If
OSM finds that
the state’s scheme
meets
SMCRA’s
requirements
and
gives
approval,
the
state
becomes
the
primary
regulatory
authority
with
oversight from
OSM. Each
of Virginia,
West Virginia
and Pennsylvania,
where our
Buchanan, Logan
and Mon
Valley
operations
are
based,
has
adopted
qualifying
surface
mining
regulatory
schemes
and
has
primary
jurisdiction over
surface mining activities
within their
respective territories. However, even
if a
state gains
approval
for its
surface mining
regulatory program,
the OSM
retains significant
federal oversight,
including the
ability
to
perform inspections of
all surface
mining sites to
ensure state program
and mine
operator compliance with
federal
minimum standards. The OSM and its state counterparts
also oversee and evaluate standards of:
•
performance (both during operations and during reclamation);
•
permitting
(applications
must
describe
the
pre-mining
environmental
conditions
and
land
use,
the
intended mining and reclamation standards, and the post-mining
use);
Coronado Global Resources Inc. Form 10-K December 31,
2024
34
•
financial assurance (SMCRA requires that mining companies post a bond sufficient to
cover the cost of
reclaiming the site, and the bond is not released
until mining is complete, the land has been reclaimed
and the OSM has approved the release);
•
inspection and
enforcement (including the
issuance of
notices of
violation and
the placement of
a mining
operation, its
owners and
controllers on
a federal
database known
as the
Applicant Violator
System,
meaning that such person or entity is blocked from obtaining
future mining permits); and
•
land restrictions (SMCRA
prohibits surface mining
on certain lands
and also allows
citizens to challenge
surface mining operations on the grounds that they will cause
a negative environmental impact).
Under the SMCRA
and its state
law counterparts, all
coal mining applications must
include mandatory “ownership
and control” information,
which generally includes
listing the names of
the operator’s officers
and directors, and
its principal stockholders owning 10% or
more of its voting shares,
among others. Regulations under the SMCRA
and its
state analogues provide
that a
mining permit or
modification can,
under certain
circumstances, be delayed,
refused or revoked if we
or any entity that owns
or controls us or is
under common ownership or
control with us
have unabated permit
violations or
have been
the subject of
permit or
reclamation bond revocation
or suspension.
The
permitting
required
for
coal
mining
continues
to
be
the
subject
of
increasingly
stringent
regulatory
and
administrative
requirements
and
extensive
activism
and
litigation
by
environmental
groups.
After
a
permit
application is
prepared and
submitted to
the regulatory
agency,
it goes
through a
completeness and
technical
review.
Regulatory authorities
have considerable
discretion in
the timing
of the
permit issuance
and the
public
has
the
right
to
comment
on
and
otherwise
engage
in
the
permitting
process,
including
public
hearings
and
through
intervention
in the
courts. Before
a SMCRA
permit
is issued,
a mine
operator
must submit
a bond
or
other form of financial security to guarantee the performance
of reclamation bonding requirements.
SMCRA
provides
for
three
categories
of
bonds:
surety
bonds,
collateral
bonds
and
self-bonds.
For
our
U.S.
Operations,
we
meet
our
reclamation
bonding
requirements
by
posting
surety
bonds
and
participation
in
the
Commonwealth
of
Virginia
bond
pool.
Our
total
amount
of
reclamation
surety
bonds
outstanding
was
$24.1 million as of
December 31, 2024.
The surety bond
requirements for a
mine represent
the calculated cost
to reclaim the current operations if it ceased to operate in the current period. The cost
calculation for each surety
bond must be completed according to the regulatory authority
of each state.
The SMCRA Abandoned Mine Land Fund requires a fee on all coal produced in
the U.S. The proceeds are used
to rehabilitate
lands mined
and left unreclaimed
prior to
August 3, 1977
and to pay
health care benefit
costs of
orphan beneficiaries of the Combined Fund created by the Coal Industry Retiree Health Benefit Act
of 1992. The
fee
amount
can
change
periodically
based
on
changes
in
federal
legislation.
See
Item 2.
“Properties”
for
information regarding reclamation and other taxes applicable
to our U.S. mining properties.
National Environmental Policy Act of 1969
The National Environmental Policy
Act of 1969,
or NEPA, applies to mining
operations or permitting requirements
that
require
federal
approvals.
NEPA
defines
the
processes
for
evaluating
and
communicating
environmental
impact
of
“major
federal
actions”
significantly
affecting
the
quality
of
the
human
environment,
such
as
the
permitting of new mine
development on federal
lands. NEPA
requires federal agencies,
such as the EPA
or the
OSM,
to
incorporate
environmental
considerations
in
their
planning
and
decision-making.
The
federal
agency
carrying out the
requirements of
NEPA
must prepare
a detailed statement
assessing the
environmental impact
of
and
alternatives
to
the
particular
action
requiring
agency
approval.
These
statements
are
referred
to
as
Environmental
Impact Statements or Environmental Assessments. As codified in the Fiscal Responsibility Act of
2023, environmental impact statements must include any reasonably foreseeable climate change-related effects
of
a
proposed
action,
reasonably
foreseeable
effects
that
cannot
be
avoided,
and
a
reasonable
range
of
alternatives. Interim
guidance
issued
in
January
2023
by
the
White
House
Council
on
Environmental
Quality
instructs
federal
agencies
to
consider
climate
change
impacts
of
a
proposed
action,
including
both
GHG
emissions
and
reductions,
and
recommends
consideration
of
additional
context
for
GHG
emissions,
such
as
social cost of
GHG estimates.
It is possible
that future mining
permitting decisions
will require more
significant
analysis of potential climate change impacts.
Resource Conservation and Recovery Act of 1976
The
Resource
Conservation
and
Recovery
Act
of
1976,
or
RCRA,
affects
U.S.
coal
mining
operations
by
establishing “cradle to grave” requirements for the generation, transportation, treatment, storage and disposal
of
solid and
hazardous wastes.
RCRA also
addresses the
environmental effects
of certain
past hazardous
waste
treatment, storage
and disposal
practices, and
may require
a current
or past
site owner
or operator
to remove
Coronado Global Resources Inc. Form 10-K December 31,
2024
35
improperly disposed hazardous wastes. RCRA also sets
forth a framework for managing certain non-hazardous
solid wastes.
Although coal combustion residuals,
or CCR, are exempted
from regulation as a
hazardous waste, CCR disposal
is
regulated
under
RCRA.
On
December
19,
2014,
the
EPA
finalized
a
CCR
rule
setting
nationwide
waste
standards for CCR disposal On August
24, 2018, the U.S. Court of Appeals
for the D.C. Circuit held that certain
provisions of the EPA’s
CCR rule were not sufficiently protective, and it invalidated those provisions. Since then,
the
EPA
has
finalized
changes
to
its
CCR
regulations,
which
include,
in
part,
regulating
unlined
ponds
but
extending
certain
compliance
deadlines
related
to
their
closure,
allowing
site-specific
alternate
liner
determinations. , and modifying
standards regarding beneficial use
and assessment of environmental
harm. On
May 8, 2024, the EPA finalized
new regulatory requirements for inactive CCR surface impoundments
at inactive
utilities that would require closure of such so-called “legacy”
CCR surface impoundments.
The EPA
regulations on CCR
management and disposal
exempt coal ash
that is disposed
of at mine
sites and
reserve any regulation thereof to the OSM.
After proposing CCR regulations in 2007, the OSMRE suspended all
rulemaking actions on CCRs, but could re-initiate them
in the future.
Comprehensive Environmental Response, Compensation,
and Liability Act of 1980
The Comprehensive Environmental Response, Compensation
and Liability Act of 1980, or CERCLA, authorizes
the federal
government and private
parties to
recover costs to
address threatened
or actual
releases of
hazardous
substances (broadly defined) that may
endanger public health or the
environment. Current owners and operators
of contaminated sites, past owners and operators
of contaminated sites at the time hazardous
substances were
disposed,
parties that
arranged
for the
disposal
or transport
of the
hazardous
substances
and transporters
of
hazardous substances
could be
potentially responsible
parties, or
PRPs, under
CERCLA. PRPs
may be
liable
for costs related to contaminated sites, including, but not limited to, site investigation and cleanup costs incurred
by the
government or
other parties,
damages to
natural resources
and costs
of certain
health assessments
or
studies.
We
could
face
liability
under
CERCLA
and
similar
state
laws
for
contamination
discovered
at
properties
that
(1) we currently own, lease or operate, (2) we, our
predecessors, or former subsidiaries have previously
owned,
leased or
operated, (3)
sites
to which
we, our
predecessors
or former
subsidiaries,
sent waste
materials, and
(4) sites at which hazardous substances from our facilities’
operations have otherwise come to be located.
Federal Mine Safety and Health Act of 1977
The Federal Mine Safety and Health
Act of 1977, or the Mine
Act, which was amended by the
Mine Improvement
and New
Emergency Response
Act of
2006, or
the MINER
Act, governs
federal oversight
of mine
safety and
authorizes the U.S.
Department of Labor’s
Mine Safety and
Health Administration,
or MSHA, to
regulate safety
and health conditions
for employees working
in mines within
the U.S., and
to enforce various
mandatory health
and safety requirements. The
Mine Act mandates four
annual inspections of underground coal
mines, two annual
inspections
of
all
surface
coal
mines,
and
permits
inspections
in
response
to
employee
complaints
of
unsafe
working
conditions.
The
statute
and
its
regulations
also
mandate
miner
training,
mine
rescue
teams
for
all
underground mines,
and involvement
of miners
and their
representatives in
health and
safety activities.
MSHA
has
also
promulgated
regulations
governing
a
wide
range
of
activities,
including
roof
support,
ventilation,
combustible
materials,
electrical
equipment,
fire
protection,
explosives
and
blasting,
and
mine
emergencies.
MSHA has the
statutory authority to
issue civil penalties
for non-compliance,
to set the
period for abatement
of
violations,
and
to
seek
injunctive
relief
requiring
a
company
to
cease
operations
until
certain
conditions
are
corrected.
The
MINER
Act
requires
mine
specific
emergency
response
plans
in
underground
coal
mines,
implemented new
regulations regarding
mine rescue
teams and
sealing of
abandoned areas,
requires prompt
notification of mine accidents, and imposes enhanced civil and criminal penalties for violations. MSHA continues
to interpret and implement
various provisions of the MINER
Act, along with introducing
new proposed regulations
and
standards.
For
example,
the
second
phase
of
MSHA’s
respirable
coal
mine
dust
rule
went
into
effect
in
February 2016 and requires increased sampling frequency and the use of continuous personal dust monitors. In
August 2016, the third and final phase of
the rule became effective, reducing the overall respirable dust standard
in
coal
mines
from
2.0
to
1.5
milligrams
per
cubic
meter
of
air.
On
April
18,
2024,
MSHA
issued
a
final
rule
concerning
respirable
crystalline
silica
that
lowers
the
permissible
exposure
limit
and
require
other
safety
measures such as exposure sampling and medical surveillance
.
Black Lung (Coal Worker’s Pneumoconiosis)
The
Mine
Act
amended
the
Federal
Coal
Mine
Health
and
Safety
Act
of
1969,
which
is
the
legislation
that
mandates compensation
for miners
who were
totally and
permanently
disabled
by the
progressive
respiratory
disease caused
by coal
workers’
pneumoconiosis,
or
black lung.
Under
current
federal law,
a U.S.
coal
mine
Coronado Global Resources Inc. Form 10-K December 31,
2024
36
operator must
pay federal
black lung
benefits and
medical expenses
to claimants
who are
current employees,
and
to
claimants
who
are
former
employees
who
last
worked
for
the
operator
after
July 1,
1973,
and
whose
claims for benefits are allowed. Coal mine operators must also make payments to a trust fund for the
payment of
benefits and medical expenses
to claimants who last
worked in the coal
industry prior to July 1,
1973. The trust
fund is funded by
an excise tax on sales
of U.S. production, excluding export
sales excluding export sales. Under
the Inflation Reduction
Act of 2022,
the excise tax
rates are 4.4%
of gross sales
price, not to
exceed $1.10 per
ton of underground coal and $0.55 per ton of surface coal.
In December 2024, the Office of Workers’ Compensation Programs finalized a rule making
certain reforms to the
self-insurance process for coal mine operators.
Historically, very few of
the miners who
sought federal black
lung benefits were
awarded these benefits;
however,
the
approval
rate
has
increased
following
implementation
of
black
lung
provisions
contained
in
the
Patient
Protection
and
Affordable
Care
Act
of
2010,
or
the
Affordable
Care
Act.
The
Affordable
Care
Act
introduced
significant changes to
the federal black
lung program, including
an automatic survivor
benefit paid upon
the death
of
a
miner
with
an
awarded
black
lung
claim,
and
established
a
rebuttable
presumption
with
regard
to
pneumoconiosis
among miners
with 15
or more
years of
coal
mine employment
that are
totally disabled
by a
respiratory condition. These changes could have
a material impact on
our costs expended in association
with the
federal black lung program. In addition to possibly incurring liability under federal statutes, we may also be liable
under
state
laws
for
black
lung
claims.
See
Note
18
to
the
accompanying
audited
Consolidated
Financial
Statements for further information on applicable insurance
coverage.
Endangered Species Act of 1973
The Endangered Species Act of 1973 governs the protection of endangered species in the U.S.
and requires the
U.S.
Department
of
the
Interior’s
Fish
and
Wildlife
Service
and
the
National
Oceanic
and
Atmospheric
Administration’s
National
Marine
Fisheries
Service
to
formally
review
any
federally
authorized,
funded
or
administered
action
that
could
negatively
affect
endangered
or
threatened
species.
Changes
in
listings
of
endangered species
or requirements
under these
regulations may impact
costs and our
ability to
mine at
locations
where endangered species are observed or may be affected
by mining operations.
National Labor Relations Act of 1935
The National
Labor Relations
Act of
1935, or
the NLRA,
governs collective
bargaining and
private sector
labor
and
management
relations.
While
we
do
not
have
a
unionized
workforce
in
the
U.S.,
to
the
extent
that
non-
supervisory employees decide to seek representation or engage
in other protected concerted labor activities, the
NLRA
and
the
rules
promulgated
by
the
National
Labor
Relations
Board,
or
NLRB,
set
the
parameters
for
employees’ and union activity and our
response. The NLRA applies to both
unionized and non-union workforces.
Any employee
complaints related
to the
pandemic and
any related
labor actions,
if they
are tied
to terms
and
conditions of employment that
affect the workforce generally,
will be governed by
the NLRA. In addition, NLRB
-
promulgated rules regarding joint
employer status under the
NLRA clarified the basis
upon which contractors and
vendors,
as
well
as
their
employees
(and
the
unions
representing
them),
could
allege
that
we
are
jointly
and
severally liable for any unfair labor
practices or bargaining obligations of the third-party employer. While the rules
made the joint
employer test
generally more
employer-friendly,
there is
always the
possibility of
claims that
we
are a joint employer with a contractor or vendor.
Regulation of explosives
Our surface
mining operations
are subject
to numerous
regulations relating
to blasting
activities,
including the
Federal Safe Explosives
Act, or SEA. SEA
applies to all
users of explosives.
Knowing or willful violations
of the
SEA may
result in
fines, imprisonment,
or both.
In addition,
violations of
SEA may
result in
revocation of
user
permits and seizure or forfeiture of explosive materials. Pursuant to federal regulations, we incur costs
to design
and implement blast schedules and to conduct pre-blast surveys and blast monitoring. In addition, the storage of
explosives is
subject to
strict regulatory
requirements established
by four
different federal
regulatory agencies.
For example, pursuant to a rule issued by the Department of Homeland Security in 2007, facilities
in possession
of chemicals
of interest,
including ammonium nitrate
at certain
threshold levels, must
complete a
screening review
in
order
to
help
determine
whether
there
is
a
high
level
of
security
risk
such
that
a
security
vulnerability
assessment and site
security plan
will be
required. The Bureau
of Alcohol,
Tobacco and Firearms and Explosives,
or
ATF,
regulates
the
sale,
possession,
storage
and
transportation
of
explosives
in
interstate
commerce.
In
August 2023, ATF
proposed an amendment
to its regulations
to require annual
reporting of explosive
materials
storage
to
local
fire
authorities.
In
addition
to
ATF
regulation,
the
U.S.
Department
of
Homeland
Security
continues to evaluate a proposed ammonium nitrate security
program rule.
Coronado Global Resources Inc. Form 10-K December 31,
2024
37
Available Information
We
file
annual,
quarterly
and
current
reports
and
other
documents
with
the
SEC.
The
public
can
obtain
any
documents that we file with the SEC at
www.sec.gov.
We also make available free of charge
our Annual Report
on Form
10-K, Quarterly
Reports on
Form 10-Q,
Current Reports
on Form
8-K and
any amendments
to those
reports
filed
or
furnished
pursuant
to
Section
13(a)
or
15(d)
of
the
Exchange
Act
as
soon
as
reasonably
practicable after
filing such
materials with,
or furnishing
such materials
to, the
SEC, on
or through
our internet
website, https://coronadoglobal.com/.
We are not including
the information contained on,
or accessible through,
any website as a part of, or incorporating it
by reference into, this Annual Report on Form 10-K, unless expressly
noted.
Coronado Global Resources Inc. Form 10-K December 31,
2024
38
ITEM 1A.
RISK FACTORS.
An investment
in our
securities
is speculative
and involves
a number
of risks.
We
believe
the risks
described
below are the
material risks most
likely to affect
the Company.
However,
the risks described
below may not
be
the only
risks
that
we
face.
Additional
unknown
risks
or risks
that we
currently
consider
immaterial,
may also
impair our business operations. You should carefully consider the specific risk factors discussed below,
together
with the information contained in this Annual Report on Form 10-K, including
Item 7. “Management’s Discussion
and Analysis of Financial
Condition and Results of
Operations” and our Consolidated
Financial Statements and
the related notes
to those statements
included elsewhere in
this Annual Report
on Form 10-K.
If any of
the events
or circumstances described below actually occurs,
our business, financial condition or
results of operations could
suffer, and the trading price
of our securities could decline significantly in future
periods.
Some of these principal risk factors include:
•
Concerns
about
the
environmental
impacts
of
coal
combustion,
including
possible
impacts
on
global
climate
issues,
are
resulting
in
increased
regulation
of
coal
combustion
and
coal
mining
in
many
jurisdictions, which could adversely impact our financial
condition or results of operations;
•
We are
subject to
risks from
both the
global transition
to a
net-zero emissions
economy and
the potential
physical impacts of climate change;
•
Our business may be materially
and adversely affected by the impact
on the global economy due
to, among
other events, significant geopolitical tensions, including ongoing
civil unrest or wars, or pandemics
;
•
Our profitability
depends upon the
prices we
receive for
our coal.
Prices for
coal are
volatile and
can fluctuate
widely based upon a number of factors beyond our control
;
•
Demand for our Met coal is significantly dependent on the steel
industry;
•
We face increasing competition, which could adversely
affect profitability;
•
Evolving tariffs,
regulations
and
other
restrictions
on
international
trade
may
impact
our ability
to
access
international markets and impact our ability to plan for
future investments;
•
If
transportation
for
our
coal
becomes
unavailable
or
uneconomical
for
our
customers,
our
ability
to
sell
coal could suffer;
•
Take-or-pay
arrangements within the coal industry could unfavorably
affect our profitability
;
•
A
decrease
in
the
availability
or
increase
in
costs
of
key
supplies,
capital
equipment,
commodities
and
purchased components, such as diesel
fuel, steel, explosives and
tires could materially and
adversely affect
our financial condition and results of operations
;
•
Defects
in
title
or
loss
of
any
leasehold
interests
in
our
properties
could
limit
our
ability
to
mine
these
properties or result in significant unanticipated costs;
•
A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity
;
•
Risks
inherent
to
mining
operations
could
impact
the
amount
of coal
produced,
cause
delay
or suspend
coal deliveries, or increase the cost of operating our business;
•
Our
long-term
success
depends
upon
our
ability
to
continue
discovering,
or
acquiring
and
developing
assets containing, coal reserves that are economically
recoverable
;
•
We
rely
on
estimates
of
our
recoverable
resources
and
reserves,
which
are
complex
due
to
geological
characteristics of the properties and the number of
assumptions made
;
•
Our profitability could be affected adversely
by the failure of
suppliers and/or outside contractors to perform;
•
Our
inability
to
replace
or
repair
damaged
or
destroyed
equipment
or
facilities
in
a
timely
manner
could
materially and adversely affect our financial condition and results
of operations;
•
Our
ability
to
operate
effectively
could
be
impaired
if
we
lose
key
personnel
or
fail
to
attract
qualified
personnel;
•
We may not have adequate insurance coverage
for some business risks
;
•
Cybersecurity
incidents,
attacks
and
other
similar
crises
or
disruptions
could
interrupt
or
disrupt
our
information technology
systems,
or those
of our
third-party
business
partners,
which could,
among other
things, negatively affect our business, financial condition
and results of operations;
Coronado Global Resources Inc. Form 10-K December 31,
2024
39
•
The
loss
of,
or
significant
reduction
in,
purchases
by
our
largest
customers
could
adversely
affect
our
revenues;
•
Our existing
and future
indebtedness
may limit
cash
flow available
to invest
in the
ongoing
needs of
our
businesses,
which could
prevent
us from
fulfilling
our
obligations under
our senior
secured
notes, senior
secured asset-based
revolving credit agreement
in an initial
aggregate principal
amount of $150.0
million,
or the
ABL Facility,
and other
debt, and
we may
be forced
to take
other actions
to satisfy
our obligations
under our debt, which may not be successful;
•
We
adjust
our
capital
structure
from
time
to
time
and
may
need
to
increase
our
debt
leverage,
which
would make us more sensitive to the effects of economic
downturns;
•
Our business
may require
substantial ongoing
capital
expenditures,
and
we may
not have
access
to the
capital required to reach full productive capacity at our mines;
•
Risks
related
to
our
investment
in
WICET
may
adversely
affect
our
financial
condition
and
results
of
operations;
•
Risks related to
the Supply
Deed with Stanwell
may adversely
affect our financial
condition and results
of
operations;
•
We could be adversely affected if we fail to appropriately
provide financial assurances for our obligations;
•
Mine closures
entail substantial
costs. If
we prematurely
close one
or more
of our
mines, our
operations
and financial performance would likely be adversely affected;
•
If
the
assumptions
underlying
our
provision
for
reclamation
and
mine
closure
obligations
prove
to
be
inaccurate, we could be required to expend greater amounts
than anticipated;
•
We
are
subject
to
extensive
health
and
safety
laws
and
regulations
that
could
have
a
material
adverse
effect on our reputation and financial condition and results
of operations;
•
We could be negatively affected if we fail to maintain
satisfactory labor relations;
•
Our
operations
may
impact
the
environment
or
cause
exposure
to
hazardous
substances,
which
could
result in material liabilities to us; and
•
We are subject to extensive
forms of taxation, which impose
significant costs on us,
and future regulations
and developments could increase those costs or limit
our ability to produce coal competitively.
Sustainability Risks
Concerns
about
the
environmental
impacts
of
coal
combustion,
including
possible
impacts
on
global
climate
issues,
are
resulting
in
increased
regulation
of
coal
combustion
and
coal
mining
in
many
jurisdictions, which could adversely impact our financial
condition or results of operations.
Global concerns
about climate
change continues
to attract
considerable attention,
particularly in
relation to
the
coal industry. Emissions from coal
consumption, both directly and
indirectly, and emissions from coal
mining itself
are subject to pending and proposed regulation as part of initiatives to address global climate change. A number
of
countries,
including
Australia
and
the
United
States,
have
already
introduced,
or
are
contemplating
the
introduction of, regulatory responses to GHGs, including the
extraction and combustion of fossil fuels, to
address
the impacts of climate change.
There are three primary sources of GHGs associated with the coal industry.
First, the end use of our coal by our
customers
in
coal-fired
electricity
generation,
coke
plants,
and
steelmaking.
Second,
combustion
of
fuel
by
equipment used in
coal production and
to transport our
coal to
our customers. Third,
coal mining itself
can release
methane, which is considered to
be a more potent
GHG than carbon dioxide, directly into
the atmosphere. These
emissions
from
coal
consumption,
transportation
and
production
are
subject
to
active,
pending
and
proposed
regulation, in the jurisdictions in which we operate as
part of initiatives to address global climate change.
As
a
result,
numerous
proposals
have
been
made
and
are
likely
to
continue
to
be
made
at
the
international,
national, regional and state levels of government to monitor
,
limit and reduce emissions of GHGs.
The Australian Federal Government
’s Safeguard Mechanism
is a legislative framework
to incentivize emissions
reductions,
through
declining
emissions
limits,
called
baselines,
predictably
and
gradually
on
a
trajectory
consistent with
achieving the
Government’s emissions
reduction target
of 43%
below 2005
levels by
2030 and
net zero
by 2050.
The legislative
framework includes
credits to
provide an
incentive to
companies to
go below
their baselines.
Coronado Global Resources Inc. Form 10-K December 31,
2024
40
The
Australian
Federal
Government’s
Safeguard
Mechanism
applies
to
industrial
facilities
emitting
more
than
100,000
tons
of
carbon
dioxide
equivalent
per
year,
including
in
electricity,
mining,
oil
and
gas
production,
manufacturing, transport and waste facilities.
In
accordance
with
the
Safeguard
Mechanism,
Curragh
has
established
a
production-adjusted
(intensity)
baseline
for
covered
emissions
(Scope
1).
The
Currah
emissions
intensity
determination,
or
EID,
has
been
calculated and approved by the Clean
Energy Regulator as EID = 0.0482 tCO2e
-
per ROM Mt. The EID adjusts
over time
with 4.9%
reduction
and change
to an
industry
specific intensity
factor
(0.653 tCO2e-
per ROM
Mt)
year on year. The Company
has submitted an application for a multi-year monitoring period.
Curragh
will
be
required
to
take
action
to
keep
its
net
Scope
1
emissions
at
or
below
the
baseline
through
emissions
reduction,
by
for
example,
purchasing
SMCs
from
another
facility,
captured
by
the
Safeguard
Mechanism, purchasing and surrendering ACCUs, or face
enforcement measures.
The absence of regulatory certainty,
global policy inconsistencies and direct regulatory impacts
(such as carbon
taxes or
other charges)
each have
the potential
to adversely
affect our
operations—either directly
or indirectly,
through
suppliers
and customers.
At present,
we
are principally
focused on
Met
coal production,
which
is not
used
in
connection
with
the
production
of
coal-fired
electricity
generation.
The
market
for
our
coal
may
be
adversely
impacted
if
comprehensive
legislation
or
regulations
focusing
on
GHG
emission
reductions
are
adopted, particularly if they directly or indirectly impact
the Met coal industry. The potential financial impact on us
of such future legislation or regulations will
depend upon the degree to which any such
legislation or regulations
force us or our customers to
diminish reliance on coal. That, in
turn, will depend on a number
of factors, including
the specific
requirements imposed
by any
such legislation
or regulations
and the
time periods
over which
such
legislation
or
regulations
would
be
phased
in.
Collectively,
these
initiatives
and
developments
could
result
in
higher electricity costs to us
or our customers or lower
the demand for coal used
in electricity generation, which
could adversely impact our business.
We face risks from both the
global transition to a net-zero emissions economy and
the potential physical
impacts of climate change.
We face risks from both the global transition to
a net-zero emissions economy and the potential physical impacts
of climate change.
Such risks
may involve financial,
policy,
legal, technological,
reputational and
other impacts
as we meet various mitigation and adaptation requirements.
The transition to a net-zero emissions economy is driven by
many factors, including, but not limited to, legislative
and regulatory rulemaking processes, campaigns undertaken by non-governmental organizations to minimize or
eliminate
the
use
of
coal,
and
the
sustainability-related
policies
of
financial
institutions
and
other
private
companies. We have experienced, and may in the future experience, negative
effects on its results of operations
due
to
the
following
specific
risks
as
a
result
of
such
factors:
electricity
generators
switching
from
coal
to
alternative fuels,
when feasible;
increased costs
associated with
regulatory compliance;
unfavorable impact
of
regulatory compliance
on supply and
demand fundamentals,
such as limitations
on financing or
construction of
new
mining
operations;
unfavorable
costs
of
capital
and
access
to
financial
markets
and
products
due
to
the
policies of
financial institutions;
disruption to
operations
or markets
due to
anti-coal activism
and litigation;
and
reputational damage associated with involvement in GHG emissions.
We and
our customers
may also
have to
invest in
carbon-capture, usage
and storage
technologies in
order to
burn thermal
coal
and
comply
with
future
GHG
emission
standards.
The
potential
direct
and
indirect
financial
impact on us from future laws, regulations, policies and
technology developments may depend upon the degree
to which
any such
laws, regulations
and developments
force the
market and
customers to
reduce
reliance on
coal as a fuel source. Such developments could result in adverse impacts
on our financial condition or results of
operations. See Item 1. “Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters—United
States.”
With respect to
the potential
or actual physical
impacts of climate
change, we
have experienced,
or may in
the
future experience,
negative effects
on our results
of operations
due to the
following specific
risks as
a result of
such factors: disruptions
to production
and transportation,
including as
a result of
extreme wet weather
events;
disruption
to
water
supplies
vital
to
mining
operations;
and
damage
to
our,
our
customers’
or
our
suppliers’
equipment, or third-party
infrastructure, resulting
from adverse weather
conditions or
changes in environmental
trends and conditions.
Such risks from both the global transition to a net-zero emissions economy and the potential physical impacts
of
climate change could result in adverse impacts on our
financial condition or results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
41
In
times
of
drought
and/or
shortage
of
available
water,
our
operations
and
production,
particularly
at
Curragh, could be negatively impacted if
the regulators impose restrictions on our
water offtake licenses
that are required for water used in the CPPs.
In Queensland,
all rights
to the
use, control,
and flow
of water
are vested
in the
state and
regulated under
the
Water
Act
2000
(Qld).
Water
allocations
made
under
this
legislation
are
managed
by
operators,
such
as
SunWater Ltd, who administer their supply
through designated schemes.
For our
Curragh
Mine, we
have
secured
the
required
water
allocations
from SunWater
Ltd and
formalised
delivery
arrangements
through
infrastructure
agreements,
including
channel,
pipeline,
and
river
supply
agreements.
The amount
of water
that is
available to
be taken
under a
water entitlement
will vary
from year
to year
and is
determined by
water sharing rules
of the
relevant catchment area.
These rules
will, for
example, state
a procedure
for water supply scheme holders to calculate
the water available to an allocation holder,
based on available and
predicted supply.
In situations
of severely
constrained supply
(such as during
a drought),
supply contracts
with
the scheme operator generally provide for a
reduced apportionment, with certain uses (e.g., domestic use) being
given higher
priority.
It is
possible that
during times
of drought
our water
offtake entitlements
in Australia
could
be reduced. If
our water offtake
entitlement is reduced,
our operations would
have to recycle
more of the
water
collected in
on-site dams
and former
mining pits,
from rainfall
and dewatering
activities, for
use in
the Curragh
CPP.
This may
impact our
ability to
maintain current
production levels
without incurring
additional costs,
which
could adversely impact our financial condition and results of
operations.
Economic, Competitive and Industry Risks
Our
business
may
be
materially
and
adversely
affected
by
the
impact
on
the
global
economy
due
to,
among
other
events,
significant
geopolitical
tensions,
including
ongoing
civil
unrest
or
wars,
or
pandemics.
Geopolitical tensions, including ongoing civil unrest and wars, and global
pandemics or widespread public health
concerns can have
a significant impact
on global markets,
including influencing both
the supply and
demand of
coal we sell into the export market and the cost or availability
of supplies we consume in producing our coal.
For
example,
global
markets
are
continuing
to
experience
volatility
and
disruption
with
current
geopolitical
tensions and
the military
invasion of
Ukraine by
Russia. This
military conflict
has led
to ongoing
sanctions and
other
penalties
being
levied
by
the
United
States,
the
European
Union
and
other
countries
against
Russia,
including expansive bans on imports and exports of products
to and from Russia.
In
addition,
international,
federal,
state
and
local
public
health
and
governmental
authorities’
mandates
in
response to global
pandemics could require
forced shutdowns
of our mines
and other facilities
in Australia
and
the
U.S.
for
extended
periods,
restrict
movement
and
the
implementation
of
social
distancing
protocols
and
restrict travelling
overseas or
across
borders (including
interstate), affecting
a number
of our
normal business
practices
and
operations.
These
conflicts
or
pandemics
could
cause
disruptions
to
mining
operations,
manufacturing
operations
and
supply
chains
around
the
world.
The
extent
and
duration
of
such
conflicts
or
pandemics could lead to market disruptions,
including significant volatility in commodity
prices, such as the coal
we sell and
diesel fuel we
purchase, instability in
the financial markets,
higher inflation, supply
chain interruptions,
political and social instability as well as an increase in
cyberattacks and espionage.
Our
profitability
depends
upon
the
prices we
receive
for our
coal.
Prices
for
coal are
volatile
and
can
fluctuate widely based upon a number of factors beyond
our control.
We generate
revenue from
the sale
of coal
and our
financial
results
are materially
impacted by
the prices
we
receive. Prices and
quantities under Met
coal sales contracts
with North American
customers are generally
based
on
expectations
of
the
next
year’s
coal
prices
at
the
time
the
contract
is
entered
into,
renewed,
extended
or
re-opened. Pricing in the global seaborne market is typically
set on a rolling quarterly average benchmark price.
Sales by our
U.S. Operations to the
export market are
typically priced with reference
to a benchmark
index. Sales
by our Australian Operations have typically been contracted on an annual basis and are priced with reference
to
benchmark indices or bilaterally
negotiated term prices
and spot indices. As
a result, a significant
portion of our
revenue is
exposed to
movements in
coal prices
and any
weakening in
Met or
thermal coal
prices would
have
an adverse impact on our financial condition and results
of operations.
The expectation of future prices for coal depends upon many factors beyond our
control, including the following:
•
the current market price of coal;
Coronado Global Resources Inc. Form 10-K December 31,
2024
42
•
overall domestic and global economic conditions,
including inflationary conditions and the supply
of and
demand for domestic and foreign coal, coke and steel;
•
the consumption pattern of industrial consumers, electricity generators
and residential users;
•
adverse weather conditions in
our markets that
affect our ability to
produce Met coal
or affect the demand
for thermal coal;
•
competition from other coal suppliers;
•
technological advances affecting the steel production
process and/or energy consumption;
•
the costs, availability and capacity of transportation infrastructure;
and
•
the impact
of domestic
and foreign
governmental policy,
laws and
regulations, including
the imposition
of tariffs, environmental
and climate change
regulations and
other regulations
affecting the
coal mining
industry,
including regulations and measures introduced in response
to global pandemics.
Met coal
continues to
be a
volatile commodity.
The demand
and supply
in the
Met coal
industry changes
from
time
to
time.
There
are
no
assurances
that
oversupply
will
not
occur,
that
demand
will
not
decrease
or
that
overcapacity will not occur, which could cause
declines in the prices of
coal, which could have a
material adverse
effect on our financial condition and results
of operations.
In addition, coal prices are highly
dependent on the outlook for coal consumption in
large Asian economies, such
as China, India, South Korea and Japan,
as well as any changes in government
policy regarding coal or energy
in those
countries.
Seaborne
Met coal
import
demand
can also
be significantly
impacted by
the
availability
of
local coal production, particularly in the leading Met coal import countries of China and India, among others, and
the
competitiveness
of
seaborne
Met
coal
supply,
including
from
the
leading
Met
coal
exporting
countries
of
Australia, the United States, Russia, Canada and Mongolia,
among others.
Demand for our Met coal is significantly dependent on
the steel industry.
The majority of
the coal that
we produce
is Met coal
that is
sold, directly
or indirectly,
to steel
producers and
is
used in BFs for steel production. Met coal, specifically
high-quality HCC and low-volatile PCI, which is produced
at
most
of
our
assets,
has
specific
physical
and
chemical
properties,
which
are
necessary
for
efficient
BF
operation. Therefore, demand for our Met
coal is correlated to demands of
the steel industry. The steel industry’s
demand for Met
coal is influenced
by a number
of factors, including:
the cyclical nature
of that industry’s
business;
general economic
and regulatory
conditions and
demand for
steel; and
the availability,
cost and
preference for
substitutes for steel,
such as aluminum,
composites and
plastics, all of
which may
impact the demand
for steel
products. Similarly,
if new
steelmaking technologies
or practices
are developed
that can
be substituted
for Met
coal in the integrated steel mill process, then demand for
Met coal would be expected to decrease.
Although conventional BF technology has been the most economic large-scale steel production technology for a
number of
years, there
can be
no assurance
that over
the longer
term, competitive
technologies not
reliant on
Met coal would not emerge,
which could reduce the
demand and price premiums
for Met coal. For
example, an
alternative steelmaking
process
utilizing electric
arc furnaces
does not
use coal
as a
manufacturing input
and
accounted
for
28.6%
of
steel
production
in
2023.
In
addition,
a
significant
reduction
in
the
demand
for
steel
products
would
reduce
the
demand
for
Met
coal,
which
could
have
a material
adverse
effect
on
our
financial
condition and results of operations.
We face increasing competition, which could adversely
affect profitability.
Competition
in
the
coal
industry
is
based
on
many
factors,
including,
among
others,
world
supply,
price,
production
capacity,
coal
quality
and
characteristics,
transportation
capability
and
costs,
blending
capability,
brand name
and diversified
operations. We
are subject
to competition
from Met
coal producers
from Australia,
the United States, Russia, Canada, Mongolia and other Met coal producing countries.
Should those competitors
obtain a
competitive advantage in comparison
to us (whether
by way of
an increase in
production capacity, higher
realized
prices,
lower
operating
costs,
export/import
tariffs,
being
comparatively
less
impacted
as
a
result
of
global pandemics or otherwise),
such competitive advantage
may have an adverse
impact on our ability
to sell,
or the
prices at
which we
are able
to sell
coal
products.
In addition,
some of
our competitors
may have
more
production capacity as well as greater financial, marketing, distribution and other resources than we do and may
be subject to less stringent environmental and other regulations
than we are.
Coronado Global Resources Inc. Form 10-K December 31,
2024
43
The
ongoing
consolidation
of
the
global
Met
coal
industry
has
contributed
to
increased
competition,
and
our
competitive position may be adversely impacted by further consolidation among market participants or by further
competitors entering
into and
exiting bankruptcy
proceedings under
a lower
cost structure.
Similarly,
potential
changes to international trade
agreements, trade concessions or other
political and economic arrangements may
benefit coal
producers operating
in countries
other than
the United
States and
Australia. Other
coal producers
may
also
develop
or
acquire
new
projects
to
increase
their
coal
production,
which
may
adversely
impact
our
competitiveness.
Some
of
our
global
competitors
have
significantly
greater
financial
resources,
such
that
increases in their coal production may affect domestic and foreign Met coal supply into the seaborne market and
associated prices and impact our ability to retain or attract Met coal customers. In addition, our ability to ship our
Met
coal
to
non-U.S.
and
non-Australian
customers
depends
on
port
and
transportation
capacity.
Increased
competition
within
the
Met
coal
industry
for
international
sales
could
result
in
us
not
being
able
to
obtain
throughput capacity at port facilities, as well as transport capacity, and could cause the rates for such services to
increase to a point where it is not economically feasible to export
our Met coal.
Increased competition, or a
failure to compete effectively,
in the markets in
which we participate
may result in a
loss of market share and could adversely affect our financial
condition and results of operations.
Evolving tariffs, regulations and other
restrictions on international trade
may impact our ability
to access
international markets and impact our ability to plan for future
investments.
The majority
of the
Met coal
produced by
our Australian
Operations is
exported by
seaborne transportation
to
steel producers
(primarily in
Asia). Met
coal produced
by our
U.S. Operations
is consumed
regionally by
North
American steel
producers or
exported by
seaborne transportation
to steel
producers (primarily
in Asia,
Europe
and South America).
Our access to international markets may be subject to ongoing interruptions and trade barriers
due to policies of
individual
countries,
and
the
actions
of
certain
interest
groups
to
restrict
the
import
or
export
of
certain
commodities. In
addition, the
Met coal
that we
export may
be subject
to tariffs.
For example,
during February
2025 the Chinese government announced tariffs on coal imported from the U.S.
There can be no guarantee that
additional tariffs,
import quota restrictions,
bans or other
trade barriers will
not be imposed
(whether as a
result
of geopolitical
tensions or
for other
reasons) for
our products.
We may
or may
not be
able to
access alternate
markets for
our coal
should interruptions
and trade
barriers occur
in the future,
and we
may be
unable to
pass
the costs of tariffs on to our customers.
An inability
for Met
coal suppliers
to access
international markets
may also
result in
an oversupply
of Met coal
and may
result
in a
decrease
in prices
or the
curtailment
of
production,
which
could
have a
material
adverse
effect on our financial
condition and results of
operations. Additionally,
tariffs imposed by the
U.S. on the import
of certain
steel products
may impact
foreign steel
producers to
the extent
their production
is imported
into the
U.S. Future tariffs could also further reduce
imports of steel and increase U.S. Met coal
demand from U.S. steel
producers. This
additional U.S.
Met coal
demand could
be met
by reducing
exports of
Met coal
from our
U.S.
operations and redirecting that volume to domestic consumption.
Restrictions on international trade, including tariffs established by the U.S. and retaliatory tariffs from key trading
partners, may limit international trade
and adversely impact global economic conditions.
We cannot ascertain the
impact, if
any,
that such
restrictions and
tariffs may
have on
demand for
our Met
coal. These
conditions could
result in
continuing uncertainty
regarding our
ability to
access international
markets and
may limit
our ability
to
plan for future investments, which could adversely affect
our financial condition and results of operations.
If transportation for our coal becomes unavailable or uneconomical for our customers,
our ability to sell
coal could suffer.
Our mining operations produce coal, which is transported to customers by a combination of road, rail, barge and
ship.
Coronado Global Resources Inc. Form 10-K December 31,
2024
44
Typically,
we sell coal at the mine
gate and/or loaded into vessels at
the port. While ordinarily our coal
customers
arrange
and
pay
for
transportation
of
coal
from
the
mine
or
port
to
the
point
of
use,
we
have
entered
into
arrangements
with
third
parties
to
gain
access
to
transportation
infrastructure
and
services
where
required,
including road transport organizations, rail carriers and port owners. Where coal is exported or sold other than at
the mine gate, the costs associated with these arrangements represent a significant portion of both the total cost
of supplying
coal to
customers and
of our
production costs.
As a
result, the
cost of
transportation is
not only
a
key factor in our cost base, but also in the purchasing decision of customers. Transportation
costs may increase
and
we
may
not
be
able
to
pass
on
the
full
extent
of
cost
increases
to
our
customers.
For
example,
where
transportation
costs
are
connected
to
market
demand,
costs
may
increase
if
usage
by
us
and
other
market
participants increases. Significant
increases in transport
costs due to factors
such as fluctuations in
the price of
diesel fuel, electricity and demurrage or environmental requirements could make our coal less competitive
when
compared to coal produced from other regions and countries. As the transportation capacity secured
by our port
and rail agreements is based
on assumed production volumes, we may
also have excess transportation capacity
(which, in the
case of take-or-pay
agreements, we may
have to pay
for even if
unused) if our
actual production
volumes are lower
than our estimated production
volumes. Conversely, we may not have
sufficient transportation
capacity if our actual production volumes
exceed our estimated production volumes, if
we are unable to transport
the
full
capacity
due
to
contractual
limitations
or
if
any
deterioration
in
our
relationship
with
brokers
and
intermediaries results
in a
reduction in
the proportion
of coal
purchased FOR
from our
U.S. Operations
(and a
corresponding increase in the proportion of coal purchased FOB).
The delivery
of coal
produced by
our mining
operations
is subject
to potential
disruption and
competition from
other network
users, which
may affect
our ability
to deliver
coal to
our customers
and may
have an
impact on
productivity and profitability.
Such disruptions to transportation services may include,
among others:
•
disruptions due to weather-related problems;
•
key equipment or infrastructure failures;
•
industrial action;
•
rail or port capacity congestion or constraints;
•
commercial disputes;
•
failure to
obtain consents
from third
parties for
access to
rail or
land, or
access being
removed
or not
granted by regulatory authorities;
•
changes in applicable regulations;
•
failure or delay in the construction of new rail or port capacity;
and
•
terrorist attacks, natural disasters, the impact from global pandemics
or other events.
Any
such
disruptions,
or
any
deterioration
in
the
reliability
of
services
provided
by
our
transportation
service
providers, could
impair our
ability to
supply coal
to our
customers, result
in decreased
shipments and
revenue
and adversely affect our results of operations.
Take-or-pay arrangements within the
coal industry could unfavorably affect our profitability.
Our
Australian
Operations
generally
contract
port
and
rail
capacity
via
long-term
take-or-pay
contracts
for
transport, currently with
Aurizon Operations and Pacific
National Pty Ltd,
to and export
from the Port
of Gladstone
via two
main port terminals,
RGTCT and WICET. We may enter
into other take-or-pay
arrangements in the
future.
Where we have entered into take-or-pay contracts, we will generally be required to pay for our
contracted port or
rail capacity, even
if it
is not
utilized by
us or
other shippers. Although
the majority
of our
take-or-pay arrangements
provide security over minimum port and
rail infrastructure availability,
unused port or rail capacity can
arise as a
result
of
varying
unforeseen
circumstances,
including
insufficient
production
from
a
given
mine,
a
mismatch
between the timing of
required port and rail
capacity for a mine,
or an inability to
transfer the used capacity
due
to contractual limitations, such as
required consent of the provider of
the port or rail services,
or because the coal
must emanate from specified
source mines or
be loaded onto trains
at specified load
points. Paying for
unused
transport
capacity
could
materially
and
adversely
affect
our
cost
structures
and
financial
performance.
See
Item 7. “Management’s Discussion and
Analysis of Financial
Condition and Results of
Operations” for a
summary
of our expected future obligations under take-or-pay arrangements
as of December 31, 2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
45
A decrease in
the availability
or increase
in costs of
key supplies, capital
equipment, commodities
and
purchased components,
such as diesel
fuel, steel,
explosives and
tires,
could materially
and adversely
affect our financial condition and results of operations.
Our mining operations require a reliable
supply of large quantities of fuel,
explosives, tires, steel-related products
(including
roof
control
materials),
lubricants
and
electricity.
The
prices
we
pay
for
commodities
are
strongly
impacted by the global
market. In situations where
we have chosen to
concentrate a large portion
of purchases
with one supplier, it has been to take
advantage of cost savings from larger volumes of
purchases and to support
security of supply.
If the cost
of any of
these key supplies
or commodities increase
s
significantly,
or if a
source
for these
supplies
or
mining
equipment
is unable
to
meet
our replacement
demands
our
profitability
could
be
reduced or we could experience a delay or halt in our
production.
Prices for equipment, materials, supplies and employee labor contractor services increased during 2024. Similar
to recent
years, long-term
inflationary pressures
may result
in such
prices continuing
to increase
more quickly
than expected. Inflation increases costs for materials, labor and services, and
we may be unable to secure these
resources on economically acceptable
terms or offset such
costs with increased
revenues, operating efficiencies,
or
cost
savings,
which
may
adversely
impact
our
financial
condition,
results
of
operations,
liquidity,
and
cash
flows.
Our coal production and production costs can be materially and adversely impacted by unexpected shortages or
increases in the costs of consumables, spare parts,
plant and equipment. For example, operation
of the thermal
dryer located at
the CPP at
Buchanan is dependent
upon the delivery
of natural gas
and there is
currently only
one
natural
gas
supplier
in
the
area,
an
affiliate
of
CONSOL
Energy.
Although
we
have
entered
into
a
gas
purchase agreement with CONSOL Energy,
this agreement can be terminated by CONSOL
Energy on 30 days’
notice and any delay
or inability to negotiate
a replacement agreement
would impact our costs
of production as
we would need to change our processing method at Buchanan.
Defects in
title or
loss of
any leasehold
interests in
our properties
could limit
our ability
to mine
these
properties or result in significant unanticipated costs.
In Queensland,
where all
of our
Australian Operations
are carried
out, exploring
or mining
for coal
is unlawful
without a tenement granted by the Queensland
government. The grant and renewal of tenements
are subject to
a regulatory regime and each
tenement is subject to certain
conditions. There is no certainty
that an application
for the grant of a
new tenement or renewal
of one of the
existing Tenements
at Curragh will be
granted at all or
on
satisfactory
terms
or
within
expected
timeframes.
Further,
the
conditions
attached
to
the
Tenements
may
change at the time they are renewed. There is
a risk that we may lose title to
any of our granted Tenements if we
fail to comply with
the Tenement
conditions and other
applicable legislative requirements
(including payment of
State
royalties)
or
if
the
land
that
is
subject
to
the
title
is
required
for
public
purposes.
The
Tenements
have
expiration dates ranging from
May 31, 2023 to July
31, 2044 and, where renewal
is required, there is a
risk that
the Queensland government may change the terms and conditions
of such Tenement
upon renewal.
In
the
United
States,
title
to
a
leased
property
and
mineral
rights
is
generally
secured
prior
to
permitting
and
developing a property. In some cases,
we rely on title information or representations and warranties provided by
our lessors, grantors
or other third
parties. Our right
to mine some
of our reserves
may be adversely
affected if
defects in
title or
boundaries
exist or
if a
lease expires.
Any challenge
to our
title or
leasehold interests
could
delay the exploration and development of the property and could ultimately result in the loss of some
or all of our
interest in the property and, accordingly, require us to reduce our estimated coal
reserves. In addition, if we mine
on property that we do not
own or lease, we could incur
civil damages or liability for
such mining and be subject
to conversion, negligence,
trespass, regulatory sanction
and penalties. Some
leases have minimum
production
requirements or require us
to commence mining operations in
a specified term to
retain the lease. Failure
to meet
those requirements
could result
in losses of
prepaid royalties
and, in some
rare cases,
could result
in a loss
of
the lease itself.
In
the
United
States,
we
predominantly
access
our
mining
properties
through
leases
with
a
range
of
private
landholders.
If
a
default
under
a
lease
for
properties
on
which
we
have
mining
operations
resulted
in
the
termination of the
applicable lease,
we may
have to suspend
mining or significantly
alter the sequence
of such
mining operations, which may adversely affect our
future coal production and future revenues.
To
obtain
leases
or
mining
contracts
to
conduct
our
U.S.
Operations
on
properties
where
defects
exist
or
to
negotiate extensions or amendments
to existing leases, we
may in the future have
to incur unanticipated costs.
In addition, we may
not be able
to successfully negotiate new leases
or mining contracts for
properties containing
additional
reserves
or
maintain
our
leasehold
interests
in
properties
where
we
have
not
commenced
mining
operations during the term of the lease.
Coronado Global Resources Inc. Form 10-K December 31,
2024
46
A defect in our title or the loss of any lease or Tenement
upon expiration of its term, upon a default or otherwise,
could adversely affect our ability to mine the associated
reserves or process the coal we mine.
We may
be unable
to obtain,
renew or
maintain permits necessary
for our
operations, which
would reduce
coal production, cash flows and profitability.
Our performance
and
operations
depend
on, among
other things,
being able
to
obtain on
a timely
basis,
and
maintain,
all
necessary
regulatory
approvals,
including
any
approvals
arising
under
applicable
mining
laws,
environmental regulations and
other laws, for our
current operations, expansion
and growth projects. Examples
of regulatory
approvals that
we must
obtain and
maintain include
mine development
approvals, environmental
permits and, in
Australia, tenure and approvals
relating to native
title and indigenous cultural
heritage. In addition,
our operations depend
on our ability
to obtain and
maintain consents from private
land owners and
good relations
with local communities.
The requirement
to obtain
and maintain
approvals and
address potential
and actual
issues for
former,
existing
and future
mining
projects
is common
to all
companies
in the
coal sector.
However,
there is
no assurance
or
guarantee that we
will obtain,
secure, or be
able to maintain
any or all
of the required
consents, approvals
and
rights necessary to maintain our current
production profile from our existing
operations or to develop our
growth
projects
in a
manner
which
will result
in
profitable
mining
operations
and/or
achieve
our long-term
production
targets. The permitting rules, and
the interpretations of these rules,
are complex, change frequently and
are often
subject to the interpretation of the regulators that
enforce them, all of which may make compliance more
difficult
or impractical,
and may
possibly preclude
the continuance
of ongoing
operations or
the development
of future
mining operations.
Certain laws,
such as
the Surface
Mining Control
and Reclamation
Act, or
SMCRA, require
that certain environm
ental standards
be met
before a
permit is
issued. The
public, including
non-governmental
organizations,
anti-mining
and
other
activist
groups
and
individuals,
have
certain
statutory
rights
to
comment
upon and
submit objections
to requested
permits and
environmental impact
statements. These
comments are
prepared
in
connection
with
applicable
regulatory
processes,
and
the
public
may
otherwise
engage
in
the
permitting process,
including bringing
lawsuits to challenge
the issuance
of permits, the
validity or
adequacy of
environmental impact statements
or performance of
mining activities. In
states where we
operate, applicable laws
and regulations also provide
that a mining permit
or modification can, under
certain circumstances, be
delayed,
refused or revoked if
we or any entity
that owns or controls
or is under common
ownership or control with
us have
unabated
permit
violations
or have
been the
subject
of
permit
or reclamation
bond revocation
or suspension.
Thus, past
or ongoing
violations of
federal and
state mining
laws by
us or
such entity
could provide
a basis
to
revoke existing permits and to
deny the issuance of additional
permits or modification or amendment
of existing
permits. The
permitting required
for coal
mining continues
to be
the subject
of increasingly
stringent regulatory
and
administrative
requirements
and
extensive
activism
and
litigation
by
environmental
groups.
If
this
trend
continues, it could
materially and adversely
affect our
mining operations,
development and expansion
and cost
structures,
the transport
of
coal and
our
customers’
ability
to use
coal
produced
by our
mines, which,
in
turn,
could have a material adverse effect on our financial
condition and results of operation.
In particular,
certain of
our activities
require a
dredge and
fill permit
from the
USACE under
Section 404 of
the
CWA. In
recent years, the
Section 404 permitting
process has
been subject to
increasingly stringent
regulatory
and administrative
requirements
and a
series of
court challenges,
which have
resulted in
increased costs
and
delays in the permitting process. In January 2023, the USACE and
EPA issued a rule
amending the definition of
“waters
of
the
United
States.”
As
a
result
of
the
United
States
Supreme
Court
decision
in
Sackett
v.
EPA
effectively invalidating
parts of the
January 2023 final
rule, the agencies
revised the rule
in August 2023,
which
became effective
in September
2023. The
September
2023 final
rule narrowed
the bodies
of water
subject to
Section 404 permits, providing some
clarity on the scope of the CWA.
Additionally, we may rely on nationwide permits under
the CWA Section 404 program for some
of our operations.
These nationwide permits are issued every
five years, and the 2022 nationwide permit
program was reissued in
January
2021
and
December
2021.
If
we
are
unable
to
use
the
nationwide
permits
and
require
an
individual
permit for certain work, that could delay operations.
If we
are unable
to obtain
and maintain
the approvals,
consents and
rights required
for our
current and
future
operations,
or if
we obtain
approvals subject
to conditions
or limitations,
the
economic
viability of
the relevant
projects may be
adversely affected,
which may in
turn result in
the value of
the relevant assets
being impaired,
which could have a material adverse effect
on our financial condition and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
47
A
shortage
of
skilled
labor
in
the
mining
industry
could
pose
a
risk
to
achieving
improved
labor
productivity.
Efficient coal mining using modern techniques and equipment requires
skilled workers, preferably with at least a
year of experience and proficiency in multiple
mining tasks. Any reduced availability or future
shortage of skilled
labor in the
Australian and U.S.
mining industries could
result in us
having insufficient
personnel to operate
our
business, or expand
production, particularly
in the event
there is an
increase in the
demand for our
coal, which
could adversely affect our financial condition and results
of operations.
Operational and Technology
Risks
Risks inherent to mining operations could impact the amount of coal produced,
cause delay or suspend
coal deliveries, or increase the cost of operating our
business.
Our
mining
operations,
including
exploration,
development,
preparation,
product
handling
and
accessing
transport infrastructure,
may be affected
by various operational
difficulties that
could impact the
amount of coal
produced at our coal mines, cause
delay or suspend coal deliveries, or increase
the cost of mining for a varying
length of time.
Our financial performance
is dependent
on our ability
to sustain or
increase coal production
and
maintain or increase operating margins. Our coal production and production costs are, in
many respects, subject
to conditions and events beyond our control, which could disrupt our operations
and have a significant impact on
our financial results. Adverse operating conditions and
events that we may have experienced in the past
or may
experience in the future include:
•
a failure to achieve the Met coal qualities or quantities
anticipated from exploration activities;
•
variations in
mining and
geological
conditions from
those anticipated,
such as
variations in
coal seam
thickness and quality,
and geotechnical conclusions;
•
operational and technical
difficulties encountered in mining,
including equipment failure,
delays in moving
longwall equipment, drag-lines and other equipment and maintenance
or technical issues;
•
adverse weather conditions
or natural or
man-made disasters, including
hurricanes, cyclones, tornadoes,
floods, droughts, bush
fires, seismic activities,
ground failures, rock
bursts, structural cave-ins
or slides
and other catastrophic events (such as global pandemics);
•
insufficient or unreliable infrastructure, such as power,
water and transport;
•
industrial and
environmental accidents,
such as
releases of
mine-affected water
and diesel
spills (both
of which have affected our Australian Operations
in the past);
•
industrial disputes and labor shortages;
•
mine safety accidents, including fatalities, fires and explosions
from methane and other sources;
•
competition
and
conflicts
with
other
natural
resource
extraction
and
production
activities
within
overlapping operating areas, such as natural gas extraction
or oil and gas development;
•
unexpected shortages, or increases in the costs, of consumables,
spare parts, plant and equipment;
•
cyberattacks or
other cybersecurity
incidents that
could disrupt
systems we
rely on
for our
operations;
and
•
other security breaches or terrorist acts.
If any
of the
foregoing conditions
or events
occurs and
is not
mitigated or
excusable as
a force
majeure event
under
our
coal
sales
contracts,
any
resulting
failure
on
our
part
to
deliver
coal
to
the
purchaser
under
such
contracts
could
result
in
economic
penalties,
demurrage
costs,
suspension
or
cancellation
of
shipments
or
ultimately termination
of such
contracts, which
could
have a
material adverse
effect
on our
financial condition
and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
48
Our U.S.
Operations are
concentrated in
a small
number of
mines in
the CAPP
and our
Australian Operations
include
two
open
cut
mines
(Curragh
North
and
Curragh
South)
and
one
underground
mine
(Mammoth
Underground) in the Bowen
Basin of Australia. As
a result, the effects
of any of these
conditions or events
may
be
exacerbated
and
may
have
a
disproportionate
impact
on
our
results
of
operations
and
assets.
Any
such
operational
conditions
or
events
could
also
result
in
disruption
to
key
infrastructure
(including
infrastructure
located at or serving our mining activities, as well as the infrastructure that
supports freight and logistics). These
conditions and events could
also result in the
partial or complete closure
of particular railways, ports or
significant
inland waterways
or sea
passages, potentially
resulting in
higher costs,
congestion, delays
or cancellations
on
some
transport
routes.
Any
of
these
conditions
or
events
could
adversely
impact
our
business
and
results
of
operations.
Our long-term
success depends
upon our
ability to
continue discovering,
or acquiring
and developing
assets containing, coal reserves that are economically
recoverable.
Our recoverable reserves decline
as we produce coal.
Our long-term outlook depends
on our ability to maintain
a commercially viable portfolio of coal reserves that are economically recoverable. Failure to acquire
or discover
new coal reserves or
develop new assets could
negatively affect our financial condition and
results of operations.
Exploration activity may occur adjacent to established
assets and in new regions. These activities
may increase
land tenure,
infrastructure
and related
political risks.
Failure to
discover or
acquire new
coal reserves,
replace
coal reserves or develop new assets or operations in sufficient quantities to maintain or grow the
current level of
reserves could negatively affect our financial condition
and results of operations.
Potential changes to our portfolio of assets through acquisitions and divestments may have an adverse effect on
future results
of operations
and financial
condition. From
time to
time, we
may add
assets to,
or divest
assets
from, our portfolio. There are a number of risks associated with historical
and future acquisitions or divestments,
including, among others:
•
adverse market
reaction to
such acquisitions
and divestments
or the
timing or
terms on
which acquisitions
and divestments are made;
•
imposition of adverse regulatory conditions and obligations;
•
geopolitical risks;
•
commercial objectives not being achieved as expected;
•
unforeseen liabilities arising from changes to the portfolio;
•
sales revenues and operational performance not meeting
expectations;
•
anticipated synergies or cost savings being delayed or not
being achieved; and
•
inability to retain key staff and transaction-related costs
being more than anticipated.
These factors could materially and adversely affect
our financial condition and results of operations.
We rely
on estimates
of our
recoverable resources
and reserves,
which are
complex due
to geological
characteristics of the properties and the number of
assumptions made.
We rely on estimates of our recoverable resources and reserves.
In this Annual Report on Form 10-K, we report
our estimated resources
and reserves in
accordance with
subpart 1300
of Regulation S-K
under the Exchange
Act. See Item
2. “Properties.”
Subpart 1300 of
Regulation S-K requires
us to disclose
our mineral resources,
in
addition to
our mineral reserves.
In addition,
as an
ASX-listed company, our ASX disclosures
follow the Australian
Code
for
Reporting
of
Exploration
Results,
Mineral
Resources
and
Ore
Reserves
2012,
or
the
JORC
Code.
Accordingly,
our estimates
of resources
and reserves
in this
Annual Report
on Form
10-K and
in other
reports
that
we
are
required
to
file
with
the
SEC
may
be
different
than
our
estimates
of
resources
and
reserves
as
reported in our ASX disclosures.
Coronado Global Resources Inc. Form 10-K December 31,
2024
49
Coal
is
economically
recoverable
when
the
price
at
which
it
can
be
sold
exceeds
the
costs
and
expenses
of
mining
and
selling
the
coal.
The
costs
and
expenses
of
mining
and
selling
the
coal
are
determined
on
a
mine-by-mine basis, and as a result, the price at which our coal is economically recoverable varies based on the
mine. We
base our resource
and reserve
information on geologic
data, coal ownership
information and current
and
proposed
mine
plans,
and
mining
cost
assumptions
may
be
affected
by
changes
in
mine
planning
or
scheduling over
time. There
are numerous
uncertainties
inherent in
estimating
quantities
and qualities
of coal
and
costs
to
mine
recoverable
reserves,
including
many
factors
beyond
our
control.
There
are
inherent
uncertainties and risks associated with such estimates, includi
ng:
•
geologic and mining conditions,
which may not be
fully identified by available
exploration data and may
differ from our experience and assumptions in areas
we currently mine;
•
current
and
future
market
prices
for
coal,
contractual
arrangements,
operating
costs
and
capital
expenditures;
•
severance and
excise
taxes,
unexpected
governmental
taxes, royalties
,
stamp
duty and
development
and reclamation costs;
•
future mining technology improvements;
•
the effects of regulation by governmental agencies;
•
the ability to obtain, maintain and renew all required permits;
•
employee health and safety; and
•
historical production from the area compared with production from
other producing areas.
Except
for
that
portion
of
mineral
resources
classified
as
mineral
reserves,
mineral
resources
do
not
have
demonstrated economic value. Even
if a mineral
resource exists, there can
be no assurance that
any part of
such
mineral resource will ever be converted to mineral reserves.
In addition, estimates of coal resources and reserves are revised based on actual production experience, and/or
new exploration
information and therefore
the estimates
of coal resources
and reserves
are subject to
change.
Should we
encounter geological
conditions or
qualities different
from those
predicted by
past drilling,
sampling
and similar examinations, estimates
of coal resources and reserves
may have to be adjusted
and mining plans,
coal processing and infrastructure may have to be
altered in a way that might adversely affect our operations. As
a result, our estimates may not accurately reflect our actual future coal
resources and reserves.
As
a
result,
the
quantity
and
quality
of
the
coal
that
we
recover
may
be
less
than
the
resource
and
reserve
estimates included in
this Annual Report
on Form 10-K.
If our actual coal
resources and reserves
are less than
current estimates,
or the
rate at
which they
are recovered
is less
than estimated
or results
in higher
than estimated
costs, our financial condition and results of operations
may be materially and adversely affected.
Our
profitability
could
be
affected
adversely
by
the
failure
of
suppliers
and/or
outside
contractors
to
perform.
We use
contractors and
other third
parties for
exploration, mining
and other
services generally,
and are
reliant
on several
third parties
for the
success of
our current
operations and
the development
of our
growth projects.
While
this
is normal
for
the
mining
industry,
problems
caused
by third
parties
may arise,
which
may
have
an
impact on our performance and operations. In particular, the majority of workers at our
Australian Operations are
employed by contractors, including Thiess Pty Ltd and
Golding Contractors Pty Ltd.
Operations
at
our
mines
may
be
interrupted
for
an
extended
period
in
the
event
that
we
lose
any
of
our
key
contractors (because their
contract is terminated or
expires) and are required
to replace them. There
can be no
assurance that skilled third parties
or contractors will continue
to be available at reasonable
rates. As we do not
have the
same control
over contractors
as we
do over
employees, we
are also
exposed to
risks related
to the
quality or
continuation of
the services
of, and
the equipment
and supplies
used by,
our contractors,
as well
as
risks related
to the
compliance of our
contractors with environmental
and health and
safety legislation and
internal
policies, standards and
processes. Any failure
by our key
contractors to comply
with their obligations
under our
operating agreements with
them (whether as a
result of financial, safety
or operational difficulties
or otherwise),
any
termination
or
breach
of
our
operating
agreements
by
our
contractors,
any
protracted
dispute
with
a
contractor, any inability to perform due to global pandemics or other health concerns,
any material labor dispute
between
our
contractors
and
their
employees
or
any
major
labor
action
by
those
employees
against
our
contractors, could have a material adverse effect
on our financial condition and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
50
Further, in
periods of high
commodity prices, demand
for contractors may
exceed supply resulting
in increased
costs or lack
of availability
of key contractors.
Disruptions of
operations or
increased costs also
can occur as
a
result of disputes with contractors or a shortage
of contractors with particular capabilities. To
the extent that any
of the foregoing risks were to materialize, our operating
results and cash flows could be adversely affected.
Our inability to replace or
repair damaged or destroyed
equipment or facilities in
a timely manner could
materially and adversely affect our financial condition
and results of operations.
We depend on several
major pieces of mining
equipment and facilities to
produce and transport coal,
including,
but
not
limited
to,
longwall
mining
systems,
continuous
miners,
draglines,
dozers,
excavators,
shovels,
haul
trucks, conveyors,
CPPs and
rail loading
and blending
facilities. Obtaining
and repairing
these major
pieces of
equipment often involves long lead
times. If any of these
pieces of equipment and facilities suffers major
damage
or is destroyed by fire,
abnormal wear and tear,
flooding, incorrect operation or
otherwise, we may be unable
to
replace or repair them in a timely manner or at a reasonable cost, which would impact our ability
to produce and
transport
coal
and
could
materially
and
adversely
affect
our financial
condition
and
results
of
operations.
Our
ability to replace or
repair damaged or destroyed
equipment or facilities
may also be dependent
on suppliers or
manufacturers remaining operational and having the relevant equipment, work force or services available for us.
Suppliers
and
manufacturers
may be
unable
to
provide
such
equipment,
work
force
or service
for
a
range
of
reasons, including but not limited to their business suffering
adverse effects as a result of global pandemics.
Additionally, regulatory agencies sometimes make changes with regard to requirements for pieces of
equipment.
Such changes can impose costs on us and can cause delays if manufacturers and suppliers are unable to make
the required changes in compliance with mandated deadlines.
Our
ability to
operate effectively
could
be impaired
if we
lose key
personnel
or fail
to
attract qualified
personnel.
We manage our business with a number of key personnel, the
loss of whom could affect our future performance,
absent the completion of an orderly
transition. In addition, we believe that
our future success will depend on
our
continued
ability
to
attract
and
retain
highly
skilled
and
qualified
personnel
in
tight
labor
markets,
particularly
personnel
with
mining
experience.
While
we
have
entered
into
employment
contracts
with
a
number
of
key
personnel in Australia and the United States,
we cannot provide assurance that key personnel will continue
to be
employed or that we will be
able to attract and retain qualified
personnel in the future. Failure
to retain or attract
key personnel could have
a material adverse effect on
our business, financial condition and
results of operations.
We may not have adequate insurance coverage
for some business risks.
We have insurance coverage for certain
operating risks that provide limited
coverage for some potential liabilities
associated with our
business. As
a result of
market conditions, premiums
and deductibles for
certain insurance
policies
can
increase
substantially,
and
in
some
instances,
certain
insurance
may
become
unavailable
or
available only for reduced amounts of coverage. As a result, we may not be able
to renew our existing insurance
policies or
procure
other
desirable
insurance
on commercially
reasonable
terms,
if at
all. In
addition,
we
may
become subject
to liability
(including in
relation to
pollution, occupational
illnesses
or other
hazards),
or suffer
loss resulting from
business interruption, for
which we are
not insured (or
are not sufficiently
insured) or cannot
insure, including liabilities in respect of past activities.
Should we suffer a
major uninsured loss, future
financial performance could be
materially and adversely affected.
In addition, insurance
may not continue
to be available
at economically acceptable
premiums or coverage
may
be reduced. As a result, the
insurance coverage may not cover
the full scope and extent of claims
against us or
losses we
may incur.
The occurrence
of a
significant
adverse event
not fully
or partially
covered by
insurance
could have a material adverse effect on our financial
condition and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
51
Cybersecurity
incidents,
attacks
and
other
similar
crises
or
disruptions
could
interrupt
or
disrupt
our
information technology systems,
or those
of our
third-party business partners,
which could, among
other
things, negatively affect our business, financial
condition and results of operations.
Our business may be impacted by cybersecurity incidents, cyberattacks, system failures and other cybersecurity
threats to our
information networks
and systems,
as well as
those of our
third-party business
partners, and
the
information stored on those
networks and systems.
Strategic targets, such
as energy-related assets,
may be at
greater risk
of cybersecurity
incidents, attacks,
and threats
than other
targets in
the United
States or
Australia.
Cybersecurity incidents and similar attacks vary in
their form and can include
the deployment of harmful malware
or ransomware, denial-of-services attacks, and other attacks,
which may affect business continuity and threaten
the
availability,
confidentiality
and
integrity
of
our
systems
and
information.
Cybersecurity
incidents
can
also
include fraud, phishing
or other social
engineering attempts or
other methods to
cause confidential information,
payments,
account
access
or
access
credentials,
or
other
data
to
be
transmitted
to
an
unintended
recipient.
Cybersecurity
threat
actors
also
may
attempt
to
exploit
vulnerabilities
through
software
including
software
commonly
used
by
companies
in
cloud-based
services
and
bundled
software.
We
have
experienced
cybersecurity
threats
and
cybersecurity
incidents
that
have
not
materially
affected
our
strategy,
results
of
operations or financial condition.
Although we maintain a cyber insurance policy, there is no guarantee that such
coverage
will
be
sufficient
to
address
costs,
liabilities
and
damages
we
may
incur
in
connection
with
a
cybersecurity incident
or that
such coverage
will continue
to be
available on
commercially reasonable
terms or
at all.
It is
possible that
any such
occurrences could
have a
material adverse
effect
on our
business, financial
condition and results of operations.
In addition,
a disruption
in, or
failure of,
our
information
technology,
or IT,
systems
or those
of
our third-party
business partners, and the information store on those
networks and systems could adversely affect our business
operations and financial
performance. We
rely on the
accuracy,
capacity and security
of our IT
systems for
the
operations of many of our
business processes and to
comply with regulatory,
legal and tax requirements.
While
we
maintain
some
of
our
critical
IT
systems,
we
are
also
dependent
on
third
parties
to
provide
important
IT
services
relating
to,
among
other
things,
human
resources,
electronic
communications
and
certain
finance
functions. Despite the security measures
that we have implemented, including
those related to cybersecurity, our
systems or third-party systems on which we rely could be breached,
disrupted or damaged by computer viruses,
natural or manmade incidents,
accidents, or failures, or
disasters or unauthorized physical
or electronic access.
Though we have
controls in
place, we cannot
provide assurance
that cybersecurity
incident or similar
attack or
failure will not occur.
Furthermore, we may
have little or
no oversight with
respect to security
measures employed by
third-party service
providers, which may ultimately prove to be
ineffective at countering threats.
We do not have any indication that
any risks from cybersecurity threats have had, or are reasonably likely to have, a material effect on our business
strategy, results
of operations or financial condition.
Failures
of
our
IT
systems,
whether
caused
maliciously
or
inadvertently,
may
result
in
the
disruption
of
our
business processes, the unauthorized release of sensitive, confidential or otherwise protected information or the
corruption of data, which could
adversely affect our business
operations and financial performance.
We may be
required to
incur significant
costs to
protect against
and remediate
the damage
caused by
such disruptions
or
system failures
in the future.
A cybersecurity
incident relating
to our
information or
systems or
that of our
third-
party business partners,
or any failure
by us or
our third-party
business partners to
effectively address,
enforce
and maintain our information
technology infrastructure and cybersecurity
requirements may result
in substantial
harm
to
our
business
strategy,
results
of
operations
and
financial
condition,
including
major
disruptions
to
business operations,
loss of
intellectual property,
release of
confidential information,
alteration or
corruption of
data or systems, costs related to remediation or the payment of ransom, and litigation including individual claims
or consumer
class
actions, commercial
litigation,
administrative,
and civil
or criminal
investigations
or actions,
regulatory intervention and sanctions or fines, investigation
and remediation costs and negative publicity.
Financial and Strategic Risks
The loss
of, or
significant reduction
in, purchases
by our
largest customers
could adversely
affect our
revenues.
A significant portion of the sales of our Met coal is to
customers with whom we have had long-term relationships.
The success of our business depends on our
ability to retain our current customers, renew our existing customer
contracts
and
solicit
new
customers.
Our
ability
to
do
so
generally
depends
on
a
variety
of
factors,
including
having our mines
operational, having the type
and quantity of
coal available, the quality
and price of
our products,
our ability to market these products effectively, our ability to deliver on a timely basis and the level of competition
that we face.
Coronado Global Resources Inc. Form 10-K December 31,
2024
52
In addition, our
sales contracts
generally contain
provisions that
allow customers
to suspend or
terminate if
we
commit a material breach of the terms of the contract, a change in law
restricts or prohibits a party from carrying
out its
material obligations
under the
contract or
a material
adverse change
occurs in
our financial
standing or
creditworthiness. If customers suspend
or terminate existing contracts,
or otherwise refuse to accept
shipments
of our Met
coal for which
they have an
existing contractual
obligation, our revenues
will decrease, and
we may
have to reduce production at our mines until our customers’
contractual obligations are honored.
For the
year ended
December 31,
2024, our
top ten
customers comprised
73.7% of
our total
revenue and
our
top five customers comprised
54.6% of our total revenue. For the year ended December
31, 2024, sales to Tata
Steel and
JFE represented
20.1% and
11.4%,
respectively,
of our
total revenue.
The majority
of our
sales are
made on
a spot
basis or
under contracts
with terms
of typically
one year. The
failure to
obtain additional
customers
or
the
loss
of
all
or
a
portion
of
the
revenues
attributable
to
any
customer
as
a
result
of
competition,
creditworthiness,
inability
to
negotiate
extensions,
replacement
of
contracts
or
the
impact
of
the
global
pandemics, or otherwise, may adversely affect our
business, financial condition and results of operations.
If our ability
to collect
payments from
customers is
impaired, our
revenues and
operating profits
could
suffer.
Our
ability
to
receive
payment
for
coal
sold
and
delivered
will
depend
on
the
continued
creditworthiness
and
contractual performance of our customers and counterparties. For certain customers, we require the provision of
a letter of credit as
security for payment. The inability of key customers
to procure letters of credit (due
to general
economic conditions or the
specific circumstances of the
customer) may restrict our
ability to contract with such
customers
or
result
in
fewer
sales
contracts
being
executed,
which
could
materially
and
adversely
affect
our
financial condition and
results of operations.
For certain of
our large
customers in Australia
who have
not provided
letters of credit or
other forms
of security,
we maintain an insurance
policy to cover any
failure in payment. This
insurance coverage, however,
may not cover the full scope
and extent of losses we
may incur as the result
of a
payment default or otherwise.
If a customer
does not
pay amounts
due in
a timely
manner,
we may
decide to sell
the customer’s coal
on the
spot market, which may be
at prices lower than the contracted
price, or we may be unable
to sell the coal at all.
If our customers’ or counterparties’ creditworthiness deteriorates,
our business could be adversely affected.
Changes in credit
ratings issued by
nationally recognized statistical
rating organizations could
adversely
affect our cost of financing and the market price
of our securities.
Credit rating agencies
could downgrade our ratings
due to factors specific
to our business,
a prolonged cyclical
downturn in the
mining industry or
macroeconomic trends
(such as global
or regional recessions)
and trends in
credit and
capital markets
more generally.
Any decline
in our credit
ratings would
likely result
in an
increase to
our cost of financing, limit our access to the capital markets, significantly harm our financial condition and results
of operations,
hinder
our ability
to refinance
existing
indebtedness
on
acceptable
terms
and
have an
adverse
effect on the market price of our securities.
Our existing and future indebtedness may limit cash flow available to invest in the ongoing needs of our
businesses, which could
prevent us
from fulfilling our
obligations under our
senior secured notes,
senior
secured asset-based revolving
credit agreement in
an initial
aggregate principal amount
of $150.0
million,
or the ABL Facility,
and other debt, and we may be forced to take other actions to satisfy our obligations
under our debt, which may not be successful.
As
of
December
31,
2024,
we
had
$400.0
million
aggregate
principal
amount
of
our
senior
secured
notes
outstanding due
2029. As
of December
31, 2024,
the
letter of
credit sublimit
had
been partially
used to
issue
$21.4 million
of bank
guarantees
on behalf
of the
Company
and no
amounts
were drawn
under
the revolving
credit sublimit of the
ABL Facility.
As of December
31, 2024, the
available borrowing capacity
under this facility
was $128.6 million.
We dedicate a
portion of our
cash flow from
operations to the
payment of debt
service, reducing
the availability
of our cash flow
to fund capital expenditures,
acquisitions or strategic
development initiatives and
other general
corporate purposes. Our ability to make scheduled payments on or to refinance our debt obligations depends on
our ability to
generate cash in
the future and our
financial condition and operating
performance, which are subject
to prevailing economic and competitive
conditions and to certain
financial, business and other factors
beyond our
control. There can be no assurance that
we will maintain a level of cash flows
from operating activities sufficient
to permit us to pay the principal, premium, if any,
and interest on our debt. In addition, any failure to comply
with
covenants in the
instruments governing
our debt could
result in an
event of default
that, if not
cured or
waived,
would have a material adverse effect on us.
Coronado Global Resources Inc. Form 10-K December 31,
2024
53
For
example,
on
December
30,
2024,
we
completed
an
agreement,
or
the
Waiver
Agreement,
with
the
Administrative Agent (as defined below)
under the ABL Facility to
temporarily waive the Company’s
compliance
with the ABL
Facility’s interest
coverage ratio covenant
between December 31,
2024 to March
30, 2025, or
the
waiver period. Pursuant to the Waiver
Agreement, we will be required to maintain an aggregate
cash balance of
at
least
$100.0
million
in
one
or
more
accounts
with
the
Lenders
(as
defined
below),
or
the
Cash
Balance
Covenant, until such
time that we
submit a covenant
compliance certificate
to the Lenders
pursuant to the
ABL
Facility
which
demonstrates
that
we
are
in
compliance
with
the
interest
coverage
ratio
covenant.
The
Cash
Balance Covenant applies from the time
we submit the covenant compliance
certificate for December 31, 2024,
which is anticipated to be on or after February 19, 2025.
At the end
of the waiver
period, unless
further waivers
are obtained,
any breach
of covenants
would constitute
an event of default under
the terms of the ABL
Facility and the Lenders may declare all
amounts owing under the
ABL Facility immediately due and payable,
terminate such Lenders’ commitments
to make loans under the ABL
Facility,
require
the
Borrowers
to cash
collateralize
any
letter of
credit
obligations
and/or exercise
any
and all
remedies
and
other
rights
under
the
ABL Facility
.
There
is
no assurance
that
we
will
be
able
to
negotiate
an
amendment that
will provide
for modified
covenant levels
that we
can satisfy,
or that
we will
be able
to obtain
additional waivers to the ABL Facility if and when required.
Our
level
of
indebtedness
could
have
further
consequences,
including,
but
not
limited
to,
increasing
our
vulnerability to adverse
economic or industry
conditions, placing us
at a competitive
disadvantage compared
to
other businesses in
the industries in
which we operate
that are
not as leveraged
and that may
be better positioned
to withstand
economic downturns,
limiting our
flexibility to
plan for,
or react
to, changes
in our
businesses and
the industries in which we operate, and requiring us to refinance all or a portion of our existing debt. We may not
be
able
to
refinance
on
commercially
reasonable
terms
or
at
all,
and
any
refinancing
of
our
debt
could
be
at
higher interest rates
and may require
us to comply
with more onerous
covenants, making it more
difficult to obtain
surety bonds, letters of credit or
other financial assurances that may be
demanded by our vendors or regulatory
agencies, particularly during periods in which credit markets
are weak.
If
we
are
unable
to
service
our
debt
obligations,
we
could
face
substantial
liquidity
problems
and
we
may
be
forced to
reduce or delay
investments and capital
expenditures, or to
sell assets, seek
additional capital, including
additional secured or unsecured debt, or restructure or refinance our debt, and we may be unable to continue as
a going concern.
We may be
unable to consummate
any proposed asset
sales or recover
the carrying value
of
these assets,
and
any proceeds
may
not
be adequate
to
meet
any
debt
service
obligations
then
due.
Any
of
these
examples
potentially
could
have
a
material
adverse
impact
on
our
results
of
operations,
profitability,
stockholders’ equity and capital structure.
We
adjust
our
capital
structure
from
time
to
time
and
may
need
to
increase
our
debt
leverage,
which
would make us more sensitive to the effects of
economic downturns.
It is
possible that we
may need
to raise additional
debt or
equity funds
in the
future. Our ABL
Facility and operating
cash flows may not be adequate to fund our ongoing capital requirements, for any future acquisitions or projects
or to
refinance our
debt. There
is no
guarantee that
we will
be able
to refinance
our existing
debt, or
if we
do,
there is no guarantee that such new funding will be on
terms acceptable to us.
Global credit markets have been severely constrained in the
past, such as during a global financial crisis and the
European sovereign
debt crisis,
and during
the
COVID-19
pandemic,
and
the ability
to obtain
new funding
or
refinance in
the future
may be
significantly reduced.
If we
are unable
to obtain
sufficient funding,
either due
to
banking and
capital market
conditions, generally,
or due
to factors
specific to
our
business, we
may not
have
sufficient cash to meet our
ongoing capital requirements, which
in turn could materially and
adversely affect our
financial
condition.
Failure
to
obtain
sufficient
financing
could
cause
delays
or
abandonment
of
business
development plans and have a material adverse effect
on our business, operations and financial condition.
In
recent
years,
certain
financial
institutions,
investment
managers
and
insurance
companies
globally
have
responded to pressure
to take actions
to limit or
divest investments in,
financing made available
to, and insurance
coverage
provided
for,
the
development
of
new
coal-fired
power
plants
and
coal
miners
that
derive
revenues
from thermal coal
sales. For example,
some financial institutions
have publicly announced
that they would
stop
funding new
thermal coal
projects or
would otherwise
reduce their
overall lending
to coal
producers. These
or
similar
policies
may
adversely
impact
the
coal
industry
generally,
our
ability
to
access
capital
and
financial
markets in the future, our costs of capital and the future
global demand for coal.
Coronado Global Resources Inc. Form 10-K December 31,
2024
54
Our business may require substantial ongoing capital
expenditures, and we may not have access to
the
capital required to reach full productive capacity at our
mines.
Maintaining
and
expanding
mines
and
related
infrastructure
is
capital
intensive.
Specifically,
the
exploration,
permitting
and
development
of
Met
coal
reserves,
mining
costs,
the
maintenance
of
machinery,
facilities
and
equipment
and
compliance
with
applicable
laws
and
regulations
require
ongoing
capital
expenditures.
Any
decision to increase
production at our existing
mines or to
develop the high-quality Met
coal recoverable reserves
at our
development properties in
the future
could also affect
our capital
needs or
cause future
capital expenditures
to be higher than in the past and/or higher than our estimates. We cannot assure that we will be able to maintain
our production
levels or
generate sufficient cash
flow, or that
we will
have access
to sufficient financing
to continue
our
production,
exploration,
permitting
and
development
activities
at
or
above
our
present
levels
and
on
our
current or projected
timelines, and we
may be required
to defer all
or a portion
of our capital
expenditures. Our
results
of
operations,
business
and
financial
condition
may
be
materially
and
adversely
affected
if
we
cannot
make such capital expenditures.
To
fund our
capital expenditures,
we will
be required
to use
cash from
our operations,
incur debt
or issue
new
equity.
Our ability
to obtain
bank financing
or our
ability to
access the
capital markets
for future
equity or
debt
offerings, on the other hand, may
be limited by our financial
condition at the time of any
such financing or offering
and the
covenants in
our existing
debt agreements,
as well
as by
general economic
conditions, contingencies
and
uncertainties
that
are
beyond
our
control.
If
cash
flow
generated
by
our
operations
and/or
the
undrawn
capacity under our committed
debt facilities are insufficient
to meet our capital
requirements and we are
unable
to access
the capital
markets on
acceptable terms
or at
all, we
could be
forced to
curtail the
expansion of
our
existing mines and the development of
our properties which, in turn, could
lead to a decline in
our production and
could materially and adversely affect our business,
financial condition and results of operations.
Risks
related
to
our
investment
in
WICET
may
adversely
affect
our
financial
condition
and
results
of
operations.
We have
a minority
interest in
WICET Holdings
Pty Ltd,
whose wholly
owned subsidiary, WICETPL, owns
WICET.
Other coal producers
who export coal through
WICET also hold shares
in WICET Holdings
Pty Ltd. In addition,
we and the other coal producers (or shippers)
have evergreen, ten year take-or-pay
agreements with WICETPL
and pay a terminal handling charge
to export coal through WICET,
which is calculated by reference
to WICET’s
annual operating costs, as well as finance costs associated with
WICETPL’s extern
al debt facilities.
Under our WICET Take
-or-Pay Agreement, Curragh’s export capacity
is 1.5 MMtpa and we are obligated to pay
the terminal handling
charge for
this capacity,
whether utilized
or not. The
terminal handling
charge calculation
is based on total operating and finance costs of WICET
PL being charged to contracted shippers in proportion
to
each shipper’s contracted
capacity. Under the terms of the WICET
Take
-or-Pay Agreement the terminal handling
charge payable
by us
can be
adjusted (increased
or decreased)
by WICETPL if
WICETPL’s operating and finance
costs change, or if a contracted shipper defaults on its take-or-pay agreement obligations and has its contracted
capacity
reduced
to
nil.
Under
the
terms
of
the
WICET
Take
-or-Pay
Agreement
there
is
a
limit
of
how
much
WICETPL
can
charge
us
for
recovery
of
its
finance
costs,
referred
to
as
a
finance
cap.
Since
WICET
began
operating in
April 2015,
five WICET
Holdings Pty
Ltd shipper-shareholders
have defaulted
on their
obligations
under their respective
take-or-pay agreements
and subsequently
had those agreements
terminated. The
result
of these
terminations is a
decrease in
the aggregate contracted
tonnage at
WICET from
27 MMtpa to
13.9 MMtpa.
Given the
operation
of the
finance cap
(which
has been
reached,
subject
to further
adjustment
for Consumer
Price Index,
or CPI) there
is a
limit to the
recovery by
WICET of its
financing costs
from shippers. Accordingly,
prior defaults referred
to above have
resulted in only
minor increases to
the terminal handling
charges payable
by the remaining
shipper shareholders (including us).
These increases have related
to higher A$/ton (or
US$/ton)
charge for
operating
costs
resulting
from
a
lower
contract
base.
If
any of
the
remaining
shipper
shareholders
becomes
insolvent
and/or
defaults
under
its
take-or-pay
agreement,
the
terminal
handling
charges
for
the
remaining shipper shareholders, including us, may increase proportionately to pay the defaulting shipper’s share
of WICET’s
operating
and
financing costs
going forward
(noting that
the
finance cap
applies
in respect
of the
financing costs component of the terminal handling charges).
In addition, if we default under the WICET Take
-or-Pay Agreement and that default is not remedied, then we will
be obligated
to pay
a termination
payment. The
termination payment
is equal
to the
lesser of
our proportion
of
WICETPL’s
total external
debt (which
is based on
the proportion
that our contracted
tonnage bears
to the total
contracted
tonnage
at
WICET
when
the
payment
obligation
is
triggered)
and
ten
years
equivalent
terminal
handling
charges
at
the
prevailing
rate
at
the
time
that
the
termination
payment
falls
due.
We
have
provided
security to
WICETPL in
the form
of a
bank guarantee,
the amount
of which
is required
to cover
our estimated
liabilities as a shipper under the WICET Take
-or-Pay Agreement for the following twelve-month period.
Coronado Global Resources Inc. Form 10-K December 31,
2024
55
In the event
of WICETPL defaulting
on its external
debt obligations,
external lenders
to WICETPL
may enforce
their rights to the security over
the assets of WICET and appoint
a receiver to take steps to
recover outstanding
debt. The external
lenders do not
have direct recourse
to the shippers
to recover outstanding
debt and shipper
take-or-pay agreements would remain on foot and access
to the port would continue to be available to us.
In the
event of
a permanent
cessation of
operations
at WICET,
we may
be required
to procure
additional
port
capacity elsewhere, as well as be liable for a termination payment
under the WICET Take
-or-Pay Agreement.
Risks related to
the Supply Deed
with Stanwell may
adversely affect
our financial condition
and results
of operations.
Coronado
has an
ACSA, as
amended from
time to
time, with
Stanwell
to supply
thermal coal
to the
Stanwell
Power
Station.
The
ACSA
restricted
Coronado
from
mining
the
SRA
which
was
reserved
for
the
benefit
of
Stanwell and could
not be mined
without Stanwell’s
consent. Under the
ACSA, in addition
to supplying thermal
coal at
a price
below the
cost to
Curragh of
mining and
processing the
coal, Coronado
pays certain
rebates to
Stanwell on Met coal exported from certain parts of Curragh, which represents the deferred purchase cost of the
right to
mine some
areas at
Curragh. Our
cost of
supplying coal
to Stanwell
has been
and may
continue to
be
greater than the price paid by Stanwell.
On August 14, 2018, Coronado entered
into the Supply Deed with Stanwell.
The Supply Deed grants Coronado
the right
to mine
the
coal reserves
in the
SRA. In
exchange for
these rights
,
Coronado
has agreed
to certain
amendments to the
ACSA and to
enter into the
NCSA, which will
commence on
or around the
expiration of the
ACSA (currently expected to expire in 2027).
On July 12, 2019, Coronado entered into the NCSA with Stanwell.
Coronado agreed that the total value of the discount received by Stanwell on coal supplied to it under the NCSA
should (by the expiration
date of the NCSA)
be equal to the net
present value of A$210
million as at the date
of
the Supply Deed.
No export rebates
are payable during
the term
of the NCSA.
The amortized cost
of the deferred
consideration was $285.1 million (A$458.5 million)
as of December 31, 2024.
We could
be adversely
affected if we
fail to
appropriately provide financial
assurances for
our obligations.
Australian laws and
U.S. federal and
state laws require
us to provide
financial assurances related
to requirements
to reclaim lands used
for mining, to pay
federal and state workers’
compensation, to provide financial assurances
for coal
lease obligations
and to
satisfy other
miscellaneous obligations.
The primary
methods we
use to
meet
those obligations in
the United States
are to provide
a third-party surety
bond or provide
a letter of credit.
As of
December 31, 2024,
we provided $48.9
million of third-party
surety bonds in
connection with our
U.S. Operations.
There are no cash collateral requirements to support any
of the outstanding bonds.
Our financial
assurance obligations
may increase
due to
a number
of factors,
including the
size of
our mining
footprint and
new government
regulations,
and
we may
experience
difficulty
procuring
or renewing
our surety
bonds. In addition, our bond issuers may demand higher fees or additional collateral, including letters of
credit or
other terms less favorable to us upon those renewals. Because we are required by federal and state law to have
these
bonds
or
other
acceptable
security
in
place
before
mining
can
commence
or
continue,
any
failure
to
maintain surety bonds, letters
of credit or other guarantees or
security arrangements would adversely
affect our
ability to mine coal. That failure
could result from a variety
of factors, including lack of
availability of surety bond
or letters of credit,
higher expense or
unfavorable market terms,
the exercise by
third-party surety bond
issuers
of their right
to refuse
to renew
the surety
and the
requirement to
provide collateral
for future
third-party surety
bond
issuers
under
the
terms
of
financing
arrangements.
If
we
fail
to
maintain
adequate
bonding,
our
mining
permits could be
invalidated, which would
prevent mining operations from
continuing, and future
operating results
could be materially and adversely affected.
In
Australia,
the
Financial
Provisioning
Act
amended
the
financial
assurance
provisions
of
the
EP
Act,
and
impacted the way that our Australian Operations
provide for and manage associated costs
of providing financial
assurances related to mine rehabilitation
obligations. There can be no
assurance that our risk category
allocation
will not change in future years.
For more information on the Financial Provisioning Act, see Item 1.
“Business—Regulatory Matters—Australia—
Environmental Protection Act 1994 (Qld).”
Coronado Global Resources Inc. Form 10-K December 31,
2024
56
Mine closures entail substantial costs. If we prematurely close one or more of our mines, our operations
and financial performance would likely be adversely
affected.
Federal and state
regulatory agencies
have the
authority following
significant health
and safety
incidents, such
as
fatalities,
to
order
mining
operations
to
be
temporarily
suspended
or
a
facility
be
permanently
closed.
For
example, on
January 12,
2020, operations
at our
Curragh mine
were temporarily
suspended after
a contractor
was
fatally
injured
during
a
tire
change
activity
in
the
main
workshop
on
site
and
on
November
21,
2021,
operations at our Curragh mine were temporarily suspended after an employee was fatally injured while working
in the
dragline
operations.
Immediately
following
an
incident
on
May 31,
2024
when
an employee
was
fatally
injured while working in the Company’s Buchanan
underground mining complex located in Virginia
in the United
States, the Company temporarily ceased operations
at its Buchanan mine to assist in the investigation.
We could also be required to close or discontinue
operations at particular mines before the end of their
mine life
due
to
environmental,
geological,
geotechnical,
commercial,
leasing
or
other
issues.
Such
closure
or
discontinuance
of
operations
could
result
in
significant
closure
and
rehabilitation
expenses,
employee
redundancy
costs,
contractor
demobilization
costs
and
other
costs
or
loss
of revenues.
If
and
when
incurred,
these closure and rehabilitation
costs could exceed our
current estimates. If one
or more of our mines
is closed
earlier than anticipated,
we would be
required to fund
the reclamation and
closure costs
on an expedited
basis
and
potentially
lose
revenues
and,
for
some
of
our
operations,
pay
for
take-or-pay
arrangements
that
we
no
longer use,
which
would
have
an
adverse
impact
on
our operating
and
financial
performance.
Many
of
these
costs could also
be incurred
if a mine
was unexpectedly
placed on care
and maintenance
before the end
of its
planned mine life
such as our
mines in the
U.S. Operations, which
were temporarily idled
in 2020 as a
result of
the COVID-19 pandemic.
If the
assumptions underlying
our provision
for reclamation
and mine
closure obligations
prove to
be
inaccurate, we could be required to expend greater
amounts than anticipated.
The EP Act and
the SMCRA establish
operational, reclamation and
closure standards for
all aspects of surface
mining
as
well
as
deep
mining.
We
accrue
for
the
costs
of
current
mine
disturbance
and
final
mine
closure,
including
the
cost
of
treating
mine
water
discharge
where
necessary.
Estimates
of
our
total
reclamation
and
mine-closing liabilities totaled $164.8 million as of December 31, 2024, based upon permit requirements and the
historical
experience
at
our
operations,
and
depend
on
a
number
of
variables
involving
assumptions
and
estimation and therefore may be subject to
change, including the estimated future asset retirement costs
and the
timing of such
costs, estimated proven
reserves, assumptions involving third-party contractors, inflation
rates and
discount rates. If
these accruals are insufficient or
our liability in a
future year is greater
than currently anticipated,
our
future
operating
results
and
financial
position
could
be
adversely
affected.
See
Item 7.
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations—Critical
Accounting
Policies
and
Estimates.”
We are subject to foreign exchange risks involving
certain operations in multiple countries.
Losses sustained
from adverse
movements in
currency
exchange rates
can impact
our financial
performance
and financial position and the level of additional funding required to support our businesses. Our financial results
are reported in US$ and
certain parts of our
liabilities, earnings and cash
flows are influenced
by movements in
exchange rates, especially movements in A$
to US$ exchange rate. For
example, costs relating to our
Australian
Operations
are
generally
denominated
in
A$.
In
addition,
foreign
currency
exposures
arise
in
relation
to
coal
supply
contracts,
procurement
of
plant
and
equipment
and
debt,
which
may
be
priced
in
A$
or
other
foreign
currencies other than US$.
The impact of currency exchange rate movements will vary depending on factors such as the nature, magnitude
and duration
of the movements,
the extent
to which
currency risk
is hedged under
forward exchange
contracts
or other hedging instruments and the terms of these contracts. We may enter into forward exchange
contracts to
hedge a portion of our
foreign currency exposure of
our Australian Operations from
time to time. The unhedged
portion of our non-US$
exposures against exchange rate fluctuations will
be at the risk
of any adverse movement
in exchange rates, which may affect our operating results,
cash flows and financial condition.
Interest rates could change substantially and have an adverse
effect on our profitability.
We
are
exposed
to
interest
rate
risk
in
relation
to
variable-rate
bank
balances
and
variable-rate
borrowing
facilities, such
as the
ABL Facility.
Our interest
rate risk primarily
arises from
fluctuations in the
Secured Overnight
Financing
Rate,
or
SOFR,
and
the
Australian
Bank
Bill
Swap
Yield,
or
BBSY,
in
relation
to
U.S.$-
and
A$-
denominated borrowings, respectively. Our lending rates may increase in the future as a result of factors beyond
our control and may result in an adverse effect on
our financial condition and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
57
In addition,
national and
international regulators
and law
enforcement agencies
have conducted
investigations
into a number of rates or indices, which
are deemed to be “reference rates.”
Actions by such regulators and law
enforcement agencies may result
in changes to the
manner in which certain
reference rates are determined,
their
discontinuance, or the establishment of alternative reference rates.
We may
be unsuccessful
in integrating
the operations
of acquisitions
with our
existing operations
and
in realizing all or any part of the anticipated benefits of
any such acquisitions.
From time to time, we
may evaluate and acquire assets and businesses that
we believe complement our existing
assets and business. Acquisitions may
require substantial capital or the
incurrence of substantial indebtedness.
Our capitalization
and results
of operations
may change
significantly as
a result
of future
acquisitions. Acquisitions
and business expansions involve numerous risks, including the
following:
•
difficulties in the integration of the assets and operations
of the acquired businesses;
•
inefficiencies
and
difficulties
that
arise
because
of
unfamiliarity
with
new
assets
and
the
businesses
associated with them and new geographic areas;
•
the diversion of management’s attention from other
operations; and
•
timing, and whether the acquisition
or business expansion is occurring
during adverse economic, social
and regulatory periods.
Further,
unexpected
costs
and
challenges
may
arise
whenever
businesses
with
different
operations
or
management
are
combined,
and
we
may
experience
unanticipated
delays
in
realizing
the
benefits
of
an
acquisition. Entry into certain lines of
business may subject us to new
laws and regulations with which we
are not
familiar and may lead
to increased litigation and
regulatory risk. Also, following
an acquisition, we may
discover
previously unknown
liabilities associated
with the
acquired business
or assets
for which
we have
no recourse
under applicable indemnification provisions. If a new business generates insufficient revenue or if we are unable
to efficiently manage our expanded operations, our results
of operations may be adversely affected.
Coronado
Global
Resources Inc.
is
a
holding
company
with
no
operations
of
its
own
and,
as
such,
it
depends
on
its
subsidiaries
for
cash
to
fund
its
operations
and
expenses,
including
future
dividend
payments, if any.
As a
holding company,
our
principal
source
of cash
flow
is
distributions
from
our
subsidiaries.
Therefore,
our
ability to fund and conduct our business, service our debt,
and pay dividends, if any,
in the future will depend on
the
ability
of
our
subsidiaries
to
generate
sufficient
cash
flow
to
make
upstream
cash
distributions
to
us.
Our
subsidiaries are separate legal
entities, and although they
are wholly-owned and controlled
by us, they have
no
obligation to make any funds available to us, whether
in the form of loans, dividends, or otherwise. The
ability of
our
subsidiaries
to
distribute
cash
to
us
will
also
be
subject
to,
among
other
things,
restrictions
that
may
be
contained in our subsidiary agreements (as entered into from time to time), availability
of sufficient funds in such
subsidiaries and applicable laws and regulatory restrictions. Claims of any creditors of our subsidiaries generally
will have
priority as
to the
assets of
such subsidiaries
over our
claims and
claims of
our creditors
and stockholders.
To
the extent the ability
of our subsidiaries
to distribute dividends or
other payments to us
is limited in any
way,
our ability to fund and conduct our business, service our
debt, and pay dividends, if any,
could be harmed.
Coronado Global Resources Inc. Form 10-K December 31,
2024
58
Legal, Compliance and Regulatory Risks
We are
subject to
extensive health
and safety
laws and
regulations that
could have
a material
adverse
effect on our reputation and financial condition
and results of operations.
We are subject to extensive laws and regulations governing health and safety at coal
mines in the United States
and Australia. As a
result of increased stakeholder focus on
health and safety issues (such
as black lung disease
or
coal
workers’
pneumoconiosis),
there
is
a
risk
of
legislation
and
regulatory
change
that
may
increase
our
exposure to claims arising
out of current or
former activities or result in
increased compliance costs (e.g., through
requiring improved
monitoring standards
or contribution
to an
industry-pooled fund).
Regulatory agencies
also
have the authority, following
significant health and safety incidents, such as fatalities, to order mining operations
to be temporarily suspended or
the facility be permanently closed.
For example, on January 12, 2020,
operations
at our
Curragh mine were
temporarily suspended after
a contractor was
fatally injured during
a tire
change activity
in
the
main
workshop
on
site
and
on
November
21,
2021,
operations
at
our
Curragh
mine
were
temporarily
suspended after an employee was fatally injured while working in the dragline operations. In relation
to the latter
incident,
the
Company
disclosed
on
November
14, 2024,
that
the
Queensland
Office
of the
Work
Health
and
Safety
Prosecutor
had
issued
proceedings
against
the
Company’s
subsidiary
Coronado
Curragh
Pty
Ltd
as
operator, whereby Coronado Curragh Pty
Ltd is charged
with an offence
contrary to Section
34 of the
Coal Mining
Safety and Health
Act 1999 (Qld).
Immediately following
an incident on
May 31,
2024, when
an employee
was
fatally injured while working
in the Company’s Buchanan
underground mining complex
located in Virginia in
the
United States,
the Company
determined to
temporarily cease
operations at
its Buchanan
mine to
assist in
the
investigation. If further serious safety incidents occur at any of our mining facilities in the future, it
is possible that
a regulator might
impose a range
of conditions on
re-opening of a
facility, including requiring capital expenditures,
which could have a material adverse effect
on our reputation, financial condition and results of operations
.
For
additional
information
about
the
various
regulations
affecting
us,
see
Item 1.
“Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters
—United States.”
We could be negatively affected if
we fail to maintain satisfactory labor relations.
Relations with
our employees
and, where
applicable, organized
labor are
important to
our success.
Enterprise
bargaining and other disputes between us and our employees or disputes affecting our contractors may result in
strikes or uncompetitive work practices.
As of
December 31,
2024, we
had 1,951
employees.
In addition,
as of
December 31,
2024, there
were 1,790
contractors
supplementing
the
permanent
workforce,
primarily
at
Curragh.
As
of
December
31,
2024,
approximately
10.1%
of our
total employees,
all at
our
Australian Operations,
were represented
by organized
labor unions and
covered by the EA.
This EA has
a four-year expiration date
and will remain
in place by
operation
of the Fair Work Act 2009 (Cth) until
replaced or terminated by the Fair
Work Commission.
Our U.S. Operations
employ a 100% non-union labor force.
Future industrial
action by
our employees
or mining
contractors’ employees or
involving trade unions
could disrupt
operations and negatively impact mine productivity,
production and profitability.
Our operations
may impact
the environment
or cause
exposure to
hazardous substances,
which could
result in material liabilities to us.
We are
subject to
extensive environmental
laws and
regulations,
and our
operations may
substantially
impact
the
environment
or
cause
exposure
to
hazardous
materials
to
our
contractors,
our
employees
or
local
communities. We use hazardous materials
and generate hazardous or other regulated
waste, which we store in
our storage or disposal
facilities. We may become subject to
statutory or common law claims
(including damages
claims) as
a result
of
our
use of
hazardous
materials
and generation
of hazardous
waste.
A number
of laws,
including, in the United States,
the CERCLA or Superfund,
and the RCRA, and in
Australia, the EP Act, impose
liability
relating
to
contamination
by hazardous
substances.
Furthermore,
the
use
of
hazardous
materials
and
generation of hazardous and other
waste may subject us to
investigation and require the clean-up
of soil, surface
water, groundwater and other
media.
Coronado Global Resources Inc. Form 10-K December 31,
2024
59
Mining
operation
process,
including
blasting
and
processing
ore
bodies,
can
also
generate
environmental
impacts. These
impacts include,
but are
not limited
to, leakages
of polluting
substances,
explosions,
flooding,
fires, accidental mine water discharges,
and excessive dust and noise. Such
risks could result in damage to
the
applicable mine site, personal
injury to our employees
and contractors, environmental
damage, decreased coal
production and
possible legal
liability under
environmental regulations.
Employee or
strict liability
claims under
common law
or environmental
regulations in
relation to
these matters
may arise,
for example, out
of current
or
former activities
at sites
that we
own, lease
or operate
and at
properties to
which hazardous
substances have
been sent for treatment,
storage, disposal or other
handling. Our liability
for such claims may
be strict, joint and
several with other miners or parties or with our
contractors, such that we may be held
responsible for more than
our
share
of
the
contamination
or
other
damages,
or
even
for
the
entire
amount
of
damages
assessed.
Additionally,
any violations of
environmental laws by
us could lead
to, among other
things, the imposition
on us
of substantial fines,
penalties, other civil and
criminal sanctions, the curtailment
or cessation of
operations, orders
to
pay
compensation,
orders
to
remedy
the
effects
of
violations
and
take
preventative
steps
against
possible
future violations,
increased compliance costs,
or costs
for environmental remediation,
rehabilitation or rectification
works.
We maintain extensive Met
coal refuse areas
and slurry impoundments at
our mining properties. At
Curragh, coal
slurry
is
disposed
of
by
pumping
into
an
impoundment
area
where
particles
are
allowed
to
settle.
We
have
procedures
in
place
that
the
Curragh
slurry
impoundments
remain
below
the
surrounding
topography
so
that
there is
minimal likelihood
of failure
and/or spills.
At our
U.S. Operations,
refuse areas
and impoundments
are
frequently inspected and subject
to extensive governmental regulation.
Slurry impoundments have
been known
to
fail,
releasing
large
volumes
of
coal
slurry
into
the
surrounding
environment.
Structural
failure
of
an
impoundment can result in extensive damage to the environment
and natural resources, such as bodies of water
that the coal slurry reaches, as well as create liability for
related personal injuries, property damages and injuries
to natural
resources and plant
and wildlife.
Coronado has four
refuse areas
throughout our
U.S. mining
properties.
Only one area is a slurry impoundment. One refuse area utilizes a slurry cell system, that is designed to limit the
amount of slurry
that is
subject to a
problematic release. Two of
the refuse areas
utilize a combined
refuse system
and do not impound slurry. The one slurry impoundment overlies mined out areas, which can pose a heightened
risk of
failure. The
presence of
the mined
out works
is incorporated
into the
design of
this impoundment.
If our
impoundment
or
any
of
the
other
refuse
areas
were
to
fail,
we
could
be
subject
to
substantial
claims
for
the
resulting environmental contamination and associated liability,
as well as for related fines and penalties.
Changes in and
compliance with government policies,
regulations
or legislation may
adversely affect our
financial condition and results of operations.
The coal mining industry
is subject to regulation
by federal, state and
local authorities in each
relevant jurisdiction
with respect
to
a range
of industry
specific and
general
matters.
Any future
legislation
and
regulatory
change
imposing more constraints or
more stringent requirements may
affect the coal mining
industry and may adversely
affect our financial condition and results of operations. Examples of such changes are, future laws or regulations
that may limit
the emission
of GHGs, attach
a cost to
GHG emissions,
or limit the
use of thermal
coal in power
generation, more stringent workplace health and safety laws, more rigorous environmental laws, and changes to
existing taxation and royalty legislation.
Compliance
with
applicable
federal,
state
and
local
laws
and
regulations
may
become
more
costly
and
time-consuming
and
may
delay
commencement
or
interrupt
continuation
of
exploration
or
production
at
our
operations. We have
incurred, and may
in the future
incur, significant expenditures to comply
with such regulation
and legislation. These laws are constantly evolving and may become increasingly
stringent. The ultimate impact
of complying with existing laws
and regulations is not always
clearly known or determinable due
in part to the
fact
that
certain
implementation
of
the
regulations
for
these
laws
have
not
yet
been
promulgated
and
in
certain
instances are undergoing
revision. In addition,
judicial decisions limiting
the authority of
regulatory agencies,
or
decisions
impacting
current
regulations
and
policies
implemented
by
such
agencies,
could
create
uncertainty
regarding the regulatory landscape and impact the Company’s
ability to plan for future investments.
These laws and regulations,
particularly new legislative or
administrative proposals (or
judicial interpretations of
existing laws and
regulations), could result in
substantially increased capital, operating
and compliance costs and
could have
a material
adverse effect
on our
operations
and our
customers’ ability
to use
our products.
Due in
part to
the extensive
and comprehensive
regulatory requirements,
along with
changing interpretations
of these
requirements, violations of applicable federal, state and local laws
and regulations occur from time to time in the
coal industry
and
minor violations
have occurred
at our
Australian
Operations
and
our U.S.
Operations
in the
past.
Coronado Global Resources Inc. Form 10-K December 31,
2024
60
Moreover, changes in the law
may impose additional standards and a heightened degree
of responsibility for us
and our stockholders, directors and employees; may
require unprecedented compliance efforts; could
divert our
management’s
attention;
and
may
require
significant
expenditures.
For
example,
we
may
also
be
subject
to
unforeseen
environmental
liabilities
resulting
from
coal-related
activities,
which
may
be
costly
to
remedy
or
adversely impact
our operations.
In particular,
the acceptable
level of
pollution and
the potential
abandonment
costs and obligations for which we
may become liable as a result
of our activities may be
difficult to assess under
the current legal
framework. To the extent that
required expenditures, as
with all
costs, are not
ultimately reflected
in the
prices of
coal, our
operating results
may be
detrimentally impacted.
The costs
and operating
restrictions
necessary for compliance
with safety
and environmental laws
and regulations,
which is a
major cost
consideration
for
our
Australian
Operations
and
U.S.
Operations,
may
have
an
adverse
effect
on
our
competitive
position
relative to foreign producers and operators in
other countries which may not be
required to incur equivalent costs
in their operations.
We are
also affected
by various
other international,
federal, state,
local and
tribal or
indigenous environmental
laws
and
regulations
that
impact
our
customers.
To
the
extent
that
such
environmental
laws
and
regulations
reduce customer demand for or
increase the price of coal,
our operating results may
be detrimentally impacted.
For
additional
information
about
the
various
regulations
affecting
us,
see
Item 1.
“Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters
—United States.”
We
are
subject
to
extensive
forms
of
taxation,
which
imposes
significant
costs
on
us,
and
future
regulations
and
developments
could
increase
those
costs
or
limit
our
ability
to
produce
coal
competitively.
Federal,
state
or
local
governmental
authorities
in
nearly
all
countries
across
the
global
coal
mining
industry
impose various
forms of
taxation
on coal
producers,
including production
taxes,
sales-related
taxes,
royalties,
stamp duty, environmental
taxes and income taxes.
In 2022, the Queensland State Government in Australia amended the
Mineral Resources Regulation 2013 (Qld)
introducing
additional
higher
tiers
to
the
coal
royalty
rates
effective
from
July
1,
2022,
increasing
the
royalty
payable by our Australian Operations.
The tiers currently applicable are as set out below:
•
7% for average coal price per Mt sold up to and including
A$ 100 per Mt;
•
12.5% for average coal price per Mt sold from A$100 to
A$150 per Mt;
•
15% for average coal price per Mt sold from A$150 to
A$175 per Mt;
•
20% for average coal price per Mt sold from A$175 to
A$225 per Mt;
•
30% for average coal price per Mt sold from A$225 to
A$300 per Mt; and
•
40% for average coal price per Mt sold above A$300 per
Mt.
If new legislation or
regulations related to various forms
of coal taxation or
income or other taxes
generally, which
increase our costs or limit our ability to compete
in the areas in which we sell coal, or which
adversely affect our
key customers, are adopted, or if
the basis upon which such
duties or taxes are assessed
or levied, changes or
is different from that provided by us, our business, financial condition or results of
operations could be adversely
affected.
We may be subject
to litigation, the disposition
of which could negatively
affect our profitability and cash
flow
in
a
particular
period,
or
have
a
material
adverse
effect
on
our
business,
financial
condition
and
results of operations.
Our profitability or cash flow in
a particular period could be affected by
an adverse ruling in any litigation that
may
be filed against us in the future. In addition, such litigation could have
a material adverse effect on our business,
financial condition
and results of operations. See Item 3. “Legal Proceedings.”
Coronado Global Resources Inc. Form 10-K December 31,
2024
61
We have no
registered trademarks for
our Company
name used by
us in the
United States or
any other
countries, and failure to obtain those registrations
could adversely affect our business.
Although
we
have
filed
a
trademark
application
for
use
of
the
stylized
mark
“CORONADO
STEEL
STARTS
HERE” in the United States and Australia, our applications are still pending
and the corresponding mark has not
been registered
in
the
United
States
or
Australia.
We
have
not
filed
for
this
or
other
trademarks
in
any
other
country. During trademark registration proceedings, we may receive rejections. If so, we will have an opportunity
to respond,
but we
may be
unable to
overcome such
rejections. In
addition, Intellectual
Property Australia
and
the United
States Patent
and Trademark Office
and comparable agencies
in many
foreign jurisdictions
may permit
third parties to oppose pending trademark
applications and to seek to
cancel registered trademarks. If opposition
or
cancellation
proceedings
are
filed
against
our
trademark
application,
our
trademark
may
not
survive
such
proceedings,
and/or
we
may
be
required
to
expend
significant
additional
resources
in
an
effort
to
defend
ourselves in the proceedings or identify a suitable substitute
mark for future use.
Failure to comply with applicable anti-corruption and trade laws, regulations and policies could result in
fines and criminal
penalties, causing
a material adverse
effect on our
business, operating and
financial
prospects or performance.
Any
fraud,
bribery,
misrepresentation,
money
laundering,
violations
of
applicable
trade
sanctions,
anti-competitive
behavior
or
other
misconduct
by
our
employees,
contractors,
customers,
service
providers,
business
partners
and
other
third parties
could
result
in violations
of relevant
laws
and regulations
by us
and
subject us or relevant
individuals to corresponding regulatory
sanctions or other claims,
and could also result
in
an event of default under our financing arrangements. These unlawful activities
and other misconduct may have
occurred in
the past
and may
occur in
the future
and may
result in
civil and
criminal liability
under increasingly
stringent laws relating
to fraud, bribery,
sanctions, competition and
misconduct or cause
serious reputational
or
financial
harm
to
us.
In
addition,
failure
to
comply
with
environmental,
health
or
safety
laws
and
regulations,
privacy laws and regulations,
U.S. trade sanctions,
the U.S. Foreign Corrupt
Practices Act and other
applicable
laws or regulations could result in litigation, the assessment of damages, the imposition of penalties, suspension
of production
or distribution,
costly changes
to equipment
or processes
due to
required corrective
action, or
a
cessation or interruption of operations.
We
have
policies
and
procedures
to
identify,
manage
and
mitigate
legal
risks
and
address
regulatory
requirements
and
other
compliance
obligations.
However,
there
can
be
no
assurance
that
such
policies,
procedures and established internal controls
will adequately protect us against
fraudulent or corrupt activity and
such activity could have an adverse effect on our reputation,
financial condition and results of operations.
Risks Specific to Our Common Stock
Our certificate of incorporation and bylaws include
provisions that may discourage a change in control.
Provisions contained in our amended and restated certificate of incorporation, or certificate of incorporation, and
amended and
restated bylaws, or
bylaws, and
Delaware law
could make
it more
difficult for a
third-party to acquire
us, even
if
doing
so
might
be beneficial
to
our stockholders.
Provisions
of
our certificate
of
incorporation
and
bylaws impose
various
procedural and
other requirements
that could
make it
more difficult
for stockholders
to
effect certain corporate actions.
We have elected not to be governed by Section 203 of the General Corporation Law of
the State of Delaware,
or
the DGCL (or any successor provision thereto),
until immediately following the time at
which the EMG Group no
longer beneficially
owns in
the aggregate
shares of
our common
stock representing
at least
10% of
our voting
stock, in which case we
shall thereafter be governed by Section
203 if and for
so long as Section 203
by its terms
would apply
to us.
Section 203
provides that
an interested
stockholder,
along with
its affiliates
and associates
(i.e., a stockholder that has
purchased greater than 15%,
but less than 85%, of
a company’s outstanding voting
stock (with
some exclusions)),
may not
engage in
a business
combination
transaction
with the
company for
a
period of three years after buying more than 15% of a company’s outstanding voting stock unless certain criteria
are met or certain other corporate actions are taken by the company.
These provisions could limit the price
that certain investors might be willing
to pay in the future for
shares of our
common stock and may have the effect of delaying
or preventing a change in control.
Coronado Global Resources Inc. Form 10-K December 31,
2024
62
Our
certificate
of
incorporation
limits
the
personal
liability
of
our
directors
for
certain
breaches
of
fiduciary duty.
Our
certificate
of
incorporation
and
bylaws
include
provisions
limiting
the
personal
liability
of
our
directors
for
breaches
of
fiduciary
duty
under
the
DGCL.
Specifically,
our
certificate
of
incorporation
contains
provisions
limiting
a
director’s
personal
liability
to
us
and
our
stockholders
to
the
fullest
extent
permitted
by
the
DGCL.
Furthermore, our
certificate of
incorporation provides
that no director
shall be
liable to
us and
our stockholders
for
monetary
damages
resulting
from
a
breach
of
fiduciary
duty
as
a
director,
except
to
the
extent
that
such
exemption from liability or limitation thereof is
not permitted under the DGCL. The principal
effect of this limitation
on liability
is that
a stockholder
will be
unable to
prosecute an
action for
monetary damages
against a
director
unless the
stockholder can
demonstrate a
basis for
liability that
cannot be
eliminated under
the DGCL.
These
provisions, however, should not limit or eliminate our right or any stockholder’s right to seek non-monetary relief,
such as an injunction or rescission,
in the event of a
breach of a director’s fiduciary duty. These provisions do not
alter a director’s liability under
U.S. federal securities laws.
The inclusion of these
provisions in our certificate
of
incorporation may discourage or deter stockholders or management from bringing
a lawsuit against directors for
a breach of
their fiduciary
duties, even
though such an
action, if successful,
might otherwise have
benefited us
and our stockholders.
Coronado
Group
LLC
and
the
EMG
Group
have
substantial
control
over
us
and
are
able
to
influence
corporate matters.
Coronado Group
LLC and
the EMG
Group have
significant
influence over
us, including
control over
decisions
that
require
the
approval
of
stockholders,
which
could
limit
the
ability
of
other
stockholders
to
influence
the
outcome of stockholders votes.
As of
December 31,
2024, the
EMG Group
indirectly held
50.4% of
our outstanding
shares of
common stock.
Therefore, the EMG
Group has
effective control
over the outcome
of votes on
all matters requiring
approval by
stockholders. There is a risk that the interests of the EMG Group could conflict with or differ from our interests or
the interests of
other stockholders.
In addition, pursuant
to the terms
of the Stockholder’s
Agreement, dated
as
of September
24, 2018,
between us
and Coronado
Group LLC,
or the
Stockholder’s Agreement,
so long
as it
beneficially owns in the aggregate at least 25% of the outstanding shares of our common stock, the EMG Group
will have
the ability
to exercise
substantial control
over certain
of our
transactions,
including change
of control
transactions,
such
as
mergers
and
capital
and
debt
raising
transactions.
See Item
5.
“Market
for
Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for a description of the
Stockholder’s Agreement.
Further, pursuant to
the terms of the Series A
Share, Coronado Group and the
EMG Group or its successors
or
permitted
assigns,
as
the
beneficial
owner
of
the
Series A
Share,
at
its
option,
will
have
the
ability
to
elect
a
specified number of directors, or the Series A Directors, based on
the EMG Group’s aggregate level of beneficial
ownership of shares
of our common
stock. For more
details on the
ability of Coronado
Group and the
EMG Group
to elect Series A Directors, as
well as the rights of
stockholders to participate in the removal of
any such Series
A
Directors,
see
Item 5.
“Market
for
Registrant’s
Common
Equity,
Related
Stockholder
Matters
and
Issuer
Purchases of Equity Securities.”
Moreover, the
EMG Group’s beneficial
ownership of shares of
our common stock may
also adversely affect
the
price of our
common stock
to the extent
equity investors
perceive disadvantages
in owning common
stock of a
company with a controlling stockholder.
In addition, the EMG Group
is in the business of making
investments in
companies and may, from time to time, acquire interests in businesses that directly or
indirectly compete with us,
as well as businesses of our existing or potential significant
customers. The EMG Group may acquire or seek
to
acquire assets that
we seek to
acquire and, as
a result, those
acquisition opportunities
may not be
available to
us or
may be
more expensive
for us
to pursue,
and as
a result,
the interests
of the
EMG Group
may not
align
with the interests of our other stockholders.
The EMG Group has the
right, subject to certain conditions, to
require us to cooperate in
a sale of shares
of our common stock held by it (including in the form
of CDIs) under the Securities Act.
Pursuant to the Registration
Rights and Sell-Down Agreement,
dated as of September 24,
2018, between us and
Coronado
Group LLC,
or
the
Registration
Rights
and
Sell-Down
Agreement,
Coronado
Group LLC
(or
its
successors
or
permitted
assigns
or
transferees)
has
the
right,
subject
to
certain
conditions,
to
require
us
to
cooperate in a
sell-down of
shares of
our common
stock or
CDIs held by
it. By virtue
of its majority
ownership,
exercising its registration rights and selling a large number of shares or CDIs, Coronado Group LLC could cause
undue volatility in the
prevailing market price of
our common stock. See
Item 5. “Market for Registrant’s Common
Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.”
Coronado Global Resources Inc. Form 10-K December 31,
2024
63
Our non-employee directors and their respective
affiliates, including the EMG Group, may
be able to take
advantage of a corporate opportunity that would otherwise
be available to us.
The corporate opportunity
and related
party transactions provisions
in our
certificate of incorporation
could enable
any
of
our
non-employee
directors
or
their
respective
affiliates,
including
the
EMG
Group,
to
benefit
from
corporate opportunities
that might
otherwise be
available to
us. Subject
to the
limitations of
applicable law,
our
certificate of incorporation, among other things, will:
•
permit
us
to
enter
into
transactions
with
entities
in
which
one
or
more
non-employee
directors
are
financially or otherwise interested;
•
permit any non-employee director or
his or her affiliates to
conduct a business that competes
with us and
to make investments in any kind of property in which we
may make investments; and
•
provide that if
any non-employee director
becomes aware of
a potential business
opportunity, transaction
or
other
matter
(other
than
one
expressly
offered
to
that
non-employee
director
solely
in
his
or
her
capacity
as
our
director),
that
non-employee
director
will
have
no
duty
to
communicate
or
offer
that
opportunity to
us, and
will be
permitted to
communicate
or offer
that opportunity
to his
or her
affiliates
and pursue or acquire such opportunity for himself
or herself, and that non-executive director
will not be
deemed
to
have
acted
in
a
manner
inconsistent
with
his
or
her
fiduciary
or
other
duties
to
us
or
our
stockholders regarding the opportunity or acted in bad faith or in a manner inconsistent with
our and our
stockholders’ best interests.
These provisions enable a
corporate opportunity that would
otherwise be available to
us to be taken by
or used
for the
benefit of
the
non-employee
directors
or their
respective
affiliates,
which
include the
EMG Group
as a
result of the rights granted to it under the Stockholder’s Agreement.
General Risk Factors
Any
failure
to
maintain
effective
internal
control
over
financial
reporting
may
adversely
affect
our
financial condition and results of operations.
Our
management
is
responsible
for
establishing
and
maintaining
adequate
internal
control
over
financial
reporting.
Internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
in
accordance
with
generally accepted accounting principles in the United
States, or U.S. GAAP.
During the course of the preparation of our financial statements,
we evaluate and correct any deficiencies in
our
internal controls over
financial reporting. If
we fail to
maintain an effective system
of disclosure or
internal controls
over financial
reporting, including
satisfaction of
the requirements
of Section
404 of
the Sarbanes-Oxley
Act of
2002, we may not be able to report
accurately or timely on our financial results or adequately identify and reduce
fraud. Therefore, the financial condition of our business could be adversely
affected, current and potential future
stockholders could lose confidence in us and/or
our reported financial results, which may cause
a negative effect
on the trading price of our
CDIs, and we could be exposed
to litigation or regulatory
proceedings, which may be
costly or divert management attention.
The requirements of
being a public company
in the United
States and Australia may
strain our resources,
divert
management’s
attention,
and
affect
our
ability
to
attract
and
retain
executive
management
and
qualified board members.
Our CDIs are
currently listed on
the ASX and
we are registered
as a foreign
company in
Australia. As such
we
are subject to continuous compliance requirements under relevant Australian laws and regulations, including the
listing rules
of the
ASX, as
amended from
time to
time, or
the ASX
Listing Rules,
and certain
provisions of
the
Corporations Act 2001 (Cth),
or the Corporations Act.
Coronado Global Resources Inc. Form 10-K December 31,
2024
64
As a U.S.
public company, we are subject
to the reporting
requirements of the
Exchange Act, the
Sarbanes-Oxley
Act
of
2002,
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
of
2010
and
other
applicable
securities laws, rules and regulations. Compliance with these
laws, rules, and regulations may increase our legal
and
financial
compliance
costs,
make
some
activities
more
difficult,
time-consuming,
or
costly,
and
increase
demand on
our systems
and resources.
The Exchange
Act requires,
among other
things,
that
we file
annual,
quarterly, and
current reports with respect
to our business and
results of operations. In
the absence of a waiver
from the ASX
Listing Rules, these
SEC periodic reports
will be in addition
to our periodic
filings required by
the
ASX Listing
Rules.
The
Sarbanes-Oxley
Act of
2002 requires,
among
other things,
that we
maintain
effective
disclosure
controls
and
procedures
and
internal
control
over
financial
reporting.
In
order
to
maintain
and,
if
required, improve our disclosure
controls and procedures and
internal control over financial
reporting to meet this
standard, significant resources and management oversight will be required. As a result, management’s attention
may be diverted from other
business concerns and our
costs and expenses will
increase, which could harm our
business
and
results
of
operations.
We
may
need
to
hire
more
employees
in
the
future
or
engage
outside
consultants, which will increase our costs and expenses.
In addition, changing laws,
regulations, and standards relating to
corporate governance and public disclosure
are
creating
uncertainty
for
public
companies,
increasing
legal
and
financial
compliance
costs
and
making
some
activities more time consuming.
These laws, regulations
and standards are subject
to varying interpretations, in
many cases due to their
lack of specificity and,
as a result, their
application in practice may
evolve over time as
new
guidance
is
provided
by
regulatory
and
governing
bodies.
This
could
result
in
continuing
uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance
practices.
We
intend
to
invest
resources
to
comply
with
evolving
laws,
regulations
and
standards,
and
this
investment may result in increased
general and administrative expenses
and a diversion of management’s
time
and
attention
from
sales-generating
activities
to
compliance
activities.
If
our
efforts
to
comply
with
new
laws,
regulations and standards differ from the activities intended by
regulatory or governing bodies due to ambiguities
related
to
their
application
and
practice,
regulatory
authorities
may
initiate
legal,
administrative
or
other
proceedings against us and our business may be harmed.
A state
court located within
the State
of Delaware (or, if
no state court
located within the
State of
Delaware
has jurisdiction, the
federal district court
for the District
of Delaware) will
be, to the
extent permitted by
law,
the
sole
and
exclusive
forum
for
substantially
all
state
law
based
disputes
between
us
and
stockholders.
Our bylaws provide
that, unless we
consent in writing
to the selection
of an alternative
forum, a state
or federal
court within the State of Delaware will be the sole and
exclusive forum for:
•
any derivative action or proceeding brought on our behalf;
•
any action or proceeding asserting a claim of breach of
a fiduciary duty owed by any director or
officer or
other employee or
agent of the
Company to the
Company or the
Company’s stockholders or debtholders;
•
any
action
or
proceeding
asserting
a
claim
against
the
Company
or
any
director
or
officer
or
other
employee or
agent of
the Company
arising pursuant
to any
provision of
the DGCL
or our
certificate of
incorporation or bylaws; or
•
any action
asserting
a claim
against
the
Company
or
any
director
or
officer
or
other
employee
of
the
Company
governed
by
the
internal
affairs
doctrine
or
other
“internal
corporate
claims”
as
defined
in
Section 115 of the DGCL.
The choice of
forum provision may limit
a stockholder’s ability
to bring a claim
against us or our
directors, officers,
employees or
agents in
a forum
that it
finds favorable,
which may
discourage stockholders
from bringing
such
claims
at
all.
Alternatively,
if a
court
were
to
find
the
choice
of forum
provision
contained
in
our
bylaws
to
be
inapplicable or unenforceable
in an action,
we may incur
additional costs associated
with resolving such
action
in
another
forum,
which
could
materially
and
adversely
affect
our
business,
financial
condition
and
results
of
operations. However, the choice of forum provision does
not apply to any actions
arising under the Securities Act
or the Exchange Act.
The issuance of additional
common stock or securities
convertible into our
common stock could
result
in dilution of the ownership interest in us held by existing
stockholders.
We may
issue more
CDIs in
the future
in order
to fund
future investments, acquisitions,
capital raising
transactions
or
to
reduce
our
debt.
While
we
will
be
subject
to
the
constraints
of
the
ASX
Listing
Rules
regarding
the
percentage of our
capital that we
are able to
issue within a
12-month period
(subject to applicable
exceptions),
any such equity raisings may dilute the ownership of existing
stockholders for shares of our common stock.
Coronado Global Resources Inc. Form 10-K December 31,
2024
65
We are subject to general market
risks that are inherent to companies
with publicly traded securities and
the price of our securities may be volatile.
We are subject to
the general market risks that
are inherent in all
securities traded on a
securities exchange. This
may result
in fluctuations
in the
trading price
of our
securities that are
not explained
by our
fundamental operations
and activities. There is
no guarantee that the
price of our securities
will increase in the
future, even if our
earnings
increase.
Our securities may trade at, above or below the price paid by an investor for those securities due to a number of
factors, including, among others:
•
general market conditions, including investor sentiment;
•
movements in interest and exchange rates;
•
fluctuations in the local and global market for listed stocks;
•
actual or anticipated
fluctuations in
our interim and
annual results and
those of other
public companies
in our industry;
•
industry cycles and trends;
•
mergers and strategic alliances in the coal industry;
•
new or changes in government laws or regulations;
•
potential or actual military conflicts or acts of terrorism;
•
new or changes in accounting principles;
•
announcements concerning us or our competitors;
•
changes in government policy,
legislation or regulation;
•
inclusion of our securities in or removal from particular market
indices (including S&P and ASX indices);
and
•
the nature of the markets in which we operate,
including adverse weather conditions.
Other factors
that may
negatively affect
investor sentiment
and influence
us, specifically,
or the
stock market,
more generally, include acts
of terrorism, an outbreak of international hostilities, fires, floods, earthquakes,
labor
strikes, civil
wars, natural
disasters, outbreaks
of disease,
including a
global pandemic,
or other
man-made
or
natural events.
Stock markets have
experienced extreme price
and volume fluctuations
in the past
that are
often disproportionate
or
unrelated
to
the
operating
performance
of
companies.
There
can
be
no
guarantee
that
trading
prices
and
volumes of any securities
will be sustained. These
factors may materially affect the
market price of our
securities,
regardless of our
operational performance. This
may then significantly
impact our ability
to raise new
equity which
may be required to fund our operations if our financial
performance deteriorates due to other factors.
The payment of dividends and repurchases of our common stock are dependent on a number of factors,
and future
dividend payments
and repurchases
cannot be
assured and
are within
the discretion
of our
Board of Directors.
The
payment
of
dividends
in
respect
of
our
common
stock
is
impacted
by
several
factors,
including
our
profitability,
retained earnings,
capital requirements
and free
cash flow,
as well
as applicable
covenants under
the Indenture (as defined below) governing our senior secured notes and covenants under the ABL Facility.
Any
future
dividend
payments
will
be
determined
by
and
declared
at
the
discretion
of
our
Board
of
Directors
considering the factors above,
among others. There is no guarantee that
any dividend payments will be paid,
or
repurchases will be made, by
us in the future,
or if paid, paid at previous
levels. From time to time,
our Board of
Directors may also cancel previously announced dividend
payments.
Coronado Global Resources Inc. Form 10-K December 31,
2024
66
ITEM 1B. UNRESOLVED
STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy:
Coronado
has
cybersecurity threats. Coronado heavily relies on information technology systems throughout its operations, and
acknowledges
the
critical
importance
of
safeguarding
its
digital
assets
and
protecting
sensitive
information.
Regular security assessments are conducted
to monitor technological implementations against
global standards.
Coronado
also
maintains
a
suite
of
security
measures
to
help
defend
against
unauthorized
access
and
misappropriation
of
technology.
Additionally,
the
Coronado
IT
department
distributes
training
and
awareness
information to personnel covering email
security,
password security,
data handling security,
enterprise resource
planning systems and cloud security.
Coronado’s cybersecurity
risk management
is integrated
into its Group
risk management
processes, which
are
governed
by
the
Group
Risk
Management
Framework
and
Risk
Management
Policy.
The
Risk
Management
Framework and Risk Management Policy outline:
●
●
●
●
●
Certain key controls considered through Coronado’s
internal control processes are linked to cybersecurity
risks,
these include controls over access and change management for key financial
systems. Where the management
of
these
key
financial
systems
is
outsourced
to
third
parties,
Coronado
obtains
assurance
reports
on
the
effectiveness
of
key
vendor
controls.
Additionally,
Coronado
uses
third
parties
to
conduct
cybersecurity
penetration testing at Coronado's U.S.
and Australian operations. In 2023,
Coronado created the Digital Advisory
Committee,
or
Committee,
which
is
chaired
by
the
Vice
President
of
Information
Technology.
As
part
of
Coronado’s processes to
providers, the Committee is tasked
with reviewing new software requests
from Coronado’s various divisions. The
Committee is
comprised of
business systems,
plant and
operational personnel
from both
Coronado’s U.S.
and
Australian operations.
As of
the filing
of this
Annual Report
on Form
10-K, Coronado
is not
aware of
any cybersecurity
incidents that
have occurred
since the
beginning of
2024 that
have materially
affected,
or are
reasonably likely
to
affect, Coronado, including Coronado’s
business strategy,
results of operations or financial condition.
Coronado
could be subject to cybersecurity incidents in
the future which may have a material adverse
effect on Coronado’s
business strategy, results of operations or financial
condition. For further information on
Coronado’s risks relating
to cybersecurity threats, see “Operation and Technology
Risks” in “Risk Factors” on page 47
of this Form 10-K.
Governance:
The
Board
of
Directors
is
responsible
for
reviewing,
ratifying,
and
monitoring
systems
of
risk
management,
internal
control,
and
legal
compliance.
This
includes
identifying
the
main
risks
associated
with
Coronado's
businesses,
including
cybersecurity
risk,
and
implementing
appropriate
systems
to
manage
such
risks.
As
outlined in the Audit
Governance and Risk
Committee,
or AGRC,
charter, the
Board of Directors
has delegated
to
the
AGRC
responsibility
for
overseeing
corporate
and
governance
risk
management,
financial
risk
management, and compliance
with applicable laws,
regulations, standards, and
best practice guidelines.
In 2024,
the AGRC
charter was
amended to
confirm that
this responsibility
includes the
oversight of
cybersecurity risk.
The
AGRC
is
informed
of
cybersecurity
risks
by
management,
which
includes
an
annual
cybersecurity
risk
presentation.
As part of their
review of
to the Board of Directors,
which enables the Board of Directors to incorporate the insights of such reports into its
overall risk oversight analysis.
Coronado Global Resources Inc. Form 10-K December 31,
2024
67
Supporting this governance
framework, the
Executive Leadership
Team
,
or ELT
,
is responsible
for maintaining
effective
systems
of
risk
management
and
internal
control.
Within
this
framework,
the
Vice
President
of
Information
Technology
is
responsible
for
the
cybersecurity
function.
The
Vice
President
of
Information
Technology has experience in various roles involving managing information systems and cybersecurity functions
and
developing
cybersecurity
strategies.
The
Vice
President
of
Information
Technology
reports
to
the
Group
Chief Financial Officer,
or Group CFO, who is a member of the ELT.
In order to prevent, detect, mitigate and
remediate cybersecurity incidents, Coronado maintains a Cyber Incident
Response
Plan
(Plan).
The
Plan
outlines
Coronado's
approach
to
identifying
and
containing
cybersecurity
incidents, along with recovery
and improvement processes.
The Plan includes incident
assessment criteria that
allow for
escalation of
potentially material
cybersecurity
incidents. The
Group CFO
reports to
the AGRC
in the
event
of
a
potentially
material
cybersecurity
incident.
Additionally,
annual
reviews
of
Coronado’s
current
cybersecurity status and strategy are presented to the Board
of Directors and the AGRC by management.
Coronado Global Resources Inc. Form 10-K December 31,
2024
68
ITEM 2.
PROPERTIES
Summary Overview of Mining Operations
Coronado owns and controls
a portfolio of operating
mines and development projects
in Queensland, Australia,
and
Virginia,
West
Virginia
and
Pennsylvania
in
the
United
States.
Our
Australian
Operations
consist
of
the
100%-owned Curragh mine
complex consisting of
two open cut
mines (Curragh North
and Curragh South)
and
an underground
mine (Mammoth
Underground,
formerly known
as Curragh
Underground). With
respect to
our
U.S. Operations, Coronado owns a 100% interest in two producing
mine complexes (Buchanan and Logan) and
two
development
properties
(Mon
Valley
Minerals
(formerly
called
Pangburn-Shaner-Fallowfield)
and
Russell
County). On
January 14,
2025, Coronado
successfully completed
the sale
of its
non-core idle
Greenbrier mine
complex.
Therefore,
reserves
and
resources
information
in
this
Annual
Report
on
Form
10-K
do
not
include
Greenbrier.
Figures 1
and 2
below show the
locations of our
mining properties in
Australia and
the United States,
respectively.
Figure 1: Australian Operations:
Coronado Global Resources Inc. Form 10-K December 31,
2024
69
12.4
13
25.3
12.8
12.6
25.4
12.6
14
26.6
Australia
United States
Group
ROM production (Mt)
FY22
FY23
FY24
9.8
6.2
16.0
10.0
5.8
15.8
9.7
5.7
15.3
Australia
United States
Group
Saleable production (Mt)
FY22
FY23
FY24
Figure 2: U.S. Operations:
The
below
charts
show
ROM
production
and
saleable
production
for
our
Australian
Operations
and
our
U.S.
Operations for the years ended December 31, 2024, 2023
and 2022.
See the descriptions of our material mining properties
under “—Curragh,” “—Buchanan,” “—Logan” and “—Mon
Valley”
below
for
more
information.
Table
1
below
contains
a
summary
of
the
key
information
relative
to
the
various
Coronado
properties.
Tables
2
and
3
provide
a
summary
of
our
coal
resources
and
reserves,
respectively, as of December
31, 2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
70
Table 1.
Summary of Coronado Properties
Property
(Property
Stage)
Mineral Rights
(1)
Permit
Status
(2)
Mine Type(s)
Coal Type
Coal Seams of
Economic
Interest
(Formation)
Processing
Plants/
Facilities
Curragh
(Production)
25,586 hectares
leased; 6,381
hectares owned
Permitted
Surface &
Underground
HCC, SCC,
PCI, Thermal
Various (Rangal
Coal Measures)
CPP1 - 1,100 raw
Mt per hour;
CPP2 - 1,200 raw
Mt per hour; Rail
Loadout
Buchanan
(Production)
25,853 hectares
leased
(3)
; 7,725
hectares owned
1 Permit
Underground
Low-Vol
Pocahontas #3
(Pocahontas
Formation)
CPP - 1,270 raw
Mt per hour; Rail
Loadout
Logan
(Production)
12,666 hectares
leased
(3)
; 69
hectares owned
27 Permits
Surface &
Underground
HVA, HVB,
Thermal
Various
(Kanawha
Formation)
CPP - 1,088 raw
Mt per hour; Rail
Loadout
Mon Valley
(Development)
1,339 hectares
leased
(3)
; 40,276
hectares owned
Not
Permitted
Underground
(4)
High-Vol
Upper Freeport
(Freeport
Formation)
Future
Russell County
(Development)
7,111
hectares
leased
(3)
; 378
hectares owned
Not
Permitted
Underground
(4)
High-Vol
Lower Castle
(Norton
Formation);
Upper Horsepen
(Middle Lee
Formation)
Future
(1)
facilities of the Company are secured by a lien on
substantially all of the Company’s assets, including
mining properties.
(2)
and licenses regarding cultural heritage, native
title and various other social issues to support
current mining operations.
(3)
of the relevant reserves.
(4)
Proposed mine type.
Coronado Global Resources Inc. Form 10-K December 31,
2024
71
Table 2.
Summary Coal Resources Exclusive of Reserves at End
of the Fiscal Year Ended December 31,
2024.
(1)
Coal Resources (In Situ, MMt)
(2)(3)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
Australia
Open cut
165
83
247
52
23.6%
0.6%
19.9%
Underground
41
62
103
106
18.6%
0.4%
18.1%
Total
Australia
206
145
350
158
United States
Buchanan
29
5
34
—
16.0%
0.8%
18.0%
Logan
30
41
71
3
17.0%
1.0%
31.0%
Mon Valley
—
—
—
—
—
—
—
Russell County
40
4
44
—
29.0%
0.7%
23.0%
Total
United States
99
50
149
3
Total
305
195
499
161
(1)
For more
information regarding price
assumptions used
in the
calculation of
coal resources
as of
December 31,
2024, see
the
individual property disclosures below.
(2)
Australian resources are estimated inclusive of 5.3%
in-situ moisture.
United States resources are estimated on a
dry basis.
(3)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Table
3.
Summary Coal
Reserves (Marketable
Sales Basis)
at End
of the
Fiscal Year
Ended December
31, 2024.
(1)
Demonstrated Coal Reserves (Wet
Tons,
Washed or Direct Shipped, MMt)
(2)(4)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
Australia
Open cut
163
15
177
12.9%
0.5%
19.3%
Underground
26
10
36
10.0%
0.3%
16.9%
Total
Australia
189
25
213
United States
Buchanan
78
6
83
6.0%
0.7%
20.0%
Logan
40
23
62
8.0%
0.9%
35.0%
Mon Valley
78
57
134
8.0%
1.2%
(3)
35.0%
Russell County
24
5
29
8.0%
0.9%
31.0%
Total
United States
220
90
310
Total
409
115
523
(1)
For more
information regarding
price assumptions
used in
the calculation
of coal
reserves as
of December
31, 2024,
see the
individual property disclosures below.
(2)
For more information regarding moisture assumptions used in the calculation of coal
reserves as of December 31, 2024, see the
individual property disclosures below.
(3)
Life-of-mine,
or
LOM,
sulfur
for
Pangburn
is
an
estimated
1.2%;
however,
overall
Mon
Valley
complex
reserve
average
is
1.4%sulfur.
(4)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Coronado Global Resources Inc. Form 10-K December 31,
2024
72
Curragh
Curragh is a
production-stage mining property that
consists of two
active, open cut,
surface mines (Curragh
North
and Curragh South) and one underground mine (Mammoth Underground).
Coal mine production at the Curragh
property
has
been
historically
accomplished
by
surface
mining
methods
since
the
mine’s
inception
in
1983.
Presently, coal mine production at the Curragh property is accomplished
by both surface mining methods
and a newly developed underground
mine. Curragh coals are widely
known for their low ash, low
to mid volatile
matter, low
sulfur and low
phosphorous content.
Curragh Met coal
products are
also known for
their consistent
delivered quality,
which supports
a consistent
offtake across
a diversified
market base.
A map
of the
Curragh
tenements is shown in Figure 3.
Figure 3.
Coronado Curragh Mine Complex Property Location
Map.
Coronado Global Resources Inc. Form 10-K December 31,
2024
73
The Curragh mine
complex is
located within the
Bowen Basin coalfields,
approximately 200
kilometers by road
west of Rockhampton, Queensland, Australia, and approximately 14 kilometers North of the town of Blackwater,
Queensland, Australia. The
coordinates of CPP1,
which is located
within Curragh Main,
are 688,561 meters
East,
7,400,933 meters North
in the AMG66 grid
system. Curragh owns
and operates the
necessary CPPs and
load-
out system
for dispatches
via Blackwater
rail line
to the
Port of
Gladstone or
the Stanwell
Power Station.
See
Item 1. “Business—Transportation
—Australian Operations” for
additional information regarding
the rail and port
services available to Curragh.
Curragh also has maintenance
facilities for the fleet
of mining equipment, as
well
as office
buildings for
the mine
staff and
personnel.
Established sealed
roads connect
the mine
to the
town of
Emerald, Queensland,
Australia,
to the
west and
the
Port of
Gladstone
to the
east.
Third-party
rail providers
operate the Blackwater rail line and transport
Curragh export coal, for sale to international customers, to
both the
RGTCT
and
the
WICET
at
the
Port
of
Gladstone.
Curragh
domestic
coal
is
loaded
onto
train
wagons
for
transportation to the Stanwell Power Station for power
generation.
Curragh has ready access
to water,
electricity and personnel
to support its operations.
SunWater Ltd.
supplies
raw water
to the mine
complex from
the Fairbairn
Dam via
the Bedford
Weir.
The mine complex
also recycles
water
from
on-site
dams
and
old
open-cut
pit voids
that
capture
rainfall
and
water
from
dewatering
activities.
Curragh has a dedicated
66-kilovolt, or kV,
power supply to support
the mining operations
with a capacity of
up
to 57-megawatt sourced from the
main grid power.
The substation is located on the
southwest corner of ML1878
with
both
66kV
and
22kV
distribution
networks
to
supply
the
draglines,
shovel
and
CPPs.
There
is
adequate
power
on
site
for
establishing
the
underground
mine
and
commencing
the
first
two
continuous
miner
units;
however,
upgrades
to
the
site infrastructure
are required
for full
underground
production
with
four
continuous
miner units.
The
MRA
and
the
MERCPA,
together,
provide
for
the
assessment,
development
and
utilization
of
mineral
resources
in
Queensland
to
the
maximum
extent
practicable,
consistent
with
sound
economic
and
land
use
management. The MRA vests ownership of minerals, with limited exceptions, in the “Crown,” which in relation to
Curragh,
is
the
Queensland
government.
A
royalty
is
payable
to
the
Queensland
government
for
the
right
to
extract
minerals.
The
MRA
also
creates
different
tenures
for
different
mining
activities,
such
as
prospecting,
exploring and
mining. A ML
is the
most important tenure,
as it permits
the extraction
of minerals
in conjunction
with other required authorities. The MRA imposes general conditions
on a ML.
Coronado
controls
the
coal
mining
rights
at
Curragh
under
14
coal
and
infrastructure
MLs
and
three
MDLs
granted pursuant
to the
MRA. We refer
to the
MLs and MDLs
at Curragh, collectively, as
the Tenements. Renewal
of certain Tenements
will be required during
the mine life of
Curragh and the Queensland
government can vary
the terms
and conditions
on renewal.
There are
a number
of existing
petroleum tenements
which overlap
with
the
Tenements.
The
priority,
consent
and
coordination
requirements
under
the
MRA,
MERCPA
and
the
Petroleum
and
Gas
(Production
and
Safety)
Act
2004
(Qld)
(as
relevant)
may
apply
with
respect
to
those
overlaps.
Extensive
statutory
protocols
govern
the
relationships
between
co-existing
mining
and
exploration
rights and these
protocols are largely focused
on encouraging the overlapping
tenement holders to negotiate and
formulate arrangements
that enable the
co-existence of
their respective
interests. To
date, we have
negotiated
arrangements in place with all of our overlapping
tenement holders and full access
to all of our Tenements.
See
Item 1. “Business—Regulatory Matters—Australia” for additional
information regarding Curragh’s Tenements.
Property control and mining rights at Curragh are entirely expressed in the MLs and MDLs mentioned above. An
overlapping
petroleum
tenure
exists
over
the
southern
and
eastern
extents
of
the
Tenements.
Under
the
MERCPA,
this
requires
annual
information
exchanges,
including
the
provision
and
maintenance
of
joint
information management
plans with the
overlapping tenement
holder.
Curragh is
compliant with the
legislation
and there are no current restrictions to coal mining.
As conditions to certain
of the Tenements, Curragh is subject to royalties payable
to the Queensland government
on a regulated tiered
structure introduced July
1, 2022. This tiered
royalty payment regime
is dependent on the
received AUD/t
revenue received
from the
coal sales,
and varies
from 7%
for up
to A$100/t
sales, up
to 40%
payable for
sales over
A$300/t. These
royalties are
in addition
to the
Stanwell rebate,
as described
in Item
1.
“Business—Customers—Stanwell.” Additionally, if MDL 162
advances from development
to production,
we would
be required to
pay under a
private royalty deed
a base royalty
of A$0.50 per
Mt of coal and
a royalty of
A$0.70
for every Mt of SCC produced above 2.5 MMt per year.
A joint venture between
Arco Australia Ltd., Australian Consolidated Industries
Ltd., R.W. Miller & Co.
and Mitsui
& Co. (Australia) first began development on certain
of the Tenements in 1983.
Later, Arco Australia Ltd. bought
out the
other joint
venturers
and, in
2000, sold
the Curragh
property to
Wesfarmers
Ltd. In
2014, Wesfarmers
acquired MDL 162 from Peabody Budjero Pty
Ltd.
Coronado acquired all the Tenements
from Wesfarmers Ltd.
in March 2018.
Production history has
been approximately 9.8
MMt in 2022,
10.0 MMt in
2023 and 9.6
MMt in
2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
74
Beginning
in the
1960’s,
various
tenement
holders
began prospecting
and exploratory
drilling
at Curragh.
We
currently
have
an
active,
ongoing
exploration
program
at
Curragh
that
allows
us
to
update
and
refine
the
geological
model
ahead
of
pit
development.
Recently,
we
have
increasingly
focused
on
an
underground
exploration program,
which has
included seismic
2-D
and 3-D
surveys and
core drilling
for gas,
geotech, coal
quality
and
spontaneous
combustion
evaluation.
Additional
exploration
has
included
permeability
and
hydrological assessments.
Open cut coal mine development
at the Curragh property is presently
accomplished by surface mining methods
and has been so historically
since the mine’s inception.
The mine characteristics and output
levels allow it to be
ranked as
a large
coal operation
when compared
to domestic
producers in
Australia and
worldwide.
Curragh
operates four large electric draglines, one large electric
shovel and additional fleets of hydraulic excavators.
Curragh has two CPPs,
CPP1 and CPP2.
CPP1 is the oldest
of the two
processing plants and has
a documented
nameplate
capacity
of
1,100
raw
tons
per
hour,
or
tph
(as
received).
CPP2
has
a
documented
nameplate
capacity
of
1,200
tph
(as
received)
with
a
capability
of
up
to
1350
tph
when
processing
selected
feed
types.
Curragh has a loadout facility for loading coal onto railcars,
which is connected to the main Blackwater rail link.
Generally, the mining equipment and facilities at Curragh are in good operating condition.
We focus on the long-
term
potential
of
the
mine
complex
and
regularly
monitor
developments
in
the
mining
industry
for
technology
improvements and
new equipment
that could
help us
increase efficiency
and lower our
costs. Curragh’s
oldest
mining
equipment,
including
two
draglines,
began
operations
in
1983.
Prior
to
Coronado
taking
over
mining
operations,
Wesfarmers
Ltd.
made
improvements
to
the
processing
facilities
at
Curragh,
including
the
commissioning of the second CPP
in 2012 and replacing the raw
coal crushing system at Curragh
Main with an
updated circuit
in 2016.
Wesfarmers Ltd.
also started
a corrosion
and structural
repair program
over ten
years
ago that
has continued
since acquisition.
This program
helps ensure
that the
assets are
available well
into the
future. From time to time, we also
update and improve other equipment and facilities to maintain their usefulness
and optimize our competitiveness. As of December 31, 2024, the book value of Curragh and its associated plant
and equipment was $717.5 million.
Underground mining
commenced at
the Mammoth
Underground Mine
in late
2024 via
the final
highwall in
the
Curragh North open pit mine. The underground mining method being used at Mammoth is bord and pillar mining
using primary extraction of
panels with roadway widths
of 6.5 meters, reducing
to 6 meters where
the overburden
thickness or
mining conditions
require. There
is a
phased
production ramp
up planned
through 2025,
with
full
production expected
in 2026
from the
Mammoth Underground
Mine. Underground
mining is
planned initially
in
the Mammoth
seam across
three mining
areas: Mammoth
South, Central
and North.
From 2034
underground
mining will transition
to a lower
seam called the
Mackenzie seam and
mine out the
remining reserves from
this
lower seam to end of mine life which is currently approximately
20 years in total.
We are
not aware of
any significant
encumbrances or
defects in title
with respect
to the Curragh
property.
We
believe
we
have
secured
all
applicable
environmental
licenses
and
permits
under
both
Queensland
and
Australian Commonwealth
legislation and
have all
permits and
licenses regarding
cultural heritage,
native title
and various
other social
issues. See
Item 1.
“Business—Regulatory Matters—Australia”
for a discussion
of the
permitting conditions applicable to Curragh.
Summaries of Curragh’s
coal resources
and reserves estimates as
of December 31, 2024
and 2023 are shown
in Tables
4 and 5, respectively.
Coronado Global Resources Inc. Form 10-K December 31,
2024
75
Table
4.
Curragh
–
Summary
of
Coal
Resources
Exclusive
of
Reserves
at
the
End
of
the
Fiscal
Year
Ended December 31, 2024 and 2023.
(1)
Coal Resources
(Wet Tons, In Situ, MMt)
(2)(3)(4)(5)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2024
Open Cut
165
83
247
52
23.6%
0.60%
19.9%
Underground
41
62
103
106
18.6%
0.40%
18.1%
Total
206
145
350
158
December 31, 2023
Open Cut
167
81
247
54
22.9%
0.60%
19.1%
Underground
41
62
103
106
18.6%
0.40%
18.1%
Total
208
143
350
160
(1)
Curragh determines the resources exclusive of reserves below a 15:1
in-situ strip ratio as being suitable for
open pit mining, and
above 15:1 in-situ strip ratio being suitable for underground
mining with a minimum seam thickness of 1.8
meters.
(2)
There are resources suitable for open
cut mining outside of the declared
reserves.
The initial economic assessment
for resources
exclusive of reserves
as of December
31, 2023, and
2024 assumed the
same revenue pricing
based on an
assumed long-term
average realized sales
price of $133
per Mt (FOB
for the open
cut resources and
$140 per Mt
(FOB for the
underground resources.
This is explained further in Section 11.5 of the Curragh TRS.
(3)
Table 1-1 of the Curragh TRS provides a summary of Curragh resource tons inclusive
of reserve tons as of December 31, 2023.
(4)
Reported on a 5.3% in-situ moisture basis.
(5)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Table
5.
Curragh –
Summary of
Coal Reserves
(Marketable
Sales Basis)
at the
End of
the Fiscal
Year
Ended December 31, 2024 and 2023.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)(3)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2024
Open Cut
163
15
177
12.9%
0.5%
19.3%
Underground
26
10
36
10.0%
0.3%
16.9%
Total
189
25
213
December 31, 2023
Open Cut
173
16
189
12.2%
0.5%
19.5%
Underground
25
9
34
10.0%
0.3%
16.9%
Total
198
25
223
(1)
Based on
long-term revenue
pricing assumption
data outlined
by Coronado
described in
Section 16
of the
Curragh TRS.
The
pricing data for both December
31, 2023 and 2024 assumes
an average realized revenue price
of $131 per Mt sold over
the LOM.
(2)
The open cut marketable reserves are reported on a
9.5% product moisture basis and the underground marketable reserves are
reported on a 10% product moisture basis.
(3)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
From December 31, 2023, to December 31, 2024, measured
and indicated resources exclusive of reserves had
some minor
variances but
remained the
same in
total year
on year
at 350
MMt. From
December 31,
2023, to
December 31, 2024, total
marketable coal reserves decreased
by 10 MMt in line
with production depletion from
the Curragh open cut
operations as well
as some minor
variances to the coal
product profile over
the LOM due
to product coal flow optimization.
Barry Lay,
BSc Geology (Hons);
MAusIMM of Resology
Pty Ltd, Daniel
Millers, B. Eng.;
MAusIMM(CP), who
is
employed full-time as the Superintendent Long Term
Planning of our subsidiary, CCPL, and Claire McGahan, B.
Eng.; MAusIMM(CP); Talisman Technical Pty Ltd, whom we
refer to, collectively, as the
Australian QPs, prepared
the
estimates
of
coal
resources
and
reserves
summarized
in
Tables
4
and
5.
A copy
of
the
Australian
QPs’
technical report
summary,
or TRS,
with respect
to Curragh,
dated February
16, 2024,
or the
Curragh TRS,
is
filed as Exhibit 96.1 hereto. None
of Mr. Barry Lay, Resology Pty Ltd, Claire McGahan or Talisman Technical
Pty
Ltd are affiliated with Coronado.
Coronado Global Resources Inc. Form 10-K December 31,
2024
76
The Australian QPs prepared the estimates of Curragh
coal resources and reserves using drilling data available
from exploration
activities at
Curragh conducted
by numerous
entities over
time.
Most of
this information
was
obtained prior to our
acquisition of Curragh,
using varying drilling and
core-logging techniques, survey
methods
and testing procedures.
As a
result, in verifying
the data,
the Australian
QPs made
certain assumptions
about
the adequacy of the
processes performed and
comparability of the data
based on their professional
experience
and familiarity with Curragh.
Per
Section
12.1
of
the
Curragh
TRS,
coal
reserve
estimates
were
classified
as
proven
or
probable,
with
consideration given to
“modifying factors,”
including mining, processing,
metallurgical, infrastructure,
economic,
marketing, legal,
environmental, social
and governmental
factors. Section
22.2 of
the Curragh
TRS includes
a
risk
assessment
of
the
key
modifying
factors
that
could
potentially
impact
the
operations
and
therefore
the
estimate of coal reserves and resources.
As
summarized
in
Section
7.1
of
the
Curragh
TRS,
the
concentration
of
exploration
drill
holes
varies
slightly
across the Curragh
property.
The location of
the drilling
is shown on
the maps
included in Section
7.
Points of
observation include
exploration drill
holes, degas
holes and
mine measurements,
which have
been fully
vetted
and
processed
into
a
geological
model.
The
geological
model
is
based
on
seam
depositional
modelling,
the
interrelationship
of
overlying
and
underlying
strata
on
seam
mineability,
seam
thickness
trends, the
impact
of
seam structure (i.e., faulting), intra-seam
characteristics, etc.
Section 11.6
of the Curragh TRS summarizes
the
drill hole spacings and accuracy associated with each
resource category.
Coal quality is instrumental
in determining whether there
are reasonable prospects
for economic extraction of
a
coal resource
and
the economic
viability
of a
coal
reserve.
These quality
attributes
aided
in converting
in-situ
resource tons to
demonstrated coal
reserves (recoverable washed
tons). The reserve
and resource criteria
are
presented in
Sections 12.1
and 11.3,
respectively,
of the Curragh
TRS, including
assumptions related
to seam
density, minimum
cut-off thickness, and recoveries.
Pricing data as provided
by Coronado is described in
Table
16.2 of the Curragh TRS.
These are weighted-average realized values across
the LOM schedule.
Regarding
production
rates
as
described
in
Section
13
of
the
Curragh
TRS,
the
mine
plan
and
productivity
expectations
consider
historical
performance
and
efforts
have been
made to
adjust
the plan
to
reflect
current
technology and future
conditions. Additional mine-specific factors
can be found
in Section 13
of the Curragh
TRS.
Buchanan
Buchanan
is
a
production-stage
mining
property,
consisting
of
one
active
underground
mine
and
supporting
infrastructure that
produces Low-Vol
Met coal using
the longwall
mining method.
The mine complex
is located
in Buchanan County in southwest Virginia.
A map of Buchanan is shown in Figure 4.
Figure 4.
Coronado Buchanan Mine Complex Property Location
Map.
Coronado Global Resources Inc. Form 10-K December 31,
2024
77
The Buchanan
mine complex
is located
approximately
6.4 kilometers
southeast of
Oakwood, Virginia,
and 16
kilometers
southeast
of
Grundy,
Virginia.
The
coordinates
of
the
Buchanan
CPP
are
latitude
37°
09'
40"
and
longitude 81° 59' 13"
(Easting 984,100’, Northing 320,100’
– in the VA
State Plane South NAD
83 grid system).
The
nearest
major
population
centers
are
Roanoke,
Virginia,
and
Lexington,
Kentucky,
which
are
about
153
kilometers northeast
and 290
kilometers northwest
of the
property,
respectively.
From U.S.
Route 460,
which
runs
through
Oakwood,
a
well-developed
network
of
improved
and
unimproved
roads provides
access
to
the
property.
The surface facilities
at Buchanan are
located along a
Norfolk Southern rail
line, which serves
as the
primary means
of transport for
produced coal.
Norfolk Southern transports
coal from
the Buchanan mine
complex
either
to
domestic
customers
or
to
Lamberts
Point
Coal
Terminal
Pier
6
in
Norfolk,
Virginia,
for
overseas
shipment.
Buchanan
has
ready
access
to water,
electricity
and
personnel
to
support
its operations.
The
mine
complex
sources water from streams that
flow over Company-owned property.
The mine also utilizes ground
water from
an old, abandoned mine.
Electricity is sourced from American Electric Power.
Personnel have historically been
sourced
from
the
surrounding
communities
in
Buchanan,
Tazewell,
McDowell
and
Pike
Counties
and
have
proven to be adequate in numbers
to operate the mine complex.
As mining is common in the surrounding
areas,
the workforce is generally familiar with mining practices,
and many are experienced miners.
The property mineral rights are composed of approximately 33,578 total hectares, of which 25,853 are leased or
subleased from private landholders under approximately 150 individual coal lease tracts, and
7,725 hectares are
owned by Coronado.
Subject to Coronado’s exercising
its renewal rights thereunder,
all the leases expire upon
exhaustion of the relevant coal reserves, which is expected
to occur in 2043.
Under the
terms of
the relevant
leases, we
are required
to pay
royalties ranging
from 3%
to 6%
of the
selling
price
of
coal
mined
from
the
corresponding
leasehold
and,
for
the
majority,
an
annual
minimum
royalty,
irrespective of
production.
Coal produced
at Buchanan,
however,
is not
subject
to “wheelage
fees”
(i.e., fees
payable on coal
mined and
removed from properties
other than
the particular
leasehold and hauled
across the
leasehold premises).
The
property
was
formerly
controlled
by
Consolidation
Coal
Company,
or
CONSOL.
Mine
development
was
started by
CONSOL in
1983,
and longwall
production began
in 1987.
Coronado acquired
the Buchanan
Mine
from CONSOL in March 2016.
Production history has been approximately 3.9
MMt in 2022, 3.6 MMt
in 2023 and
3.5 MMt in 2024.
Our right
to commercially
mine and
recover coal
reserves at
Buchanan overlaps
with the
right of
an affiliate
of
CNX Resources Corporation, which we refer to as the Gas Party,
to commercially recover and develop coal gas
interests
from
the
mine
area.
The
Gas
Party
and
we
have
entered
into
certain
agreements
to
regulate
the
interaction between, and coordinate, our
respective operations.
In general, the combination of
these overlapping
interests allows
for mutual
benefits to
the parties,
namely,
the degassing
of our
coal mining
operations
in
the
mine, which helps assure the safety of mine
personnel, and the Gas Party’s
commercial capture and sale of the
coal gas.
In addition, the Gas Party’s drilling activities have contributed to exploration efforts with respect to coal
deposits at Buchanan.
As the only natural gas supplier in
the area, we purchase our requirements of
natural gas
for the operation of our thermal dryer at Buchanan from
the Gas Party.
Before
Coronado
took
over
mining
operations
at
Buchanan,
CONSOL
Energy
had
conducted
extensive
exploration of the property.
We have continued
exploration at the property
through a program of
core drilling to
confirm reserves, establish additional resources
and assess the geotechnical viability of mining.
Buchanan
produces
primarily
a
Low-Vol
HCC,
but
it
also
produces
a
premium
Low-Vol
PCI
product.
The
Buchanan mine
extracts coal
from the
Pocahontas #3
seam of
the Pennsylvanian-age
Pocahontas Formation,
which is the principal minable coal seam
of that formation.
The seam is situated below drainage
throughout the
Property and is accessed by vertical shafts.
The seam thickness averages 1.57 meters within the mining
area.
Coronado Global Resources Inc. Form 10-K December 31,
2024
78
The
Buchanan
mine
currently
extracts
coal
using
two
longwall
systems
supported
by
six
continuous
miner
sections, which develop main entries and gate roads in preparation for the longwall. A seventh continuous miner
section is
expected to
begin in
2026.
Each continuous
miner section
is equipped
with one
or two
continuous
miners, two roof bolters
and two or three
coal haulage units.
After extraction, a series
of conveyor belts deliver
raw coal
to an
underground storage
bunker.
The Buchanan
mine complex
uses a
skip hoist
system to
lift raw
coal to the surface.
Buchanan has a CPP
that processes raw
coal at a rate
of approximately 1,270 raw
tph, as
well as the other necessary
support infrastructure, including loadout
and portal facilities. Coronado’s
2023 long-
term production forecast
included the construction
of a new coal
preparation plant at
Buchanan and associated
coal production volumes; however, this has
been removed from the
2024 production forecast due
to lower pricing
environment and to
allow for additional
option analysis.
A new plant remains
under consideration and
as such,
future
production
volume
forecasts
will
be
re-evaluated
and
updated
to
reflect
any
corresponding
capacity
increases.
Generally,
the mining
equipment
and facilities
at Buchanan
are in
good operating
condition.
We focus
on the
long-term potential of
the mine complex and
regularly monitor developments in
the mining industry for
technology
improvements and
new equipment
that could
help us
increase efficiency
and lower
our costs.
Since acquiring
the Buchanan
operations,
we have
implemented
improvements
at the
CPP,
which
have resulted
in increased
capacity.
From
time
to
time,
we
also
update
and
improve
other
equipment
and
facilities
to
maintain
their
usefulness
and
optimize
our
competitiveness.
For
example, we
rebuild
our longwall
shear,
drives
and cycling
shields after every panel. We
have also entered into life
cycle management agreements for our
continuous miner
equipment, installed programmable logic controller,
or PLC, controls on the skip hoist system, upgraded our belt
drives for increased horsepower, deployed state-of-the-art Fletcher roof
bolters on our continuous miner
sections
and switched
to
PLC
control
systems
and variable
frequency
drive,
or VFD,
starters
on our
belt
drives.
As
of
December 31, 2024, the book value of Buchanan and its
associated plant and equipment was $533.5 million.
We
are
not
aware
of
any
significant
encumbrances
or
defects
in
title
with
respect
to
the
Buchanan
property.
Additionally,
we believe we
have obtained
all requisite mining
and discharge
permits to conduct
our operations
at Buchanan and expect
to be able
to obtain all required
permits in the future.
The Buchanan mine complex
holds
one state permit, with the associated NPDES permit.
Buchanan is
subject to
a federal
black lung
excise tax
of $1.21
per ton
for underground
mining and
a federal
reclamation tax of $0.13 per ton
for underground mining.
However, the federal black lung excise tax applies only
with respect
to coal
sold domestically.
Additionally,
Buchanan is
subject to
a Virginia
reclamation tax
of $0.05
per ton (which amount is contributed to a state-funded bond pool) and a Virginia severance tax of 2% for all coal
sold. See
Item 1.
“Business—Regulatory
Matters—United States”
for a
discussion of
the permitting
conditions
applicable to Buchanan.
Summaries of Buchanan’s coal resources and reserves as of December 31,
2024 and 2023 are shown in Tables
6 and 7, respectively.
Table
6.
Buchanan –
Summary of
Coal Resources
Exclusive of
Reserves at
the End
of the
Fiscal Year
Ended December 31, 2024 and 2023.
(1)
Coal Resources (Dry Tons, In Situ, MMt)
(2)(3)(4)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2024
29
5
34
—
16.0%
0.8%
18.0%
December 31, 2023
31
4
35
—
16.0%
0.8%
18.0%
(1)
Pricing for
resources is
described in
Section 11.3.1
of the
Buchanan TRS
(as defined
below).
Based on
assumed long-term
average price of $143 per Mt (FOB
loadout) for Buchanan resources as
of December 31, 2023 and
$143 per Mt (FOB loadout) for
resources at
December 31,
2024, representing the
long-term average price
forecast for
Buchanan based on
independent price
forecasts.
(2)
Exclusive of reserve
tons. Table
1-1 of the
Buchanan TRS provides
a summary of
Buchanan resource tons
inclusive of reserve
tons as of December 31, 2024.
(3)
Reported on a dry basis.
Surface moisture and inherent moisture are excluded.
(4)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Coronado Global Resources Inc. Form 10-K December 31,
2024
79
Table
7.
Buchanan – Summary
of Coal Reserves
(Marketable Sales Basis)
at the End of
the Fiscal Year
Ended December 31, 2024 and 2023.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)(3)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2024
78
6
83
6.0%
0.7%
20.0%
December 31, 2023
87
5
92
6.0%
0.7%
20.0%
(1)
Pricing data as provided by Coronado is described
in Section 16.2 of the Buchanan TRS For Buchanan
reserves as of December
31, 2023, the pricing data assumes a weighted average domestic and
international FOB-mine price of approximately $172 per Mt
for calendar
year 2024;
the weighted
average price
decreases to
approximately $138
to
$145
per Mt
through year
2028 and
averages approximately $173 per Mt over the LOM.
For Buchanan reserves as of December 31, 2024, the pricing data assumes
a weighted average
domestic and international
FOB-mine price of
approximately $142 per
Mt for calendar
year 2025; the weighted
average price decreases to approximately $132 to $139 per Mt through year 2029 and averages approximately $157 per Mt over
the LOM.
(2)
Reported on a 6.0% moisture basis.
(3)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
From
December
31,
2023,
to
December
31,
2024,
total
reserves
decreased
approximately
10%,
from
approximately
92.0
MMt
to
approximately
83.0
MMt.
This
net
reduction
of
9.0
MMt
of
total
reserves
was
attributable to
a combination
of updates
to the
mine plan
along with
one year
of mining
depletion. A
TRS with
respect to Buchanan, updating the TRS with respect
to Buchanan filed with Coronado’s Annual
Report on Form
10-K for the
year ended December
31, 2024, was
prepared in February
2025 due to
material differences
in the
key financial modifying factors, including mining plans, coal sales price assumptions, operating costs and capital
costs from
December 31, 2023,
to December 31,
2024. Mining plans
are discussed in
Section 13 of
the Buchanan
TRS. Coal sales price assumptions underlying the reserve estimates are discussed in Sections
12 and 16 of the
Buchanan
TRS,
while
operating
costs
and
capital
costs
assumptions
underlying
the
reserve
estimates
are
discussed in Sections 18 and 19
of the Buchanan TRS.
The differences in the key financial modifying factors
did
not have
a material
impact on
the reserve
estimates from
December 31,
2023, to
December 31,
2024.
From
December 31, 2023 to December 31, 2024, measured and
indicated resources decreased by approximately 3%,
and is attributable to one
year of mining depletion along with
changes to the mine plan.
Updated financial inputs,
including coal
sales price assumptions
and operating and
capital costs used
in estimating the
resources exclusive
of reserves, as discussed in Section 11.3 of the Buchanan TRS, did not have a material impact on
the measured
and indicated
resource estimates as
of December
31, 2024,
as compared
to the
measured and
indicated resource
estimates as of December 31, 2023.
Marshall Miller
& Associates,
Inc., a
third-party
firm comprising
mining
experts, whom
we refer
to as
the U.S.
QPs, prepared the estimates
of coal resources and reserves
as of December 31, 2024
summarized in Tables
6
and 7.
A copy of the
U.S. QPs’ TRS with
respect to Buchanan, dated
as of February 1,
2025,
or the Buchanan
TRS, is filed as Exhibit 96.2 hereto. The U.S. QPs are
not affiliated with Coronado.
The
U.S.
QPs
prepared
the
estimates
of
coal
resources
and
reserves
using
core
drilling
data
available
from
exploration
activities
at
Buchanan
conducted
by
numerous
entities
over
time.
Most
of
this
information
was
obtained
prior
to
our
acquisition
of
the
property,
using
varying
drilling
and
core-logging
techniques,
survey
methods and testing
procedures.
As a result,
in verifying the
data, the U.S.
QPs made certain
assumptions about
the adequacy of the
processes performed and
comparability of the data
based on their professional
experience
and familiarity with Buchanan.
Per
Section
12.1
of
the
Buchanan
TRS,
coal
reserves
were
classified
as
proven
or
probable
considering
“modifying
factors,”
including
mining,
metallurgical,
economic,
marketing,
legal,
environmental,
social
and
governmental factors.
Section 22.2
of the
Buchanan TRS includes
a risk
assessment of the
key modifying factors
that could potentially impact the operations and therefore the
estimate of coal reserves and resources.
Coronado Global Resources Inc. Form 10-K December 31,
2024
80
As summarized in Section 7.1 in the Buchanan TRS, the U.S. QPs utilized
approximately 16,000 available core,
rotary,
channel
samples,
mine
measurements
and
coalbed
methane
wells
on
and
around
the
Buchanan
property.
Points of observation
include exploration drill
holes, degas holes,
and mine measurements,
which have
been
fully
vetted
and
processed
into
a
geologic
model.
The
geologic
model
is
based
on
seam
depositional
modeling, the
interrelationship
of overlying
and underlying
strata
on seam
mineability,
seam
thickness
trends,
the
impact
of
seam
structure
(i.e.,
faulting),
intra-seam
characteristics,
etc.
The
U.S.
QPs
completed
a
geostatistical analysis
on drill holes
within the reserve
boundaries to determine
the applicability
of the common
United States classification system for
measured and indicated coal resources.
As summarized in Section 11.1
of the Buchanan TRS, these results
have led the U.S. QPs to
report the data following the historical
classification
standards, rather than use the results of the
DHSA.
Coal quality is
instrumental in determining
the viability of
a coal deposit.
Per Section 8.2
of the Buchanan
TRS,
coal
quality
conforms
to
the
American
Society
for
Testing
and
Materials,
or
ASTM,
standards.
These
quality
attributes aided
in converting
dry,
in-place tons
to demonstrated
coal reserves
(recoverable washed
tons). The
reserve and resource
criteria are presented
in Table
11-1
of the Buchanan
TRS, including assumptions
related
to seam density, minimum
cut-off thickness, and recoveries.
Regarding production
rates as
described in
Section 13.2
of the Buchanan
TRS, the
mine plan
and productivity
expectations
reflect
historical
performance
and
efforts
have
been
made
to
adjust
the
plan
to
reflect
future
conditions.
Mine development and operation have not been
optimized within the Buchanan TRS.
Logan
Coronado’s Logan property is
currently in the
production stage.
Logan consists of four
active underground mines
and supporting
infrastructure that
produce High-Vol
Met coal
using the room
and pillar mining
method and
two
active surface mines
(Toney
Fork and Elklick)
and supporting
infrastructure that
produce both
Met and thermal
coal using the
contour and
highwall mining
methods. Underground
mine operations
were active during
2024 at
the
Powellton
No.
1,
Lower
War
Eagle,
Eagle
No.
1
and
Muddy
Bridge
Mines
with
one,
three,
three
and
two
active mining
sections, respectively.
The Logan
complex life
plan includes
13 proposed
mines, consisting
of
ten underground mines
and three surface
mines. The property
is located in
Boone, Logan and
Wyoming Counties
in southern West Virginia.
The surface facilities are located in Logan
County, West
Virginia.
A map of Logan is
shown in Figure 5.
Figure 5.
Coronado Logan Mine Complex Property Location
Map.
Coronado Global Resources Inc. Form 10-K December 31,
2024
81
The Logan
mine complex
encompasses the
towns of
Lorado and
Pardee in
Logan County,
West Virginia,
and
Cyclone and Lacoma in Wyoming County,
West Virginia. The coordinates
of the Saunders CPP are latitude
37°
47' 58" and longitude 81° 40' 01" (Easting 1,806,880’, Northing
291,517’ – in the WV State Plane South NAD 27
grid system). The nearest
major population centers are
Huntington, West Virginia, and Charleston,
West Virginia,
which are about 145 kilometers northwest and 129 kilometers northeast of the property, respectively.
From U.S.
Route
119,
which
runs
through
Mingo,
Logan
and
Boone
Counties
to
the
north,
a
well-developed
network
of
improved and
unimproved roads
provides access
to the
property,
including Route
16 and
Route 10,
which run
east-west across the property in Logan County and Wyoming
County, respectively.
The Logan surface facilities
are located approximately 21 kilometers northeast
of Man, West Virginia, along
a CSX Corporation, or CSX, rail
line, which serves as
the primary means of
transport for produced
coal.
CSX transports coal from
Logan either
to domestic customers or to the Kinder Morgan Pier IX and
Dominion Terminals
in Norfolk, Virginia, for overseas
shipment.
Logan has
ready access
to water, electricity
and personnel
to support
its operations.
Buffalo Creek Public
Service
District supplies
water and
American Electric
Power supplies
electricity
to the
mine complex.
Mine personnel
generally live in the surrounding communities of Logan,
Boone, Wyoming and Mingo Counties in West
Virginia.
The
property
mineral
rights
are
composed
of
12,735
total
hectares,
12,666
of
which
are
leased
from
private
landholders
under
approximately
14
individual
leases,
and
69
hectares
are
owned
by
Coronado.
Subject
to
Coronado
exercising
its renewal
rights
thereunder,
a
majority
of
the
leases,
covering
a
majority
of
the
Logan
reserves, expire upon
exhaustion of the
relevant coal reserves,
which is expected
to occur in
2057.
One lease
expires in 2032; however,
Coronado is projected to have previously exhausted th
e
reserves covered thereby.
Under the terms of the leases, we are required to pay royalties ranging from 3.0% to 9.0%
of revenue from sales
of coal
produced depending
on mining
method. Certain
of the
leases also
provide for
“wheelage fees”
ranging
from 0.25% to 1.0%
of revenue from
sales of coal
mined and removed
from properties other
than the particular
leasehold and hauled across the leasehold premises.
The mining of
Logan was commenced in
1945 by Lorado
Mining Company, or Lorado. Lorado was
sold to Buffalo
Mining Company
in 1964
and then
to Pittston
Coal Company
in 1971.
Pittston operated
the property
until the
early 1990’s.
After being idle for
a period, the property
was then sold to
Addington Resources in
2004.
Imagin
Natural
Resources
acquired
the
property
in
2007
and
sold
it
to
Cliffs
Natural
Resources Inc.
(now
known
as
Cleveland-Cliffs Inc.) in 2011,
which in turn sold
the property to Coronado
in 2014. Production history
has been
approximately 2.1 MMt in 2022, 2.5 MMt in 2023 and 2.1
MMt in 2024.
Before
Coronado
acquired
Logan,
previous
owners
had
conducted
extensive
exploration
on
the
property.
Coronado
has
continued
exploration
at
the
property
through
a
program
of
core
drilling
to
confirm
reserves,
establish additional resources and assess the geotechnical
viability of mining.
Logan
produces
primarily
High-Vol
Met
coal
(HVA
HCC
and
HVB
HCC),
mined
from
various
seams
of
the
Kanawha Formation. A
few of the seams
lie below drainage;
however, a
substantial number of
Met coal seams
are situated above drainage. Logan also produces thermal coal
from upper portions of the Kanawha Formation.
As of December
31, 2024, underground
mine operations were
active at the
Powellton No. 1,
Lower War
Eagle,
Eagle No. 1 and
Muddy Bridge Mines
with one, three,
three and two active
mining sections, respectively,
using
the room and pillar method.
All sections of the active underground mines at Logan are configured as
full super sections, with two continuous
miners per
section.
Each section
also has
two roof
bolters, four
shuttle cars
and two
scoops.
From the
continuous
miner at the production face, the shuttle cars haul extracted coal to a feeder breaker, which transfers raw coal to
a conveyor
belt for
transport
to a
surface stockpile
holding area.
A shared
overland conveyor
carries raw
coal
from the Powellton No. 1 and Lower War Eagle mines to a CPP. Trucks
haul raw coal from the Eagle No. 1 mine
to the CPP and from the Muddy Bridge mine to the Logan overland conveyor.
The CPP has a feed rate capacity
of 1,088 raw tph.
The CPP site includes raw coal storage, clean coal storage, a loadout connected to a CSX rail
line and refuse disposal area.
The
Toney
Fork
and
Elklick
surface
mines
extract
Met
and
thermal
coal
using
the
contour
and
area
mining
methods.
The
mines
use
spreads
of
front-end
loaders,
large
tractors/dozers
and
rock
trucks
to
remove
overburden and expose the coal. We
will deploy highwall mining when
overburden volumes exceed economical
stripping ratios associated with area and
contour mining. Trucks haul raw coal from Toney Fork and Elklick to the
CPP site for cleaning or to the loading site to be shipped
directly to customers.
Coronado Global Resources Inc. Form 10-K December 31,
2024
82
Our
current
plans
at
Logan
contemplate
13
proposed
mines,
consisting
of
ten
underground
mines
and
three
surface mines,
including the
six mines
currently in
operation.
The proposed
underground mines
would extract
coal using
the room
and pillar
mining method,
and the
proposed surface
mines would
extract coal
using area,
contour or highwall mining methods, or some combination thereof.
Generally,
the mining equipment
and facilities at Logan
are in good operating
condition.
We focus on the
long-
term
potential
of
the
mine
complex
and
regularly
monitor
developments
in
the
mining
industry
for
technology
improvements
and
new
equipment
that
could
help
us increase
efficiency
and
lower
our costs.
Logan’s
oldest
mining
equipment
and
facilities,
including
the
CPP
and
loadout
facility,
began
operations
in
2008,
when
the
Powellton
No.
1
mine
started
production.
Since
acquiring
the
Logan
operations,
we
have
implemented
improvements
at the
CPP,
which have
resulted in
increased capacity.
From time
to time,
we also
update and
improve
other
equipment
and
facilities
to
maintain
their
usefulness
and
optimize
our
competitiveness.
As
of
December 31, 2024, the book value of Logan and its associated
plant and equipment was $223.4 million.
We are
not aware
of any significant
encumbrances or
defects in title
with respect
to the property.
Additionally,
we believe we have obtained all requisite
mining and discharge permits to conduct
our operations at Logan and
expect to be
able to obtain
or renew all
required permits
in the future.
The Logan
mine complex holds
27 state
permits with associated NPDES permits.
Logan is subject to a federal black lung excise tax of $1.21 per ton for underground mining and $0.61 per ton for
surface and highwall mining; however, this
tax applies only with respect to coal sold domestically.
Logan is also
subject to a
federal reclamation
fee of $0.13
per ton
for underground
mining and
$0.31 per ton
for surface
and
highwall mining.
Additionally,
Logan is subject to
a West Virginia
reclamation tax of
$0.308 per ton and
a West
Virginia severance
tax of
1.0% to
5.0% of
revenues for
all coal
produced. See
Item 1.
“Business—Regulatory
Matters—United States” for a discussion of the permitting
conditions applicable to Logan.
Summaries of Logan’s
coal resources and
reserves as of
December 31, 2024
and 2023 are
shown in Tables
8
and 9, respectively.
Table 8.
Logan – Summary of Coal Resources Exclusive
of Reserves at the End of the
Fiscal Year Ended
December 31, 2024 and 2023.
(1)
Coal Resources (Dry Tons, In Situ, MMt)
(2)(3)(4)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2024
30
41
71
3
17.0%
1.0%
31.0%
December 31, 2023
39
36
75
3
17.0%
1.0%
31.0%
(1)
Pricing for resources is described in Section
11.3.1 of the
Logan TRS (as defined below).
For Logan resources as of December
31,
2023,
based
on
assumed
long-term
average
price
of
$154
per
Mt
(FOB
loadout)
for
underground-mineable
resources,
representing the
long-term average price
forecast for
HVB provided by
Coronado; surface resources
were assessed
at a
sales
price of $83 per Mt (FOB loadout) based on estimated historical pricing for Coronado’s surface
operations.
For Logan resources
as of December
31, 2024, based on
assumed long-term average price
of $176 per
Mt (FOB loadout)
for underground-mineable
resources, representing the long-term average
price forecast for HVB provided by
Coronado; surface resources were assessed
at
a sales price of $99 per Mt (FOB loadout)
based on estimated historical pricing for Coronado’s surface
operations.
(2)
Exclusive of reserve tons. Table 1-1 of the Logan TRS provides
a summary of Logan resource tons
inclusive of reserve tons as of
December 31, 2024.
(3)
Reported on a dry basis.
Surface moisture and inherent moisture are excluded.
(4)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Coronado Global Resources Inc. Form 10-K December 31,
2024
83
Table 9.
Logan – Summary
of Coal Reserves
(Marketable Sales Basis)
at the End
of the
Fiscal Year Ended
December 31, 2024 and 2023.
(1)
Demonstrated Coal Reserves (Wet
Tons,
Washed or Direct Shipped, MMt)
(2)(3)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2024
40
23
62
8.0%
0.9%
35.0%
December 31, 2023
55
16
71
8.0%
0.9%
35.0%
(1)
Pricing data as
provided by Coronado is
described in Section
16.2 of the
Logan TRS.
For Logan reserves
as of December
31,
2023, the pricing data
assumes respective HVA,
HVB and thermal FOB-mine prices
of approximately $162, $144, and
$120 per
Mt for calendar year
2024.
HVA, HVB,
and thermal prices respectively decrease to
approximately $161, $143, and $114
per Mt
through year 2026, and then
increase to $308, $273, and $212
per Mt through year 2057.
For Logan reserves as of
December 31,
2024, the pricing data assumes respective HVA, HVB and thermal
FOB-mine prices of approximately $171,
$151, and $80 per Mt
for calendar year
2025.
HVA, HVB, and thermal
prices respectively
decrease to approximately
$162, $144,
and $83 per
Mt through
year 2027, and then increase to $306, $271, and
$150 per Mt through year 2057.
(2)
Reported on a 4.5% - 6.0% moisture basis.
(3)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
From December
31, 2023
to December
31, 2024,
total reserves
have decreased
by 12%.
This change
in
the
number of total reserves was attributable to
a combination of updates to the mine plans,
including conversion of
select
resources
to
reserves,
along
with
one
year
of
mining
depletion.
In
addition,
one
mineral
sublease
containing reserves
expired.
A TRS
with respect
to Logan,
updating the
TRS with
respect
to Logan
filed with
Coronado’s Annual Report on
Form 10-K for
the year ended
December 31, 2024, was
prepared in February 2025
due to
material differences in
the key financial
modifying factors including
coal sales price
assumptions, operating
costs and
capital costs from
December 31,
2023, to
December 31,
2024. Coal
sales price assumptions
underlying
the reserve estimates are
discussed in Sections 12
and 16 of the Logan
TRS, while operating costs
and capital
costs assumptions underlying the reserve
estimates are discussed in Sections
18 and 19 of
the Logan TRS.
The
differences in the
key financial modifying
factors did not
have a material
impact on the reserve
as of December
31,
2024,
as
compared
to
the
reserve
estimates
as
of
December
31,
2023.
From
December
31,
2023,
to
December 31, 2024, measured and indicated resources decreased by
approximately 5%, from approximately 75
MMt to 71 MMt.
This net reduction of 4
MMt of measured and indicated
mineral resources was attributable to
one
year of mining depletion along with changes
to the mine plan. Updated financial inputs, including
coal sales price
assumptions and
operating and
capital costs
used in
estimating the
resources exclusive
of reserves,
including
conversion of
resources
to reserves,
as discussed
in Section
11.3
of the
Logan TRS,
did not
have a
material
impact
on
the
measured
and
indicated
resource
estimates
as
of
December
31,
2024,
as
compared
to
the
measured and indicated resource estimates as of December
31, 2023.
Marshall Miller
& Associates,
Inc., a
third-party
firm comprising
mining
experts, whom
we refer
to as
the U.S.
QPs, prepared the estimates
of coal resources and reserves
as of December 31, 2024
summarized in Tables
8
and 9.
A copy of the U.S. QPs’
TRS with respect to Logan,
dated as of February 1,
2025, or the Logan TRS,
is
filed as Exhibit 96.3 hereto. The U.S. QPs are not affiliated
with Coronado.
The
U.S.
QPs
prepared
the
estimates
of
coal
resources
and
reserves
using
core
drilling
data
available
from
exploration activities at Logan conducted by numerous
entities over time.
Most of this information was obtained
prior to
our acquisition
of the prop
erty,
using varying
drilling and
core-logging techniques,
survey methods
and
testing procedures.
As a
result, in
verifying the data,
the U.S.
QPs made
certain assumptions about
the adequacy
of the processes performed and comparability
of the data based on their
professional experience and familiarity
with Logan. Per Section 12.1 of the Logan TRS, coal reserves were
classified as proven or probable considering
“modifying
factors,”
including
mining,
metallurgical,
economic,
marketing,
legal,
environmental,
social
and
governmental factors.
Section 22.2
of the Logan
TRS includes
a risk
assessment of
the key
modifying factors
that could potentially impact the operations and therefore the
estimate of coal reserves and resources.
As summarized in Section 7.1 in the Logan TRS, the U.S. QPs utilized 1,160 available core, rotary, and gas well
drilling on and around
the Logan property. Mine data from active
underground mines was supplied to
supplement
the exploration
drillhole records,
by seam.
Points of
observation
include exploration
drill holes,
gas wells,
and
mine measurements, which have been fully vetted
and processed into a geologic model.
The geologic model is
based
on
seam
depositional
modeling,
the
interrelationship
of
overlying
and
underlying
strata
on
seam
mineability,
seam thickness
trends, the
impact of
seam structure
(i.e., faulting),
intra-seam characteristics,
etc.
The U.S.
QPs completed
a geostatistical
analysis on
drill holes
within the
reserve boundaries
to determine
the
applicability
of
the
common
U.S.
classification
system
for
measured
and
indicated
coal
resources.
As
summarized in Section
11.1
of the Logan TRS,
these results have
led the U.S. QPs
to report the data
following
the historical classification standards, rather than use the
results of the DHSA.
Coronado Global Resources Inc. Form 10-K December 31,
2024
84
Coal quality is instrumental in determining
the viability of a coal deposit. Per
Section 8.2 of the Logan TRS, coal
quality
conforms
to
the
ASTM
standards.
These
quality
attributes
aided
in
converting
dry,
in-place
tons
to
demonstrated coal reserves (recoverable
washed tons). The
reserve and resource
criteria are presented in
Table
11-1
of
the
Logan
TRS,
including
assumptions
related
to
seam
density,
minimum
cut-off
thickness,
and
recoveries.
Pricing data as provided by Coronado is described
in Section 16.2 of the Logan TRS.
Regarding production
rates as
described in
Section 13.2
of the
Logan TRS,
the projected
underground mines
are set up similarly to the
four active underground operations as of December 31,
2024.
Each mine is scheduled
to operate one
to three production
sections.
All sections are
configured as full
super sections with
two continuous
miners per section.
Three surface resource areas
were modeled.
Mining operations are projected
to utilize area,
as well as contour,
mining methods.
The three areas
planned for highwall
mining are assumed
to be mined
by
a
contractor;
therefore,
the
contractor
costs
included
in
the
financial
model
assume
that
the
contractor
is
responsible for staffing
those operations along
with providing necessary equipment
capital. Spoil for
final highwall
reclamation is expected
to come from
strategic placement
of spoil on
pre-existing benches
by haul trucks
such
that they
are within
the push
distance of
the reclamation
dozer.
Additional information
regarding mine-specific
production factors can be found in Section 13.4 of the
Logan TRS.
Mon Valley
The Mon Valley mine
complex comprises three
development-stage mining properties, namely, Pangburn, Shaner
and Fallowfield,
each consisting
of a
proposed underground
mine that
would produce
High-Vol
Met coal
using
the room
and
pillar
mining
method.
The
preliminary
design
for
the
properties
also
includes
plans
for
surface
facilities
and
a
preparation
plant
for
each
mine.
The
properties
reside
in
Allegheny,
Washington
and
Westmoreland Counties in southwestern Pennsylvania.
The proposed facilities include
a barge loading
dock and
CSX rail loadout
on the Monongahela
River in Allegheny County, Pennsylvania, which
would ship clean
coal from
all three mines to end customers.
A map of Mon Valley
is shown in Figure 6.
Figure 6.
Coronado Mon Valley
Mine Complex Property Location Map.
Mon Valley is located
approximately 22.5 kilometers
southeast of
Pittsburgh, Pennsylvania, near
the communities
of Bentleyville,
Lockview,
Monongahela, Elizabeth,
Sutersville and
Irwin, Pennsylvania.
The coordinates
of the
proposed infrastructure are latitude 40° 15' 24" and longitude 79° 53' 50" (Easting
1,398,821’, Northing 343,480’
– in the PA State
Plane South NAD 27 grid system). From U.S. Interstate 70
and Pennsylvania Route 51, which
traverse
the
Fallowfield
and
Pangburn
areas,
respectively,
a
well-developed
network
of
improved
and
unimproved roads allows general access to the
property.
The Monongahela and Youghiogheny
Rivers also run
through the property.
The primary means of transport for produced coal would be by barge
on the Monongahela
River/Ohio River system.
Additionally,
a CSX rail line located
along the banks of the
Monongahela River would
provide another option for the shipment of coal.
Coronado Global Resources Inc. Form 10-K December 31,
2024
85
Mon
Valley
has
sources
of
water,
power,
and
supplies
readily
available
for
use.
Personnel
in
the
area
have
historically
been
sourced
from
the
surrounding
communities
in
Allegheny,
Washington,
and
Westmoreland
Counties,
and
have
proven
to
be
adequate
in
numbers
to
operate
the
mines.
As
mining
is
common
in
the
surrounding areas, the
workforce is generally
familiar with mining
practices, and many are
experienced miners.
Water is expected to be sourced locally from a nearby public water sources or rivers.
Electricity is anticipated to
be
sourced
from
West
Penn
Power
or
Duquesne
Light.
The
service
industry
in
the
areas
surrounding
the
proposed mine complex has historically provided supplies,
equipment repairs and fabrication, etc.
The
property
mineral
rights
are
composed
of
41,615
total
hectares,
of
which
1,339
are
leased
from
private
landholders under two leases,
and 40,276 hectares are
owned by Coronado.
Subject to Coronado’s exercising
its renewal rights
thereunder,
both of the
leases expire
upon exhaustion
of the relevant
coal reserves,
which is
expected to occur in 2102.
A
predecessor
of
CONSOL
Energy
previously
controlled
the
properties.
We
acquired
the
properties
from
CONSOL Energy in March 2016 in connection with the
acquisition of the Buchanan property.
Before we acquired Mon Valley, CONSOL Energy had conducted extensive exploration of Mon Valley.
We have
continued
an
exploration
program
focused
on
defining
reserves
and
assessing
the
geotechnical
viability
of
mining.
Mon
Valley
is
capable
of
producing
primarily
a
High-Vol
Met
coal
from
the
Upper
Freeport
seam
of
the
Pennsylvania-age
Allegheny
Formation.
The
seam
is
situated
below
drainage
throughout
the
properties
and
would be
accessed with
slopes and
shafts.
The seam
thickness in
the projected
mining areas
averages 1.95
meters.
Under our current
mine development
plans, production
would begin at
the Pangburn
mine in 2034,
followed by
the Shaner mine in
2040 and, finally, the Fallowfield mine in
2059.
The proposed Mon Valley underground mines
would use the room and pillar
mining method with limited pillaring
as to cause no subsidence.
Each mine would
have three
continuous
miner
sections,
with two
continuous
miners, two
roof bolters,
four shuttle
cars and
two
scoops per
section.
The shuttle
cars would
haul extracted
coal from
the production
face to
a feeder
breaker-
conveyor system, which
would carry raw
coal to a
surface stockpile
and CPP.
The CPPs and
surface facilities
would have large
raw and clean
coal storage areas
to facilitate efficient
loading of clean
coal into barges
or rail
cars for transport.
We have
not yet completed
detailed designs
of the infrastructure
or surface
facilities for
the
proposed Shaner and Fallowfield mines.
As of December 31, 2024, the book value of Mon
Valley was $17.5 million.
We are not aware of any significant encumbrances or defects in title with respect to the properties. However,
we
will be required to obtain alternate
zoning approval from the local township. Further, we will be required
to submit
formal permit
applications
to state
or federal
regulatory
agencies.
Although we
have commenced
the work
to
obtain the
necessary
permits and
zoning variances,
we are
aware that
the period
of time
necessary
to obtain
final authorizations,
for purposes
of commencing
the development,
construction and
ultimate production
at the
proposed mine site, may be significant, and there can be no assurance that we can obtain the necessary zoning
and
permits.
See
Item
1.
“Business—Regulatory
Matters—United
States”
for
a
discussion
of
the
permitting
conditions applicable to Mon Valley.
Coal mined from the
Mon Valley
mine complex would
be subject to a
federal black lung
excise tax of
$1.21 per
ton for underground mining and a
federal reclamation tax of $0.13 per ton
for underground mining.
However, the
federal black lung excise tax will only apply with respect
to coal sold domestically.
Mon Valley contains no resources exclusive of reserve tons as of
December 31, 2024 and 2023. Table 1-1 of the
Mon Valley
TRS (as
defined below)
provides a summary
of Mon Valley
resource tons
inclusive of
reserve tons
as of December 31, 2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
86
A summary of Mon Valley’s
coal reserves as of December 31, 2024 and 2023 is shown
in Table
10.
Table 10.
Mon Valley – Summary of Coal Reserves (Marketable Sales Basis) at the
End of the Fiscal Year
Ended December 31, 2024 and 2023.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)(4)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2024
78
57
134
8.0%
1.2%
(3)
35.0%
December 31, 2023
78
57
134
8.0%
1.2%
(3)
35.0%
(1)
Pricing data as
provided by
Coronado is described
in Section 16.2
of the
Mon Valley TRS. For
Mon Valley reserves as
of December
31, 2023, the pricing data assumes
a blended HVB domestic and
export FOB-mine nominal price
of $181 per Mt for calendar
year
2029; HVB domestic and export prices respectively are increased
by 2% annual inflation thereafter.
For Mon Valley
reserves as
of December 31, 2024, the pricing data assumes a blended
HVB domestic and export FOB-mine nominal price of
$183 per Mt for
calendar year 2030; HVB domestic and export
prices respectively are increased by 2% annual
inflation thereafter.
(2)
Reported on a 6.0% moisture basis.
(3)
LOM sulfur for Pangburn is an estimated 1.2%; however, overall Mon
Valley Complex reserve average is 1.4% sulfur.
(4)
Some numerical figures in the
above table have been subject
to rounding adjustments. Accordingly,
numerical figures shown as
totals may not equal the sum of the figures that
precede them.
Total
reserves
did
not
change
from
December
31,
2023,
to
December
31,
2024.
A
TRS
with
respect
to
Mon
Valley,
updating the TRS
with respect to
Mon Valley
filed with Coronado’s
Annual Report on
Form 10-K
for the
year ended December 31, 2024,
was prepared in February
2025 due to material differences
in the key financial
modifying factors
including coal sales
price assumptions,
operating costs
and capital
costs from
December 31,
2023, to
December
31,
2024.
Coal
sales
price
assumptions
are
discussed
in
Sections
12
and
16
of
the
Mon
Valley TRS, while operating costs and capital costs are discussed in Sections 18 and 19 of the Mon Valley
TRS.
Marshall
Miller
&
Associates,
Inc.,
a
third-party
firm
comprising
mining,
whom
we
refer
to
as
the
U.S.
QPs,
prepared the estimates of coal reserves summarized in Tables
10.
A copy of the U.S. QPs’ TRS with respect to
Mon Valley
(Pennsylvania Upper
Freeport
Holdings), dated
as of
February 1,
2025, or
the Mon
Valley
TRS, is
filed as Exhibit 96.4 hereto. The U.S. QPs are not affiliated
with Coronado.
The
U.S.
QPs
prepared
the
estimates
of
coal
resources
and
reserves
using
core
drilling
data
available
from
exploration
activities
at
Mon
Valley
conducted
by
numerous
entities
over
time.
Most
of
this
information
was
obtained prior
to our
acquisition of
the Mon
Valley
property,
using varying
drilling and
core-logging techniques,
survey
methods
and
testing
procedures.
As
a
result,
in
verifying
the
data,
the
U.S.
QPs
made
certain
assumptions
about
the
adequacy
of
the
processes
performed
and
comparability
of
the
data
based
on
their
professional experience and familiarity with Mon Valley.
Per
Section
12.1
of
the
Mon
Valley
TRS,
coal
reserves
were
classified
as
proven
or
probable
considering
“modifying
factors,”
including
mining,
metallurgical,
economic,
marketing,
legal,
environmental,
social
and
governmental
factors.
Section
22.2
of
the
Mon
Valley
TRS
includes
a
risk
assessment
of
the
key
modifying
factors that could potentially impact the operations and therefore the
estimate of coal reserves and resources.
As summarized
in Section
7.1 in
the Mon
Valley
TRS, the
U.S. QPs
utilized approximately
750 available
core
and rotary holes
on and around
the Mon Valley
properties. Points of
observation include exploration
drill holes,
degas holes, and mine measurements,
which have been fully vetted and processed
into a geologic model.
The
geologic model is based
on seam depositional
modeling, the interrelationship
of overlying and underlying
strata
on
seam
mineability,
seam
thickness
trends,
the
impact
of
seam
structure
(i.e.
faulting),
intra-seam
characteristics, etc.
The U.S. QPs
completed a geostatistical
analysis on drill
holes within the
reserve boundaries
to determine the applicability of the
common United States classification system for measured and
indicated coal
resources.
As summarized in Section 11.1 of the Mon Valley TRS, these results have led the U.S. QPs to report
the data following the historical classification standards,
rather than use the results of the DHSA.
Coal quality is instrumental in determining the
viability of a coal deposit. Per Section
8.2 of the Mon Valley
TRS,
coal quality
conforms to
the ASTM
standards. These
quality attributes
aided in
converting dry,
in-place tons
to
demonstrated coal reserves (recoverable
washed tons). The
reserve and resource
criteria are presented in
Table
11-1
of
the
Mon
Valley
TRS,
including
assumptions
related
to
seam
density,
minimum
cut-off
thickness,
and
recoveries. Pricing data as provided by Coronado is described
in Section 16.2 of the Mon Valley
TRS.
Coronado Global Resources Inc. Form 10-K December 31,
2024
87
Regarding production rates
as described in
Section 13.2 of
the Mon Valley
TRS, the Mon
Valley
mine complex
is not yet
active, with three distinct
mines and CPPs planned.
The mine plan and
productivity expectations reflect
historical performance from other similar mines
with similar conditions and efforts
have been made to adjust the
plan to reflect future conditions. Mine development and operation have not been
optimized within the Mon Valley
TRS.
Additional mine-specific factors can be found in Section 13.4
of the Mon Valley TRS.
Russell County (Non-Material Property)
The
Russell
County
property
is
not
considered
material
to
Coronado’s
business
or
financial
conditions.
In
addition, pursuant to the current mine plan, the
property will only start generating cash flows when it
commences
production planned
for 2042.
Resources exclusive
of reserves
are based on
assumed long-term
average price
of $154 per Mt (FOB loadout), representing the Company’s long-term average price forecast for Russell County.
The pricing
data assumes
HVA
FOB-mine prices
with a
weighted LOM
average of
approximately $267
per Mt.
Marketable reserve tons are reported
on a moist basis,
including a combination of surface
and inherent moisture.
The combination of surface and inherent moisture is modeled
at 6.0%.
Internal Controls
Our
staff
of
geologists
and
engineers
worked
with
the
qualified
persons
throughout
the
mineral
resource
and
reserve estimation process and provided data
from our own exploration and
operating activities at the properties.
We
have
internal
control
procedures,
including
quality
assurance/quality
control
procedures
and
internal
verification of input data and geological modelling, subject
to multi-level review, to
help ensure the validity of the
data. These procedures include, but are not limited to:
•
Oversight and approval of each annual statement by responsible
senior officers;
•
Independent, external review of new and materially changed
estimates at regular intervals;
•
Annual
reconciliation
with
internal
planning
by
our
staff
of
geologists
and
engineers
to
validate
coal
reserve and coal resource estimates for operating mines,
including the following procedures:
•
Assessments
of
drilling,
sampling
and
quality
assurance/quality
control
data,
resource
modelling, resource estimation, classification, and reporting;
•
Assessment
and
benchmarking
of
production
assumptions,
mining
rate
and
production
schedules against historical production data;
•
Assessments
of
capital
and
operating
costs
against
other
comparable
projects
for
reasonableness;
•
Continual identification
and
evaluation
of material
technical
issues
likely to
impact
the five-
year plan and the future performance of producing properties;
•
An examination of historical
information and results in
respect of the technical
aspects of the properties
by our staff of geologists and engineers, including
a review of the following key elements:
•
Coal resource and coal reserve estimates;
•
Mining operations and proposed growth options;
•
Coal preparation facilities;
•
Coal handling and transport;
•
Environmental matters and approvals;
•
Land management, including leases and other pertinent
agreements;
•
Veracity of existing information
supporting five-year plans and business plans;
•
Identification of key project drivers; and
•
Risks and opportunities.
Coronado Global Resources Inc. Form 10-K December 31,
2024
88
The pricing
information
used for
preliminary
resource
valuation and
to estimate
our proven
and probable
coal
reserves was based on prices under our existing contracts and price forecasts. Below
is a description of some of
the factors
that could
affect price
forecasts for
Met and
thermal coal
products on
a mine-by-mine
and product-
by-product basis. Differences between
the assumptions and analyses
included in the
price forecasts and realized
factors could cause actual pricing to differ from
the forecasts.
Metallurgical.
economic conditions and demand for
steel and is also impacted by competing
technologies used to make steel,
some of which do not use coal as a manufacturing input. Competition from other types of coal is also a key price
consideration
and
can
be
impacted
by
coal
quality
and
characteristics,
delivered
energy
cost
(including
transportation costs), customer service and support and
reliability of supply.
Seaborne
Met
coal
import
demand
can
be
significantly
impacted
by
the
availability
of
local
coal
production,
particularly
in
leading
Met
coal
import
countries
such
as
China
and
India,
among
others,
as
well
as
country-
specific policies restricting or promoting domestic supply. The competitiveness of seaborne Met coal supply from
leading Met coal
exporting countries, such as
Australia, the United
States, Russia, Canada and
Mongolia, among
others, is also an important price consideration.
In addition to
the factors noted
above, the prices
which may be
obtained at each
individual mine or
future mine
can be impacted
by factors such
as (i) the
mine’s location,
which impacts the
total delivered energy
costs to its
customers, (ii)
quality characteristics,
particularly
if they
are unique
relative
to competing
mines, (iii)
assumed
transportation costs and
(iv) other mine
costs that are
contractually passed on to
customers in certain
commercial
relationships.
Thermal.
electric power generation volumes, which are
determined in part by the
impact of weather on heating
and cooling
demand,
inter-fuel
competition
in
the
electric
power
generation
mix,
changes
in
capacity
(additions
and
retirements),
inter-basin
or
inter-country
coal
competition,
coal
stockpiles
and
policy
and
regulations.
Supply
considerations
impacting
pricing
include
reserve
positions,
mining
methods,
strip
ratios,
production
costs
and
capacity and the cost of new supply (new mine developments
or extensions at existing mines).
The
cost
information
that
the
QPs
used
for
preliminary
resource
valuation
and
to
estimate
our
proven
and
probable reserves
were generally
internal projected
future costs
based on
historical costs
and expected
future
trends. The
estimated costs
normally include
mining, processing,
transportation, royalty,
tax and
other mining-
related
costs.
Our
estimated
mining
and
processing
costs
reflect
projected
changes
in
prices
of
consumable
commodities (mainly diesel fuel,
natural gas, explosives and
steel), labor costs, geological
and mining conditions,
targeted
product
qualities
and
other
mining-related
costs.
Estimates
for
other
sales-related
costs
(mainly
transportation, royalty
and tax)
are based
on contractual
prices or
fixed rates.
Specific factors
that may
impact
the cost at our various operations include:
•
Geological settings.
that determine the mining cost. Our geology department conducts the exploration program and provides
geological models for the LOM process. Coal seam depth, thickness, dipping angle, partings and quality
constrain the available mining methods
and size of operations. Shallow
coal is typically mined by
surface
mining
methods
by
which
the
primary
cost
is
overburden
removal.
Deep
coal
is
typically
mined
by
underground
mining
methods
where
the
primary
costs
include
coal
extraction,
conveyance
and
roof
control.
•
Scale of operations and the equipment
sizes.
lower unit cost
than truck-and-shovel systems for
overburden removal. The longwall
operations generally
are more cost effective than bord-and-pillar operations
for underground mines.
•
Commodity prices.
the total mining cost.
For underground mines, the
steel used for roof
bolts represents a significant
cost.
Commodity price
forecasts are
used to
project those
costs in
the financial
models we
use to
establish
our reserves.
•
Target
product quality.
may experience
more coal
losses. By
lowering product
quality,
the coal
losses can
be minimized
and
therefore a lower cost per
Mt can be achieved. In
our mine plans, the product
qualities are estimated to
correspond to existing contracts and forecasted market
demands.
Coronado Global Resources Inc. Form 10-K December 31,
2024
89
•
Transportation
costs.
transportation infrastructure and services where required, including
rail carriers and port owners. Where
coal
is
exported
or
sold
other
than
at
the
mine
gate,
the
costs
associated
with
these
arrangements
represent a significant portion of both the total cost of supplying coal to customers and of our production
costs.
As
a
result,
the
cost
of
transportation
is
not
only
a
key
factor
in
our
cost
base
but
also
in
the
purchasing
decision
of
customers.
Our
transportation
costs
vary
by
region.
See
Item
1.
“Business—
Transportation” for more information regarding
transportation arrangements for our operations.
•
Royalty costs.
Queensland
government
as
described
in
Item
1.
“Business—Regulatory
Matters—Australia—Mineral
Resources Act 1989
(Qld)”. These royalties
are in addition
to the Stanwell
rebate, as described
in Item
1. “Business—Customers—Stanwell.” Royalty
costs at our U.S. Operations
are based upon contractual
agreements for the coal
leased from private owners
and vary from
property to property
and by the type
of
mine
(i.e.,
surface
or
underground).
The
royalty
rates
under
leases
at
our
U.S.
Operations
range
between
3%
-
9%
of
revenues
from
coal
sales.
Under
some
of
the
leases,
we
are
required
to
pay
minimum royalties,
regardless
of production,
and/or “wheelage
fees” (i.e.,
fees payable
on coal
mined
and
removed
from
properties
other
than
the
particular
leasehold
and
hauled
across
the
leasehold
premises).
•
Black lung,
severance and
reclamation taxes.
excise tax on coal sold domestically.
•
Exchange rates.
the coal that our Australian Operations
export is sold in US$. As
a result, A$-US$ exchange rates impact
the U.S. dollar cost of our Australian Operations’ production
.
For further discussion of comprehensive risk inherent in the estimation, see Item 1A.
“Risk Factors—Operational
and Technology
Risks—We
rely on
estimates
of our
recoverable resources
and
reserves,
which
are complex
due to geological characteristics of the properties and the
number of assumptions made.
Coronado Global Resources Inc. Form 10-K December 31,
2024
90
ITEM 3.
LEGAL PROCEEDINGS.
We are
involved in
various
legal proceedings
occurring
in the
ordinary course
of business.
It is
the opinion
of
management, after consultation
with legal counsel,
that these matters
will not materially
affect our consolidated
financial position, results of operations or cash flows.
The Company is subject to a wide
variety of laws and regulations within the legal jurisdiction in
which it operates.
See “Part I, Item 1. Business—Regulatory Matters”
for additional information. The Company believes that
it is in
substantial compliance with federal, state and local laws
and regulations.
Coronado Global Resources Inc. Form 10-K December 31,
2024
91
ITEM 4. MINE SAFETY DISCLOSURES
Safety is the cornerstone of the Company’s values and is the
number one priority for all employees at Coronado.
Our U.S. Operations
include multiple mining
complexes across
three states and
are regulated by
both the U.S.
Mine Safety
and Health
Administration, or
MSHA, and
state regulatory
agencies. Under
regulations mandated
by the Mine Act, MSHA inspects our U.S. mines on a regular basis
and issues various citations and orders when
it believes a violation has occurred under the Mine Act.
In accordance
with
Section
1503(a) of
the Dodd-Frank
Wall
Street Reform
and
Consumer Protection
Act and
Item 104 of Regulation S-K (17 CFR 229.104), each operator of a coal or other mine is required to report certain
mine safety results in its periodic reports filed with the
SEC under the Exchange Act.
Information pertaining to mine safety
matters is included in Exhibit
95.1 attached to this Annual
Report on Form
10-K. The disclosures reflect the
United States mining operations only, as these requirements do
not apply to our
mines operated outside the United States.
Coronado Global Resources Inc. Form 10-K December 31,
2024
92
ITEM
5.
MARKET
FOR
REGISTRANT’S
COMMON
EQUITY,
RELATED
STOCKHOLDER
MATTERS
AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our CDIs, each
representing one-tenth
of one share
of our common
stock, have
been listed on
the ASX under
the
trading
symbol
“CRN”
since
October 23,
2018.
Prior
to
such
time,
there
was
no
public
market
for
our
securities. There is no principal market in the United States
for our CDIs or shares of our common stock.
Holders
As of December 31, 2024, we had 167,645,373
shares of our common stock issued
and outstanding with 7,486
holders of record.
The holders included CHESS
Depositary Nominees Pty Limited,
which held 90,147,345 shares
of our common stock in the form of
CDIs on behalf of the CDI holders; there were 7,485 registered owners
of our
CDIs on December 31, 2024.
Series A Preferred Share
On September
20, 2018,
we issued
the Series
A Preferred
Share to
Coronado
Group LLC,
at par
value.
The
offer, sale, and issuance of the Series A Share were deemed to be exempt from registration under
the Securities
Act in reliance on Section
4(a)(2) of the Securities Act as
transactions by an issuer not involving
a public offering.
The recipient of the Series A Share acquired the Series A Share for investment only and not with a view to or for
sale in connection with any distribution thereof and appropriate
legends were affixed to the Series A Share.
Dividends
The
payment
of
dividends
is
at
the
discretion
of
the
Board
of
Directors.
The
decision
as
to
whether
or
not
a
dividend will be
paid will
be subject to
a number of
considerations including
the general
business environment,
operating
results,
cash
flows,
future
capital
requirements,
regulatory
and
contractual
restrictions,
as
well
as
applicable covenants
under the
Indenture governing
our Notes
and covenants
under the
ABL Facility
and any
other factors the Board of Directors may consider relevant.
Our objective in setting our dividend policy is to deliver
stockholder returns while maintaining flexibility to pursue
our strategic
initiatives within
a prudent
capital structure.
Our dividend
policy is
to distribute
between 60%
and
100%
of
available
free
cash.
Available
free
cash
is
defined
as
net
cash
from
operating
activities
less
capital
expenditure, acquisition expenditure,
amounts reserved for
capital expenditure and
acquisition expenditure and
amounts required for
debt servicing. In
circumstances where there is
surplus available free cash,
at the discretion
of
our
Board
of
Directors
and
in
light
of
business
and
market
conditions,
we
may
consider
the
potential
for
additional
stockholder
returns
through
special
dividends
and
share
buy-backs
as
part
of
its
broader
capital
management strategy.
Summary Description of the Company’s
Non-Stockholder Approved Equity Compensation
Plans
The Company does not have any non-stockholder approved
equity compensation plans.
Recent Sales of Unregistered Securities
Other than as previously
disclosed in a Quarterly
Report on Form 10-Q
or in a Current
Report on Form 8-K,
we
did not issue
any shares of
our common stock
in a transaction
that was not
registered under
the Securities Act
during the year ended December 31, 2024.
Purchases of Equity Securities by the Issuer and
Affiliated Purchases
We had no repurchases of equity securities for the
three months ended December 31, 2024.
Coronado Global Resources Inc. Form 10-K December 31,
2024
93
ITEM 6.
[Reserved.]
Coronado Global Resources Inc. Form 10-K December 31,
2024
94
ITEM 7.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
OF FINANCIAL
CONDITION AND
RESULTS
OF
OPERATIONS
The following
Management’s Discussion
and Analysis
of our Financial
Condition and
Results of
Operations, or
MD&A, should be read in conjunction with the Consolidated Financial Statements and the related notes to those
statements included elsewhere in this Annual Report on Form
10-K.
Overview
For the year ended December 31,
2024, we produced 15.3 MMt and
sold 15.8 MMt of coal. Met
coal and thermal
coal sales
represented 79.3%
and 20.7%,
respectively,
of our
total volume
of coal
sold, and
95.2% and
4.8%,
respectively, of our
total coal revenues.
In
2024,
Coronado
faced
several
operational
challenges
which
impacted
coal
production,
however,
we
took
decisive actions
and implemented
strategic initiatives
to overcome
these challenges
and focused
on laying
the
foundation for an optimal operational structure beyond
2024.
Our
Australian
Operations
suffered
key
equipment
and
infrastructure
failures
and
significant
weather-related
disruptions resulting
in production
delays and
higher costs.
Despite these
setbacks,
our Australian
Operations
completed the historical pre-strip waste deficit works in
the first quarter and subsequently reduced
five contractor
truck
and
excavator
fleets
and
idled
a
Company-owned
shovel
fleet
which
enhanced
productivity
through
improved dragline
and drill
and blast
performance. The
commissioning
of the
Mammoth Underground
Mine in
December
2024
marked
a
key
milestone,
delivered
on
time
and
within
budget,
with
the
potential
to
ramp
up
production significantly in 2025.
Our U.S. Operations were adversely impacted
by delays in the planned longwall
move, equipment breakdowns,
a safety incident that caused temporary suspension of operations at our Buchanan mine and adverse geological
conditions
at
both
the
Logan
mine
and
Buchanan
mine.
For
Buchanan,
mining
through
more
complex
seam
structures
earlier
in
the
year,
reduced
overall
yield
of
saleable
coal.
Subsequent
improvements
in
mining
conditions, enhanced
conveyor and
skip system
performance,
and the
simultaneous operation
of two
longwall
panels,
in
the
Southern
and
Northern
districts,
resulted
in
improved
yields
and
efficiency,
particularly
in
the
second half of the year.
Overall,
in
2024,
our
saleable
production
was
0.5MMt
lower
while
our
sales
volume
remained
consistent
compared to the year ended December 31, 2023.
In 2024,
the Met
coal markets
experienced volatility,
driven by
weak macroeconomic
conditions in
key regions
such as
Europe, China,
and parts of
Asia, as
well as
fluctuating demand dynamics
in India.
European steelmakers
grappled with constrained industrial activity and reduced hot metal production, while China’s excessive steel and
coke exports, coupled with limited domestic stimulus,
weighed on prices and raw material demand. India
played
a pivotal role in
the market's mid-year stabilization, with strong
pre-monsoon restocking boosting demand for Met
coal. However,
the prolonged
monsoon season
later in
the year
temporarily reduced
Indian imports,
softening
overall demand.
The
benchmark
PLV
HCC
FOB
AUS average
for
the
year
ended
December
31,
2024,
of
$240.4
per
Mt
was
18.9% lower compared to $296.3 per Mt for the year
ended December 31, 2023.
Coal revenues of $2,444.9 million for the year ended December 31, 2024, were 13.6% lower
compared to 2023,
driven by lower average
realized Met price
of $185.3 per
Mt sold, $30.4
per Mt lower than
the average realized
Met price in 2023.
Mining costs of $1,683.3
million for the year
ended December 31,
2024, were $13.8
million higher compared
to
$1,669.5 million for the year ended December
31, 2023, due to significant inventory
drawdown at our Australian
Operations due to
sales volumes exceeding saleable
production in 2024, unplanned
maintenance costs following
equipment failures and continued
inflationary impacts on
labor and supply costs,
partially offset by
cost savings
from demobilizing fleets
at our Australian
Operations. Despite
the increase in
mining costs, our
mining cost per
Mt
sold
were
$0.2
lower
compared
to
the
year
ended
December
31,
2023,
driven
by
higher
sales
volume
excluding non-produced coal.
Dividends
During the year
ended December
31, 2024, Coronado
paid total dividends
of $16.7 million
to stockholders
and
CDI holders on the ASX.
Coronado Global Resources Inc. Form 10-K December 31,
2024
95
Senior Secured Notes
On
October
2,
2024,
we
successfully
completed
a
refinancing
initiative
and
issued
$400.0
million
aggregate
principal
amount
of our
9.25%
Senior
Secured
Notes
due 2029,
or the
2029 Notes
.
The transaction
provides
Coronado increased
financial flexibility
by extending
our debt
maturity profile
and includes
improved terms
that
we believe are more sustainable for our business.
The net proceeds from
the transaction were
used to redeem
all of the Company’s
outstanding principal amount
of our
10.750% Senior
Secured Notes
due 2026,
or the
2026 Notes,
and to
pay related
fees and
expenses in
connection with offering of the 2029 Notes
and the redemption of the 2026 Notes.
Refer to Part II, Item 8, Note 14. “Interest Bearing Liabilities”
for further information.
Liquidity
Coronado
had
cash
and
cash
equivalents
(excluding
restricted
cash)
of
$339.4
million
and
$128.6
million
of
undrawn capacity under our ABL Facility as of
December 31, 2024. As of December 31, 2024,
we had a net debt
of $85.1 million comprising of $424.5 million aggregate principal
amount of interest-bearing liabilities outstanding
less cash and cash equivalents (excluding restricted cash).
On
December
30,
2024,
we
completed
the
Waiver
Agreement
with
the
Administrative
Agent
under
the
ABL
Facility to temporarily waive
the Company’s compliance
with the ABL Facility’s
interest coverage ratio covenant
between
December
31,
2024
to
March
30,
2025.
Pursuant
to
the
Waiver
Agreement,
we
will
be
required
to
maintain an aggregate cash
balance of at least
$100.0 million in one
or more accounts
with the Lenders, or
the
Cash Balance
Covenant, until such
time that
we submit
a covenant
compliance certificate to
the Lenders
pursuant
to the ABL Facility which demonstrates that we are in compliance
with the interest coverage ratio covenant. The
Cash
Balance
Covenant
applies
from
the
time
the
Company
submits
the
covenant
compliance
certificate
for
December 31, 2024, which is anticipated to be on or
after February 19, 2025.
At the end
of the waiver
period, unless
further waivers
are obtained,
any breach
of covenants
would constitute
an event of default under the
terms of the ABL Facility and
the Lenders may declare all amounts owing
under the
ABL Facility immediately due and payable,
terminate such Lenders’ commitments
to make loans under the ABL
Facility,
require
the
Borrowers
to cash
collateralize
any
letter of
credit
obligations
and/or exercise
any
and all
remedies and other rights under the ABL Facility.
Safety
For
our
Australian
Operations,
the
twelve-month
rolling
average
Total
Reportable
Injury
Frequency
Rate
at
December
31,
2024,
was
2.22,
compared
to
a
rate
of
1.83
at
the
end
of
December
31,
2023.
At
our
U.S.
Operations, the
twelve-month rolling
average Total
Reportable Incident
Rate at
December 31,
2024 was
2.21,
compared to a rate of 1.44 at the end of December 31,
2023.
The safety of our workforce is our number one priority,
and we remain focused on the safety and wellbeing of all
employees and
contracting parties. Coronado
continues to implement
safety initiatives to
improve our
safety rates
every quarter.
Segment Reporting
In accordance with
Accounting Standards Codification,
or ASC, 280,
Segment Reporting, we
have adopted the
following reporting
segments: Australia and
the United
States. In
addition, “Other and
Corporate” is
not a
reporting
segment but is disclosed for the purposes of reconciliation
to our Consolidated Financial Statements.
Results of Operations
How We Evaluate Our Operations
We
evaluate
our
operations
based
on
the
volume
of
coal
we
can
safely
produce
and
sell
in
compliance
with
regulatory
standards,
and
the
prices
we
receive
for
our
coal.
Our
sales
volume
and
sales
prices
are
largely
dependent upon
the terms
of our
coal sales
contracts, for
which prices
generally are
set based
on daily
index
averages, on a quarterly basis or on annual fixed price
contracts.
Our management
uses a
variety of
financial and
operating metrics
to analyze
our performance.
These metrics
are significant factors
in assessing
our operating results
and profitability.
These financial
and operating metrics
include: (i) safety and environmental metrics; (ii) Adjusted EBITDA; (iii) total sales volumes and average realized
price
per
Mt
sold,
which
we
define
as
total
coal
revenues
divided
by
total
sales
volume;
(iv)
Met
coal
sales
Coronado Global Resources Inc. Form 10-K December 31,
2024
96
volumes and average realized Met price per
Mt sold, which we define as Met coal
revenues divided by Met coal
sales volume; (v)
average segment mining
costs per Mt sold,
which we define
as mining costs
divided by sales
volumes (excluding non-produced coal) for the respective segment; (vi) average segment operating costs per
Mt
sold, which we define as segment operating costs
divided by sales volumes for the respective segment
and (vii)
net cash, which we define
as cash and cash equivalents
(excluding restricted cash)
less outstanding aggregate
principal amount of the Notes and other interest bearing
liabilities.
Coal revenues are shown on our Consolidated Statements of Operations
and Comprehensive Income exclusive
of other
revenues. Generally,
export sale
contracts for
our Australian
Operations require
us to
bear the
cost of
freight
from
our
mines
to
the
applicable
outbound
shipping
port,
while
freight
costs
from
the
port
to
the
end
destination
are typically
borne
by the
customer.
In circumstances
where
we sell
through
intermediaries
to the
export market from our
U.S. Operations, sales
are recognized when
the title to the
coal passes to the
customer
at the
mine
load out
similar
to a
domestic
sale.
For
our domestic
sales,
customers
typically
bear
the
cost
of
freight.
As
such,
freight
expenses
are
excluded
from
the
cost
of
coal
revenues
to
allow
for
consistency
and
comparability in evaluating our operating performance.
Non-GAAP Financial Measures; Other Measures
The
following
discussion
of
our
results
includes
references
to
and
analysis
of
Adjusted
EBITDA,
Segment
Adjusted EBITDA and mining
costs, which are financial
measures not recognized in
accordance with U.S. GAAP.
Non-GAAP financial
measures, including
Adjusted EBITDA,
Segment Adjusted
EBITDA and
mining costs,
are
useful to our investors to measure our operating performance.
Non-GAAP financial measures are intended to provide additional information only and do not have any standard
meaning prescribed
by U.S.
GAAP.
These measures
should not
be considered
in isolation
or as
substitute for
measures of performance prepared in accordance with
U.S. GAAP.
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, tax, depreciation, depletion and
amortization
and
other
foreign
exchange
losses.
Adjusted
EBITDA
is
also
adjusted
for
certain
discrete
non-
recurring items that we exclude in
analyzing each of our segments’
operating performance. Adjusted EBITDA
is
not intended to
serve as an
alternative to U.S. GAAP
measures of performance
and may not
be comparable to
similarly titled measures presented
by other companies. A reconciliation
of Adjusted EBITDA to its most
directly
comparable measure under U.S. GAAP is included below.
Segment
Adjusted
EBITDA
is
defined
as
Adjusted
EBITDA
by
operating
and
reporting
segment,
adjusted
for
certain
transactions,
eliminations
or
adjustments
that
our
CODM
does
not
consider
for
making
decisions
to
allocate resources among segments or assessing segment performance.
Segment Adjusted EBITDA is used as
a
supplemental
financial
measure
by
management
and
by
external
users
of
our
Consolidated
Financial
Statements such
as investors,
industry analysts
and lenders
to assess
the operating
performance of
the business.
Mining costs,
a non-GAAP
measure, are
based on
the reported
cost of
coal revenues,
which is
shown on
our
statement of
operations and comprehensive
income exclusive of
freight expense, Stanwell
rebate, other royalties,
depreciation,
depletion
and
amortization
and
selling,
general
and
administrative
expenses,
adjusted
for
other
items that do not relate
directly to the costs incurred to
produce coal at the mine.
Mining costs exclude these cost
components as
our CODM
does not
view these
costs as
directly attributable
to the
production of
coal. Mining
costs
is
used
as
a
supplemental
financial
measure
by
management,
providing
an
accurate
view
of
the
costs
directly attributable to the production
of coal at our mining
segments, and by external
users of our Consolidated
Financial Statements,
such as
investors, industry
analysts and
ratings agencies,
to assess
our mine
operating
performance in comparison to the mine operating performance
of other companies in the coal industry.
Year Ended December 31,
2024 Compared to Year
Ended December 31, 2023
Summary
The financial and operational highlights for the year ended December
31, 2024 include:
•
Net loss of
$108.9 million for the
year ended December 31,
2024, decreased by $264.9
million compared
to the
same
period in
2023.
The decrease
was
primarily
driven
by lower
coal
revenues,
due to
lower
average realized prices, partially offset by lower
cost and expenses.
•
Average realized Met price per Mt sold of $185.3 for the year ended December 31, 2024, was $30.4 per
Mt sold lower compared 2023.
Coronado Global Resources Inc. Form 10-K December 31,
2024
97
•
Sales volume of
15.8 MMt for
the year ended
December 31, 2024,
remained consistent to the
year ended
December
31,
2023,
despite
saleable
production
being
0.5
MMt
lower,
as
our
operations
drew
on
significant coal inventory built in December 2023, which resulted
from shipping delays in Australia.
•
Adjusted EBITDA of $115.1
million for the year ended
December 31, 2024, decrease
by $266.6 million,
compared to $381.7 million for the year ended December
31, 2023. This decrease was a result of
lower
coal revenues, partially offset by lower operating
costs.
For Year Ended December 31,
(US$ in thousands)
2024
2023
Change
%
Revenues:
Coal revenues
2,444,862
2,830,689
(385,827)
(13.6%)
Other revenues
62,851
59,914
2,937
4.9%
Total
revenues
2,507,713
2,890,603
(382,890)
(13.2%)
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
1,714,987
1,731,630
(16,643)
(1.0%)
Depreciation, depletion and amortization
187,400
160,711
26,689
16.6%
Freight expenses
241,377
259,710
(18,333)
(7.1%)
Stanwell rebate
116,870
136,523
(19,653)
(14.4%)
Other royalties
289,678
345,882
(56,204)
(16.2%)
Selling, general, and administrative expenses
36,944
84,177
(47,233)
(56.1%)
Total
costs and expenses
2,587,256
2,718,633
(131,377)
(4.8%)
Other income (expenses):
Interest expense, net
(58,856)
(56,751)
(2,105)
3.7%
Loss on debt extinguishment
(14,732)
(1,385)
(13,347)
963.7%
Decrease (increase) in provision for discounting and
credit losses
207
4,216
(4,009)
(95.1%)
Other, net
3,734
5,764
(2,030)
(35.2%)
Total
other expense, net
(69,647)
(48,156)
(21,491)
44.6%
(Loss) income before tax
(149,190)
123,814
(273,004)
(220.5%)
Income tax benefit
40,309
32,251
8,058
25.0%
Net (loss) income attributable to Coronado Global
Resources Inc.
(108,881)
156,065
(264,946)
(169.8%)
Coal revenues
Coal
revenues
were
$2,444.9 million
for
the
year
ended
December
31,
2024,
a
decrease
of
$385.8
million,
compared to $2,830.7 million for
the year ended
December 31, 2023.
This decrease was driven
by lower average
realized Met price per Mt sold of $185.3 for
the year ended December 31, 2024, compared to $215.7 per Mt sold
in 2023, due to
the continuous decline
in coking coal index
prices caused by
weakened steel demand
from key
Met coal markets such as China, Europe and India.
Coronado Global Resources Inc. Form 10-K December 31,
2024
98
Cost of coal revenues (exclusive of Items shown
separately below)
Cost of coal revenues comprised of costs related to produced tons sold, along with changes in both the volumes
and carrying values of coal inventory.
Cost of coal revenues include items
such as direct operating costs, which
include employee-related costs, materials and supplies, contractor services, coal handling and preparation costs
and production taxes.
Total
cost of
coal revenues
was $1,715.0
million for
the year
ended December
31, 2024,
a decrease
of $16.6
million, compared to $1,731.6 million for the same period
in 2023.
Cost of
coal revenues
for our
Australian Operations
for the
year ended
December 31,
2024, were
$3.6 million
lower compared
to the
same
period
in 2023.
Cost
savings
from demobilization
of contractors’
fleets
from
late
March 2024 following completion of the historical pre-strip waste deficit works, were partially offset
by significant
inventory
drawdown
for
the
year
ended
December
31,
2024,
due
to
lower
production,
and
higher
unplanned
maintenance costs due to key equipment failures.
Cost of coal revenues
for our U.S. Operations
were $13.0 million lower
for the year ended
December 31, 2024,
compared to
the same
period in
2023, due
to inventory
built for
the year
ended December
31, 2024,
as lower
sales
volumes
exceeded
lower
production,
and
lower
third-party
coal
purchases,
partially
offset
by
higher
unplanned maintenance costs during the year ended
December 31, 2024.
Depreciation, depletion and amortization
Depreciation, depletion and amortization
were $187.4 million for
the year ended
December 31, 2024, an
increase
of $26.7 million, compared
to $160.7 million
for the year
ended December 31,
2023. The increase
was associated
with full year depreciation of equipment brought into service
part way through 2023 and during 2024.
Freight expenses
Freight
expenses
totaled
$241.4
million
for
the
year
ended
December
31,
2024,
a
decrease
of
$18.3
million,
compared to $259.7 million for the year ended December 31, 2023. Our Australian Operations contributed $17.0
million
to
the
decrease
due
lower
sales
volume
shipped
through
WICET,
which
attracts
higher
port
handling
charges. Decrease of $1.3 million
at our U.S. Operations is
driven by lower sales
volumes of 0.2 MMt for
the year
ended December 31, 2024, compared to the same period in
2023.
Stanwell rebate
The Stanwell rebate was
$116.9
million for the year
ended December 31, 2024,
a decrease of $19.7
million, as
compared
to
$136.5
million
for the
year
ended
December
31,
2023.
The
decrease
was
due
to
lower
realized
Reference
coal
pricing
for
the
prior
twelve-month
period
used
to
calculate
the
rebate
compared
to
the
same
period in 2023.
Other royalties
Other
royalties
were
$289.7 million
for
the
year
ended
December
31,
2024,
a
decrease
of
$56.2 million,
as
compared to $345.9 million for the year ended December 31, 2023. Our Australian Operations contributed $47.3
million and our U.S. Operations contributed $8.9 million of
the decrease, a product of lower coal revenues for
the
year ended December 31, 2024, compared to 2023.
Selling, general, and administrative expenses
Selling,
general,
and
administrative
expenses
decreased
by
$47.2
million
to
$36.9
million
for
the
year
ended
December 31, 2024, compared to $84.2 million for the year ended December 31, 2023. Higher costs in the 2023
year were in relation to the additional accrual of $41.3 million stamp duty assessed by QRO on our
acquisition of
Curragh. Refer
to Part
II, Item
8. Financial
Statements
and Supplementary
Data, Note
25 “Contingencies”
for
further information.
Interest Expense, net
Interest
expense,
net
was
$58.9
million
for
the
year
ended
December
31,
2024,
an
increase
of
$2.1
million
compared
to
$56.8
million
for the
same
period
in
2023.
The
increase
was
primarily
driven
by higher
average
indebtedness during
the year
ended December
31, 2024,
compared to
2023, partially
offset by
higher interest
income on cash equivalents and restricted deposits
during the 2024 period.
Coronado Global Resources Inc. Form 10-K December 31,
2024
99
Loss on Debt Extinguishment
During
the
year
ended
December
31,
2024,
in
connection
with
the
early
redemption
of
the
2026
Notes,
we
recognized a loss on debt extinguishment of $14.7 million, including early redemption premium and unamortized
debt issuance costs.
Other, net
Other, net
was $3.7 million
in the year ended
December 31, 2024,
a decrease of $2.0
million compared to
$5.8
million
for
the
year
ended
December
31,
2023.
During
the
year
ended
December
31,
2024,
the
Company
recognized
an
impairment
charge
of
$10.6
million
against
property,
plant
and
equipment
relating
to
a
long-
standing
non-core
idled
asset
within
its
U.S.
Operations
recognized
based
on
purchase
offer
received
and
accepted by
the Company.
The sale
of this
long-standing non-core
idled asset
was completed
on January
14,
2025.
This
was
more
than
offset
by
lower
exchange
losses
on
translation
of
short-term
inter-entity
balances
between certain entities within
the group that are
denominated in currencies other than
their respective functional
currencies.
Income tax benefit
Income tax benefit of $40.3 million for the
year ended December 31, 2024, compared to $32.3 million
income tax
benefit for the year ended December 31, 2023. The income tax benefit for the 2024 period, is primarily driven by
a loss before tax from our Australian Operations.
The income tax benefit for the year ended December 31
,
2024 resulted in an annual effective tax rate
of 27.0%.
Year Ended December 31,
2023 Compared to Year
Ended December 31, 2022
The Company’s comparison of 2023 results to
2022 results is included in the
Company’s
, under Part II Item 7,
“Management’s Discussion and Analysis
of Financial Condition and Results of Operations.”
Coronado Global Resources Inc. Form 10-K December 31,
2024
100
Supplemental Segment Financial Data
Year Ended December 31,
2024 Compared to Year
Ended December 31, 2023
Australian Operations
For Year Ended December 31,
(US$ in thousands)
2024
2023
Change
%
Sales Volume (MMt)
10.2
9.9
0.3
3.4%
Total
revenues ($)
1,594,981
1,681,522
(86,541)
(5.1)%
Coal revenues ($)
1,560,275
1,645,752
(85,477)
(5.2)%
Average realized price per Mt sold ($/Mt)
153.1
167.0
(13.9)
(8.3)%
Met sales volume (MMt)
7.2
6.8
0.4
6.7%
Met coal revenues ($)
1,472,477
1,557,471
(84,994)
(5.5)%
Average realized Met price per Mt sold ($/Mt)
203.9
230.2
(26.3)
(11.4)%
Mining costs ($)
1,054,066
1,058,598
(4,532)
(0.4)%
Mining costs per Mt sold ($/Mt)
104.6
108.5
(3.9)
(3.6)%
Operating costs ($)
1,592,431
1,679,954
(87,523)
(5.2)%
Operating costs per Mt sold ($/Mt)
156.3
170.5
(14.2)
(8.3)%
Segment Adjusted EBITDA ($)
3,401
2,249
1,152
51.2%
Coal revenues
for our
Australian Operations
for the
year ended
December
31, 2024,
were $1,560.3
million,
a
decrease of
$85.5 million,
or 5.2%,
compared to
$1,645.8 million
for the
year ended
December 31,
2023. The
decrease was driven by
lower average realized Met
price per Mt
sold of $203.9, $26.3
lower, compared to $230.2
per Mt
sold during the
same period in
2023, partially offset
by 0.3MMt higher
sales volume, despite
lower saleable
production, for
the year ended
December 31,
2024, as
we drew on
port inventory
built at the
end of December
2023.
Operating costs decreased
by $87.5 million,
or 5.2%, for
the year ended
December 31,
2024, compared to
the
year ended December 31,
2023, driven by lower
mining costs, lower
Stanwell rebate, lower other
royalties and,
lower freight
expenses caused
by lower
sales volume
shipped through WICET, which
attracts higher
port handling
charges.
Mining
costs
were
$4.5
million
lower
for
the
year
ended
December
31,
2024,
driven
by
cost
savings
from
demobilization of mining
fleets since March
2024, partially offset
by significant inventory
drawdown for the
year
ended December
31, 2024,
as sales
volume exceeded
saleable production,
compared to
inventory built
in the
same period in 2023 and higher maintenance costs due
to key equipment failures.
Mining and Operating
costs per Mt sold
were $3.9 and
$14.2 lower,
respectively,
compared to the
same period
in 2023, a combination of lower costs and higher sales
volume.
For the year ended December 31, 2024, Segment Adjusted EBITDA was
$3.4 million, an increase of $1.2 million
compared to $2.2 million for
the year ended December 31, 2023,
driven by lower operating costs
partially offset
by lower coal revenues.
Coronado Global Resources Inc. Form 10-K December 31,
2024
101
United States
For Year Ended December 31,
(US$ in thousands)
2024
2023
Change
%
Sales Volume (MMt)
5.6
6.0
(0.4)
(5.5)%
Total
revenues ($)
912,732
1,209,081
(296,349)
(24.5)%
Coal revenues ($)
884,587
1,184,937
(300,350)
(25.3)%
Average realized price per Mt sold ($/Mt)
156.7
198.4
(41.7)
(21.0)%
Met sales volume (MMt)
5.3
5.2
0.1
2.0%
Met coal revenues ($)
854,587
1,031,012
(176,425)
(17.1)%
Average realized Met price per Mt sold ($/Mt)
160.1
196.9
(36.8)
(18.7)%
Mining costs ($)
629,242
610,925
18,317
3.0%
Mining costs per Mt sold ($/Mt)
112.6
106.0
6.6
6.2%
Operating costs ($)
770,481
793,791
(23,310)
(2.9)%
Operating costs per Mt sold ($/Mt)
136.5
132.9
3.6
2.7%
Segment Adjusted EBITDA ($)
147,233
421,093
(273,860)
(65.0)%
Coal
revenues
for
our
U.S.
Operations
decreased
by
$300.4
million,
or
25.3%,
to
$884.6
million
for
the
year
ended
December
31,
2024,
as
compared
to
$1,184.9
million
for
the
year
ended
December
31,
2023.
This
decrease was driven by a
lower average realized Met
price per Mt sold for
the year ended December
31, 2024,
of
$160.1
compared
to
$196.9
per
Mt
sold
for
the
same
period
in
2023.
This
decrease
was
exacerbated
by
0.4MMt lower sales
volume for
the year ended
December 31,
2024, compared to
2023, due to
operational and
geological challenges that led to production downtime
and lower production yield.
Operating costs of $770.5 million
for the year ended December
31, 2024, were $23.3 million
lower compared to
$793.8 million for
the same period
in 2023, driven
by lower third-party
coal purchases and
other royalties, partially
offset
by higher
mining costs.
Mining costs
were $18.3
million, or
$6.6
per Mt
sold, higher
for the
year
ended
December
31, 2024,
due
to
unplanned
maintenance
costs,
and impact
of inflation
on labor
and
supply
costs,
partially offset by an inventory built
for the year ended December
31, 2024, as lower sales
volumes exceed lower
production,
when
compared
to
2023.
Operating
costs
increased
by
$3.6
per
Mt
sold
despite
the
decrease
in
operating costs due to lower sales volume for the year.
Segment Adjusted EBITDA
of $147.2
million for
the year ended
December 31,
2024, decreased by
$273.9 million,
or 65.0%, compared to
$421.1 million for the
year ended December 31, 2023.
This decrease was primarily
driven
by lower coal revenues.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
of Corporate and Other Adjusted EBITDA:
For Year Ended December 31,
(US$ in thousands)
2024
2023
Change
%
Corporate and other expenses
36,944
42,856
(5,912)
(13.8)%
Other, net
(1,450)
(1,227)
(223)
18.2%
Total
Corporate and Other Adjusted EBITDA
35,494
41,629
(6,135)
(14.7)%
Corporate and other Adjusted EBITDA decreased
$6.1 million to $35.5 million for the year
ended December 31,
2024, compared to $41.6 million for
the year ended December 31, 2023, due
to concerted efforts to reduce costs
across the organization and the timing of certain corporate
costs.
Coronado Global Resources Inc. Form 10-K December 31,
2024
102
Mining and operating costs for the Year Ended December 31, 2024 compared to Year
December 31, 2023
A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:
For Year Ended December 31, 2024
(US$ in thousands)
Australia
United States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
1,680,817
867,830
38,609
2,587,256
Less: Selling, general and administrative expense
(57)
—
(36,887)
(36,944)
Less: Depreciation, depletion and amortization
(88,329)
(97,349)
(1,722)
(187,400)
Total operating costs
1,592,431
770,481
—
2,362,912
Less: Other royalties
(247,201)
(42,477)
—
(289,678)
Less: Stanwell rebate
(116,870)
—
—
(116,870)
Less: Freight expenses
(149,987)
(91,390)
—
(241,377)
Less: Other non-mining costs
(24,307)
(7,372)
—
(31,679)
Total mining costs
1,054,066
629,242
—
1,683,308
Sales Volume excluding non-produced
coal (MMt)
10.1
5.6
—
15.7
Mining cost per Mt sold ($/Mt)
104.6
112.6
—
107.4
For Year Ended December 31, 2023
(US$ in thousands)
Australia
United States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
1,756,635
876,753
85,245
2,718,633
Less: Selling, general and administrative expense
(30)
—
(84,147)
(84,177)
Less: Depreciation, depletion and amortization
(76,651)
(82,962)
(1,098)
(160,711)
Total operating costs
1,679,954
793,791
—
2,473,745
Less: Other royalties
(294,467)
(51,415)
—
(345,882)
Less: Stanwell rebate
(136,523)
—
—
(136,523)
Less: Freight expenses
(166,980)
(92,730)
—
(259,710)
Less: Other non-mining costs
(23,386)
(38,721)
—
(62,107)
Total mining costs
1,058,598
610,925
—
1,669,523
Sales Volume excluding non-produced
coal (MMt)
9.8
5.8
—
15.5
Mining cost per Mt sold ($/Mt)
108.5
106.0
—
107.6
Average realized Met price for the Year
Ended December 31, 2024 compared to Year
December 31, 2023
A reconciliation of the Company’s average realized
Met coal revenue is shown below:
For Year Ended December 31,
(US$ in thousands)
2024
2023
Change
%
Met sales volume (MMt)
12.6
12.0
0.6
5.0%
Met coal revenues ($)
2,327,064
2,588,483
(261,419)
(10.1)%
Average realized met price per Mt sold ($/Mt)
185.3
215.7
(30.4)
(14.2)%
Coronado Global Resources Inc. Form 10-K December 31,
2024
103
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
For year ended December 31,
(US$ in thousands)
2024
2023
2022
Reconciliation to Adjusted EBITDA:
Net (loss) income
(108,881)
156,065
771,703
Add: Depreciation, depletion and amortization
187,400
160,711
167,046
Add: Interest expense, net
58,856
56,751
67,632
Add: Other foreign exchange gains
(12,339)
(2,899)
(32,259)
Add: Income tax (benefit) expense
(40,309)
(32,251)
231,574
Add: Loss on debt extinguishment
14,732
1,385
5,336
Add: Impairment of non-core assets
10,585
—
—
Add: Uncertain stamp duty position
—
41,321
—
Add: Restructuring costs
729
—
—
Add: Losses on idled assets held for sale
4,574
4,846
771
Add: Decrease (increase) in provision for discounting
and credit losses
(207)
(4,216)
3,821
Adjusted EBITDA
115,140
381,713
1,215,624
Liquidity and Capital Resources
Overview
Our objective is to maintain a prudent capital structure and to ensure that sufficient liquid assets and funding are
available to meet both anticipated and
unanticipated financial obligations, including unforeseen events that could
have an
adverse impact
on revenues
or costs.
Our principal
sources of
funds are
cash and
cash equivalents,
cash flow from operations and undrawn capacity under
our committed debt facilities.
Our main uses of cash have historically been, and are expected to continue to be, the funding of our
operations,
working capital,
capital expenditure,
debt service
obligations and
payment of
dividends. Our
ability to
generate
sufficient
cash
depends
on
our
future
performance
which
may
be
subject
to
a
number
of
factors
beyond
our
control, including
general economic,
financial,
competitive and
weather conditions
and other
risks described
in
Part I, Item 1A. “Risk Factors” of this Annual Report on Form
10-K.
In 2024,
Coronado was
significantly impacted by
a declining
coal market
as well
as several
operational challenges
that impacted
our earnings
during the
year ended
December 31,
2024.
To
mitigate the
risk of
failing to
comply
with the maintenance of
the interest coverage ratio
covenant under the ABL
Facility, we completed an agreement
with the
Administrative
Agent under
the ABL
Facility to
temporarily
waive the
Company’s
compliance with
the
interest coverage ratio covenant between December
31, 2024 to March 30, 2025.
Pursuant to the Waiver Agreement, we will be required to maintain an aggregate cash balance of at least $100.0
million in one or
more accounts with the Lenders until
such time that we
submit a covenant compliance certificate
to
the
Lenders
pursuant
to
the
ABL
Facility
which
demonstrates
that
we
are
in
compliance
with
the
interest
coverage ratio covenant. The Cash Balance Covenant applies from
the time we submit the covenant compliance
certificate for December 31, 2024, which is anticipated
to be on or after February 19, 2025.
At the end
of the waiver
period, unless
further waivers
are obtained,
any breach
of covenants
would constitute
an event of default under the
terms of the ABL Facility and
the Lenders may declare all amounts owing
under the
ABL Facility immediately due and payable,
terminate such Lenders’ commitments
to make loans under the ABL
Facility,
require
the
Borrowers
to cash
collateralize
any
letter of
credit
obligations
and/or exercise
any
and all
remedies and other rights under the ABL Facility.
The Company is continuing to pursue a number of
initiatives to maintain its liquidity and ensure compliance
with
its financial covenants when the waiver
period expires on March 30,
2025. These initiatives include, among other
things,
further
operating
and
capital
cost
control
measures,
potential
other
funding
measures,
including
refinancing,
restructuring
or
amending
terms
of
our
existing
debt
facilities,
and,
if
required,
engagement
on
extensions
to
the
waiver,
including
waiver
of
other
financial
covenants.
These
steps
are
expected
to
mitigate
liquidity constraints.
Coronado Global Resources Inc. Form 10-K December 31,
2024
104
Based
on
our
outlook
for
the
next
twelve
months,
which
is
subject
to
continued
changing
demand
from
our
customers, volatility in
coal prices, current and
future trade barriers and
tariffs and the uncertainty of
impacts from
ongoing civil unrest
and wars, we
believe our available cash
together with undrawn capacity
under our committed
debt
facilities
and
other
strategic
and
financial
initiatives,
will
be
sufficient
to
meet
the
needs
of
our
existing
operations, capital expenditure, service our debt obligations
and, if declared, payment of dividends.
Sources of liquidity as of December 31, 2024 and December
31, 2023 were as follows:
December 31,
(US$ in thousands)
2024
2023
Cash and cash equivalents, excluding restricted cash
339,374
339,043
Short-term deposits
—
21,906
Undrawn capacity under the ABL Facility
(1)
128,563
128,094
Total
467,937
489,043
(1)
which $21.4 million
has been issued,
and $70.0 million
sublimit as a
revolving credit facility.
The letter of
credit sublimit contributes
to our
liquidity as the Company can replace cash collateral, provided in the form of restricted deposits, with letters of credit allowing the release of
such restricted deposits to cash and cash equivalents.
Our total indebtedness as of December 31, 2024 and
December 31, 2023 consisted of the following:
(US$ in thousands)
2024
2023
Current installments of interest bearing liabilities
1,477
—
Interest bearing liabilities, excluding current installments
422,995
242,326
Current installments of other financial liabilities
6,163
2,893
Other financial liabilities, excluding current installments
19,694
5,307
Total
450,329
250,526
Cash and cash equivalents
Cash
and
cash
equivalents
are
held
in
multicurrency
interest
bearing
bank
accounts
available
to
be
used
to
service
the
working
capital
needs
of
the
Company.
Cash
balances
surplus
to
immediate
working
capital
requirements
are
invested
in
short-term
interest-bearing
deposit
accounts
or
used
to
repay
interest
bearing
liabilities.
ABL Facility
The ABL Facility matures in August 2026 and provides for up to $150.0 million in borrowings, including a $100.0
million
sublimit
for
the
issuance
of
letters
of
credit
and
$70.0
million
sublimit
as
a
revolving
credit
facility.
Borrowing
capacity
under
the
ABL
Facility
is
limited
to
an
eligible
borrowing
base,
determined
by
applying
customary advance rates to eligible accounts receivable and inventory.
Borrowings under
the ABL
Facility bear
interest at
a rate
per annum
equal to
applicable rate
of 2.80%
and the
BBSY,
for loans denominated in A$, or SOFR, for loans
denominated in US$, at the Borrower’s election.
As
of
December
31,
2024,
letter
of
credit
sublimit
had
been
partially
used
to
issue
$21.4
million
of
bank
guarantees
on
behalf
of
the
Company
and
no
amounts
were drawn
and
no
letters
of credit
were
outstanding
under the revolving credit sublimit of the ABL Facility.
On December 30,
2024, we completed
the Waiver
Agreement with
Global Loan
Agency Services
Australia Pty
Ltd, the
Administrative Agent
under the
ABL Facility,
to temporarily
waive the
Company’s
compliance with
the
ABL Facility’s interest coverage ratio covenant
between December 31, 2024 to March 30, 2025.
Pursuant to the
Waiver Agreement,
we will
be required to
maintain an aggregate
cash balance
of at least
$100.0 million in
one
or
more
accounts
with
the
lenders
under
the
ABL
Facility,
or
the
Lenders,
until
such
time
that
we
submit
a
covenant compliance
certificate to
the Lenders
pursuant to
the ABL
Facility which
demonstrates that
we are
in
compliance
with
the
interest
coverage
ratio
covenant.
The
Cash
Balance
Covenant
applies
from
the
time
we
submit the covenant
compliance certificate for December
31, 2024, which
is anticipated to
be on or
after February
19, 2025.
At the end
of the waiver
period, unless
further waivers
are obtained,
any breach
of covenants
would constitute
an event of default under the
terms of the ABL Facility and
the Lenders may declare all amounts owing
under the
ABL Facility immediately due and payable,
terminate such Lenders’ commitments
to make loans under the ABL
Coronado Global Resources Inc. Form 10-K December 31,
2024
105
Facility,
require
the
Borrowers
to cash
collateralize
any
letter of
credit
obligations
and/or exercise
any
and all
remedies and other rights under the ABL Facility.
As of December 31, 2024, except for maintenance
of the interest coverage ratio covenant
(for which the Waiver
Agreement was obtained), we were in compliance with all other
applicable covenants under the ABL Facility.
Refer to Part II, Item 8, Note 14. “Interest Bearing Liabilities”
for further information.
9.250% Senior Secured Notes
On October
2, 2024,
we successfully
completed
a refinancing
initiative and
issued $400.0
million
of the
2029
Notes. The transaction provides the Company increased financial
flexibility by extending our debt maturity profile
and introducing terms that we believe are more sustainable
for our business.
The Company
used the
net proceeds
from the
transaction to
redeem all
of the
2026 Notes,
and to
pay related
fees and expenses in connection with the offering
of the 2029 Notes and the redemption of the 2026
Notes.
The 2029
Notes are
guaranteed on
a senior
secured basis
by the
Company and
its wholly-owned
subsidiaries
(other than the Issuer)
(subject to certain exceptions
and permitted liens) and
secured by (i) the
ABL Collateral,
and (ii) a second priority
lien on the ABL Priority
Collateral, which is junior
to a first-priority lien
for the benefit of
the lenders and other creditors under the ABL Facility,
in each case, subject to certain exceptions and permitted
liens.
The terms of the
2029 Notes are
governed by the
indenture, dated October
2, 2024, among Coronado
Finance
Pty Ltd,
as issuer, Coronado Global
Resources Inc, as
guarantor, the subsidiaries of
Coronado Global Resources
Inc, named therein, as additional guarantors,
Wilmington Trust, National
Association, as trustee and priority
lien
collateral trustee, or the Indenture. The
Indenture contains customary covenants
for high yield bonds, including,
but
not
limited
to,
limitations
on
investments,
liens,
indebtedness,
asset
sales,
transactions
with
affiliates
and
restricted payments, including payment of dividends on
capital stock.
As of December 31, 2024, the Company was in compliance
with all applicable covenants under the Indenture.
Refer to Part II, Item 8, Note 14. “Interest Bearing Liabilities”
for further information.
We
may
redeem
some
or
all
of
the
2029
Notes
at
the
redemption
prices
and
on
the
terms
specified
in
the
Indenture. In
addition, we
may,
from time
to time,
seek to
retire or
repurchase outstanding
debt through
open-
market purchases,
privately
negotiated transactions
or otherwise.
Such repurchases,
if any,
will be
upon such
terms
and
at
such
prices
we
may
determine,
and
will
depend
on
prevailing
market
conditions,
liquidity
requirements, contractual restrictions and other factors.
Loan – Curragh Housing Transaction
On May 16, 2024, the Company completed the Curragh Housing Transaction, an agreement for accommodation
services and
the sale
and leaseback
of housing
and accommodation
assets with
a regional
infrastructure and
accommodation service provider.
The Curragh Housing Transaction did not satisfy the sale criteria under ASC 606, Revenues from Contracts with
Customers and was deemed a financing arrangement. As a result, the
proceeds of $23.0 million (A$34.6 million)
received for the sale and leaseback of property,
plant and equipment owned by the Company in connection with
the
Curragh
Housing
Transaction
were
recognized
as
“Other
Financial
Liabilities”
on
the
Company’s
Consolidated Balance Sheet. The term of the financing arrangement is
ten years with an effective interest rate of
14.14%.
This
liability
will
be
settled
in
equal
monthly
payments
as
part
of
the
accommodation
service
arrangement.
In line
with the
Company’s capital
management strategy,
the Curragh
Housing Transaction
provides additional
liquidity. In
addition, the accommodation services component
of the Curragh Housing Transaction
is anticipated
to enhance the level of service for our employees at our
Curragh Mine.
In connection with the Curragh Housing Transaction,
the Company borrowed $26.9 million (A$40.4 million) from
the same
regional
infrastructure
and accommodation
service provider.
This amount
was recorded
as “Interest
Bearing
Liabilities”
in
the
Consolidated
Balance
Sheet.
The
amount
borrowed
is
payable
in
equal
monthly
installments over a period of ten years, with an effective
interest rate of 14.14%.
Refer to Part II, Item 8, Note 14. “Interest Bearing Liabilities”
and Note 15. “Other Financial Liabilities” for further
information.
Coronado Global Resources Inc. Form 10-K December 31,
2024
106
Surety bonds, letters of credit and bank guarantees
We
are
required
to
provide
financial
assurances
and
securities
to
satisfy
contractual
and
other
requirements
generated in the
normal course of
business. Some of
these assurances are provided
to comply with
state or other
government agencies’ statutes and regulations.
For
the
U.S.
Operations,
in
order
to
provide
the
required
financial
assurance
for
post
mining
reclamation,
we
generally
use surety
bonds.
We
also
use surety
bonds
and bank
letters
of credit
to collateralize
certain
other
obligations including contractual obligations under
workers’ compensation insurances. As of
December 31, 2024,
we had
outstanding surety
bonds of
$48.9 million
and $16.8
million of
letters of
credit issued
from our
letter of
credit sublimit available under the ABL Facility.
For the Australian Operations,
as at December 31, 2024,
we had bank guarantees
outstanding of $23.9 million,
including $4.7 million issued from the letter of credit sublimit available under the ABL
Facility, primarily in respect
of certain rail and port take-or-pay arrangements of the Company.
As at December 31,
2024, we have in aggregate
had total outstanding bank guarantees provided
of $40.7 million
to secure its obligations and commitments, including $21.4 million issued for the letter of credit sublimit available
under the ABL Facility.
Future regulatory changes
relating to these
obligations could result
in increased obligations,
additional costs or
additional collateral requirements.
Restricted deposits – cash collateral
As required
by certain
agreements, we
have total
cash collateral
in the
form of
deposits of
$68.5 million
as of
December 31, 2024 to
provide back-to-back support for bank
guarantees, financial payments, other performance
obligations,
various
other
operating
agreements
and
contractual
obligations
under
workers
compensation
insurance. These deposits are
restricted and classified as
non-current assets in the
Consolidated Balance Sheet.
In accordance with the terms of the ABL Facility, we may be required to cash collateralize the ABL Facility to the
extent
of
outstanding
letters
of
credit
after
the
expiration
or
termination
date
of
such
letter
of
credit.
As
of
December
31,
2024,
no
letter
of
credit
was
outstanding
after
the
expiration
or
termination
date
and
no
cash
collateral was required.
Dividend
During the year ended December 31, 2024, we paid $16.7 million in dividends to stockholders or CDI holders on
the ASX,
net of $0.1
million foreign exchange
gain on payment
of dividends to
certain CDI holders
that elected
to be paid in Australian dollars.
On
February
19,
2025,
the
Company’s
Board
of
Directors
declared
a
bi-annual
fully
franked
fixed
ordinary
dividend of $8.4 million, or
0.5 cents per CDI. The
dividend will have a
record date of March
12, 2025, Australia
time, and
be payable
on April
4, 2025,
Australia time.
The total
ordinary dividend
will be
funded from
available
cash.
Capital Requirements
Our main uses of cash have historically been the funding
of our operations, working capital, capital expenditure,
the payment of
interest and dividends.
We intend
to use cash
to fund debt
service payments
on our Notes,
the
ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures and, if
declared, payment of dividends.
Coronado Global Resources Inc. Form 10-K December 31,
2024
107
Historical Cash Flows
The
following
table
summarizes
our
cash
flows
for
the
year
ended
December
31,
2024,
2023
and
2022
as
reported in the accompanying Consolidated Financial Statements:
Cash Flow
For Year Ended December 31,
(US$ in thousands)
2024
2023
2022
Net cash provided by operating activities
74,039
268,282
926,643
Net cash used in investing activities
(226,336)
(238,168)
(208,343)
Net cash provided by (used in) financing activities
162,765
(24,679)
(784,251)
Net change in cash and cash equivalents
10,468
5,435
(65,951)
Effect of exchange rate changes on cash and cash
equivalents
(10,138)
(769)
(37,351)
Cash and cash equivalents at beginning of period
339,295
334,629
437,931
Cash and cash equivalents at end of period
339,625
339,295
334,629
Operating activities
Net cash provided by operating activities was $74.0 million for the year ended December 31, 2024, compared to
$268.3 million
for
the
year
ended
December
31,
2023.
The
decrease
in
cash
from
operating
activities
was
primarily driven
by lower
coal revenues,
higher operating
costs
and the
additional payment
of $51.5
million in
relation to the
stamp duty
on Curragh’s
acquisition, including
tax interest,
partially offset
by income tax
refunds
compared to income tax payments in 2023.
Net cash provided
by operating activities
was $268.3 million
for the year ended
December 31, 2023,
compared
to $926.6
million
for the
year
ended
December
31,
2022.
The
decrease
in
cash
from
operating
activities
was
primarily driven by lower coal revenues,
higher operating costs and income tax
paid of $147.1 million during the
year.
Investing activities
Net cash
used in
investing
activities was
$226.3 million
for the
year
ended December
31, 2024,
compared
to
$238.2 million
for the
year ended
December 31,
2023. Cash
spent on
capital expenditures
for the
year ended
December
31,
2024,
was
$248.2
million,
of
which
$83.6
million
was
related
to
the
Australian
Operations
and
$164.6 million was related to the U.S. Operations,
and $24.3 million redemption of restricted and other deposits.
The increase in capital
expenditures was largely
due to the investment
in organic growth projects
at both of our
U.S. Operations and Australian Operations.
Net cash
used in
investing
activities was
$238.2 million
for the
year
ended December
31, 2023,
compared
to
$208.3 million
for the
year ended
December 31,
2022. Cash
spent on
capital expenditures
for the
year ended
December
31,
2023,
was
$237.2
million,
of
which
$65.4
million
was
related
to
the
Australian
Operations
and
$171.2 million was related to the U.S. Operations.
Financing activities
Net cash provided by financing activities was $162.8 million for the year ended December 31,
2024 compared to
net cash
used in
financing activities
of $24.7
million for
the year
ended December 31,
2023. The
net cash
provided
by financing
activities for the
year ended December
31,
2024, largely
related to the
proceeds from interest
bearing
liabilities and
other financial
liabilities of
$449.9 million
partially offset
by the
repayment of
interest bearing
and
other financial liabilities of $246.7 million,
call premium paid on early redemption of debt of $9.8 million, payment
of debt issuance and other financing costs of $13.9 million and
dividend payment of $16.7 million.
Net cash used in financing activities was $24.7
million for the year ended December 31, 2023,
compared to cash
used
in
financing
activities
of
$784.3
million
for
the
year
ended
December
31,
2022.
The
net
cash
used
in
financing activities for the year ended December 31, 2023, largely related to dividend payments of $16.8 million,
payment of debt
issuance costs
in connection with
the establishment of
the ABL Facility
of $3.4 million
and the
remainder related to repayment of other financial liabilities.
Coronado Global Resources Inc. Form 10-K December 31,
2024
108
Contractual Obligations
The following is a summary of our contractual obligations
at December 31, 2024:
Payments Due By Year
Less than
1
‑
3
‑
More than
(US$ in thousands)
Total
1 Year
Years
Years
5 Years
Long
‑
term debt obligations
(1)
40,363
9,012
7,450
7,450
16,451
9.250% Senior Secured Notes
(2)
440,954
4,349
8,698
408,698
19,209
Mineral lease commitments
(3)
41,101
4,304
8,246
8,091
20,460
Lease commitments
112,916
26,980
52,643
33,293
—
Unconditional purchase obligations
(4)
111,400
111,400
—
—
—
Take
‑
or
‑
pay contracts
(5)
665,193
90,910
184,400
190,854
199,029
Total
contractual cash obligations
1,411,927
246,955
261,437
648,386
255,149
_____________________
(1)
Represents
financial
obligation
relating
to
amounts
outstanding
from
financing
equipment
purchases,
insurance premiums and financial liabilities for a sale and lease
back type arrangement.
(2)
Represents
financial
obligation
outstanding
under
the
Notes.
Refer
to
Note
14.
“Interest
Bearing
Liabilities” in the accompanying audited Consolidated Financial
Statements for additional discussion.
(3)
Represents
future
minimum
royalties
and
payments
under
mineral
leases.
Refer
to
Note
24.
“Commitments”
in
the
accompanying
audited
Consolidated
Financial
Statements
for
additional
discussion.
(4)
Represents firm purchase commitments for
capital expenditures (based on order to
suppliers for capital
purchases) for 2024.
(5)
Represents various short- and long-term
take-or-pay arrangements in
Australia associated with rail and
port commitments for the delivery of coal.
This
table
does
not
include
our
estimated
Asset
Retirement
Obligations,
or
ARO.
As
discussed
in
“—Critical
Accounting
Policies
and
Estimates—Carrying
Value
of
Asset
Retirement
Obligations”
below,
the
current
and
non-current
carrying
amount
of
our
ARO
involves
several
estimates,
including
the
amount
and
timing
of
the
payments required to satisfy
these obligations. The timing
of payments is based on numerous
factors, including
projected
mine
closure
dates.
Based
on
our
assumptions,
the
carrying
amount
of
our
ARO
as
determined
in
accordance with U.S. GAAP was $164.8 million as of
December 31, 2024.
Critical Accounting Policies and Estimates
The preparation
of
our Consolidated
Financial
Statements
in conformity
with
U.S. GAAP
requires
us
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
Consolidated
Financial
Statements
and
the
reported
amounts
of
revenue
and
expenses
during
the
reporting
period.
Listed
below
are
the
accounting
estimates
that
we
believe
are
critical
to
our
Consolidated
Financial
Statements due to the degree of
uncertainty regarding the estimates or assumptions involved and
the magnitude
of the asset, liability, revenue or expense being reported. All of these accounting
estimates and assumptions, as
well
as
the
resulting
impact
to
our
Consolidated
Financial
Statements,
have
been
discussed
with
the
Audit,
Governance and Risk Committee of our Board of Directors.
See Note 2.
“Summary of Significant
Accounting Policies”
to the accompanying
audited Consolidated Financial
Statements for a summary of our significant accounting policies.
Fair Value of Non-Financial Assets
Long-Lived Assets
We
review
the
carrying
value
of
long-lived
assets
to
be
used
in
operations
annually
or
whenever
events
or
changes
in
circumstances
indicate
that
the
carrying
amount
of
the
assets
or
asset
groups
might
not
be
recoverable.
Factors that would necessitate
an impairment assessment
include a significant adverse
change in the extent
or
manner in which an asset is
used, a significant adverse change in
legal factors or the business climate
that could
affect
the
value
of
the
asset
group
or
a significant
decline
in
the
observable
market
value
of
an
asset
group,
Coronado Global Resources Inc. Form 10-K December 31,
2024
109
among others. If such facts
indicate a potential impairment,
the recoverability of the asset
group is assessed by
determining whether the carrying value
of the asset group exceeds
the sum of the projected
undiscounted cash
flows expected to
result from
the use and
eventual disposition
of the asset
group over the
remaining economic
life of the asset
group. If the projected undiscounted cash
flows are less than
the carrying amount, an impairment
is recorded
for the
excess of
the carrying
amount over
the estimated
fair value,
which is
generally determined
using discounted future cash
flows. Any such write
down is included in
impairment expense in our
consolidated
statement of operations.
A high degree of
judgment is required
to estimate the
fair value of
our intangible and
long-lived assets, and
the
conclusions that
we reach
could vary
significantly based
on these
judgments.
We make
various
assumptions,
including assumptions regarding
future cash flows
in our
assessments of
fair value. The
assumptions about future
cash
flows
and
growth
rates
are
based
on
the
current
and
long-term
business
plans
related
to
the
long-lived
assets. Discount
rate assumptions
are based
on an
assessment of
the risk
inherent in
the future
cash flows
of
the long-lived assets.
The Company recognized
an impairment charge of
$10.6 million against property,
plant and equipment relating
to a long-standing
non-core idled asset
within the U.S.
Operations for the
year ended December
31, 2024. The
Company concluded
that no
impairment charges
were required
at any
of the
Company’s mining
assets for
the
years ended December 31, 2023 and 2022.
Goodwill Impairment
We had
a balance
of goodwill
of $28.0 million
recorded at
December 31,
2024, which
was generated
upon the
acquisition of Buchanan
in 2016. We
perform our annual assessment
of the recoverability of
our goodwill in
the
fourth quarter of each year. We utilize a qualitative assessment for determining whether the quantitative goodwill
impairment analysis is
necessary.
The accounting guidance
permits entities to
first assess qualitative
factors to
determine whether it is more
likely than not that the
fair value of a reporting
unit is less than its carrying
amount
as
a
basis
for
determining
whether
it
is
necessary
to
perform
the
quantitative
goodwill
impairment
test.
In
evaluating goodwill on
a qualitative basis,
we review the
business performance
of the Buchanan
mine complex
(the only reporting
unit with
a goodwill balance)
and evaluate
other relevant
factors as
identified in the
relevant
accounting
guidance
to
determine
whether
it
is
more
likely
than
not
that
an
indicator
of
impairment
exists
at
Buchanan. We consider whether there are any negative macroeconomic conditions, industry specific conditions,
market
changes,
increased
competition,
increased
costs
in
doing
business,
management
challenges,
legal
environments and how these factors might
impact company specific performance in future periods.
As part of the
analysis, we
also consider
fair value
determinations for
certain reporting
units that
have been
made at
various
points throughout
the current
and prior
year for
other purposes
to ensure
there is
no contrary
evidence to
our
analysis. At
December 31,
2024, we
did not
perform a
quantitative impairment
assessment as
we determined,
based on our qualitative assessment, that no impairment
indicators existed.
Carrying Value of Asset Retirement Obligations
The Company is required to maintain a liability
(and associated asset) for the expected value of future
retirement
obligations on their mines, in line with ASC 410, Asset
Retirement and Environmental Obligations.
Reclamation
of
areas
disturbed
by
mining
operations
must
be
performed
by
us
in
accordance
with
approved
reclamation plans and in compliance with state and federal laws in the states of West Virginia and Virginia
in the
U.S., and Queensland in Australia. For areas disturbed, a significant amount of the reclamation will take place in
the future, when
operations cease. There
were no assets
that were
legally restricted for
purposes of settling
asset
retirement obligations
as of
December 31,
2024. In
addition, state
agencies monitor
compliance with
the mine
plans, including reclamation.
Asset retirement
obligations are
determined for
each mine
using various
estimates and
assumptions, including
estimates
of
disturbed
area
as
determined
from
engineering
data,
estimates
of
future
costs
to
reclaim
the
disturbed
area
and
the
timing
of
the
related
cash
flows,
escalated
for
inflation
and
discounted
using
a credit-
adjusted risk-free rate, with an equivalent amount recorded as a long-lived asset. If the Company’s
assumptions
do not
materialize as
expected, the
actual cash
and
costs it
incurs could
be materially
different
than currently
estimated.
An accretion cost
is recorded each period
and the capitalized
cost is depreciated over
the useful life
of the related
asset. As reclamation work is performed or liabilities are otherwise settled,
the recorded amount of the liability is
reduced.
Coronado Global Resources Inc. Form 10-K December 31,
2024
110
A
review of
restoration
and
decommissioning
provisions
is carried
out annually
on a
mine-by-mine
basis,
and
adjustments are made to reflect any changes in estimates, if necessary. On an interim basis, we may update the
liability based on significant changes to the life of mine or significant increases in disturbances during the period.
Expected Credit Losses
For trade and related party
receivables carried at amortized
cost, we determine expected
credit losses, or ECL,
on a forward-looking basis. The amount of ECL is updated at each reporting date to reflect changes in credit risk
since the
initial recognition of
the respective
financial instrument. We
recognize the lifetime
ECL. ECL
is estimated
based on our
historic credit loss
experience, adjusted for
factors that are
specific to the
financial asset, general
economic
conditions,
financial
asset
type,
term
and
an
assessment
of
both
the
current
as
well
as
forecast
conditions, including
the expected
timing of
collection, at
the reporting
date, modified
for credit
enhancements
such
as
letters
of
credit
obtained.
To
measure
ECL,
trade
and
related
party
receivables
have
been
grouped
based on shared credit risk characteristics and the days
past due.
We consider
an event
of default
has occurred
when
a financial
asset is
significantly
past due
or other
factors
indicate that the debtor
is unlikely to pay
amounts owed to us.
A financial asset is
credit impaired when there
is
evidence that the counterparty
is in significant financial
difficulty or a
breach of contract, such
as default or past
due event
has occurred.
We write
off a
financial asset
when there
is information
indicating there
is no
realistic
prospect of recovery of the
asset from the counterparty.
The amount of the impairment
loss is recognized in the
consolidated statement of operations
and other comprehensive income
within “Decrease (increase) in
provision
for discounting
and
credit
losses”.
Subsequent
recoveries
of
amounts
previously
written
off
are credit
against
“Decrease (increase) provision for discounting and
credit losses” in the
consolidated statement of operations and
other comprehensive income.
Recoverable Coal Reserves
There are numerous uncertainties inherent
in estimating quantities and values of economically
recoverable coal
reserves,
including
many
factors
beyond
our
control.
As
a
result,
estimates
of
economically
recoverable
coal
reserves
are
by
their
nature
uncertain.
Information
about
our
reserves
consists
of
estimates
based
on
engineering,
economic
and
geological
data
assembled
and
analyzed
by
our
staff
and
third-party
qualified
persons. Our
reserves are
periodically reviewed
by an
independent third
party consultant.
Some of
the factors
and assumptions which impact economically recoverable reserve
estimates include:
•
geological settings;
•
historical production from the area compared with production from
other producing areas;
•
the assumed effects of regulations and taxes by governmental
agencies
;
•
assumptions governing future prices; and
•
future operating costs.
Each of these factors may in fact vary considerably from the
assumptions used in estimating reserves. For these
reasons,
estimates
of
the
economically
recoverable
quantities
of
coal
attributable
to
a
particular
group
of
properties, and classifications
of these reserves
based on the
risk of recovery
and estimates of
future net cash
flows,
may
vary
substantially.
Actual
production,
revenues
and
expenditures
with
respect
to
our
reserves
will
likely
vary
from
estimates,
and
these
variances
may
be
material.
See
Item 1A.
“Risk
Factors—We
rely
on
estimates of our
recoverable reserves,
which is complex
due to geological
characteristics of the
properties and
the number of assumptions made”
and Item 2. “Properties” for discussions
of the uncertainties in estimating
our
proven and probable coal reserves.
Taxes
We are required to
estimate the amount of
tax payable or
refundable for the
current year and the
deferred income
tax liabilities and assets
for the future tax consequences
of events that have
been reflected in our
Consolidated
Financial Statements
or tax
returns for
each taxing
jurisdiction in
which we
operate. This
process requires
that
deferred tax assets
be reduced by
a valuation allowance
if it is “more
likely than not”
that some portion
or all of
the deferred tax asset will not be realized. In our
evaluation, we take into account various factors, including
the
impact of various agreements
and transactions that
we enter into, taxable
income in carryback years,
reversals
of existing taxable temporary differences and the expected
amount of future taxable income. These assumptions
required significant
judgement
about forecasts
of future
taxable income
and are
consistent with
the plans
and
Coronado Global Resources Inc. Form 10-K December 31,
2024
111
estimates we use to manage our underlying business. Based on
these judgments we may record tax reserves or
adjustments
to
valuation
allowances
on
deferred
tax
assets
to
reflect
the
expected
realizability
of
future
tax
benefits. Actual income
taxes could vary
from these estimates
due to
future changes in
income tax
law, significant
changes
in
the
jurisdictions
in
which
we
operate,
our
inability
to
generate
sufficient
future
taxable
income
or
unpredicted results from the final
determination of each year’s
liability by taxing authorities. These
changes could
have a significant impact on our financial position.
Newly Adopted Accounting Standards and Accounting
Standards Not Yet Implemented
See Note 2. “Summary
of Significant Accounting
Policies” to the
accompanying audited
Consolidated Financial
Statements
for
a
discussion
of
newly
adopted
accounting
standards
and
accounting
standards
not
yet
implemented.
Coronado Global Resources Inc. Form 10-K December 31,
2024
112
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Our activities
expose us
to
a variety
of financial
risks, such
as commodity
price risk,
interest rate
risk, foreign
currency risk, liquidity risk and credit
risk. The overall risk management objective is
to minimize potential adverse
effects on our financial performance from those risks
which are not coal price related.
We manage
financial risk
through policies
and procedures
approved by
our Board
of Directors.
These specify
the responsibility
of the
Board
of Directors
and
management
with regard
to the
management
of financial
risk.
Financial risks are
managed centrally by
our finance
team under the
direction of the
Group Chief
Financial Officer.
The finance team manages risk exposures primarily through delegated authority limits approved by the Board of
Directors. The finance team regularly monitors our exposure
to these financial risks and reports to management
and
the
Board
of
Directors
on
a
regular
basis.
Policies
are
reviewed
at
least
annually
and
amended
where
appropriate.
We may use
derivative financial instruments such
as forward fixed
price commodity contracts, interest
rate swaps
and
foreign
exchange
rate
contracts
to
hedge
certain
risk
exposures.
Derivatives
for
speculative
purposes
is
strictly prohibited by the Treasury Risk Management Policy approved by our Board of
Directors. We use different
methods
to
measure
the
extent
to
which
we
are
exposed
to
various
financial
risks.
These
methods
include
sensitivity analysis in
the case of
interest rate, foreign
exchange and other
price risks and
aging analysis for
credit
risk.
Commodity Price Risk
Coal Price Risk
We
are
exposed
to
domestic
and
global
coal
prices.
Our
principal
philosophy
is
that
our
investors
would
not
consider
hedging
of
coal
prices
to
be
in
the
long-term
interest
of
our
stockholders.
Therefore,
any
potential
hedging of coal prices through long-term fixed price contracts is subject to the approval of our Board of Directors
and would only be adopted in exceptional circumstances.
The
expectation
of
future
prices
for
coal
depends
upon
many
factors
beyond
our
control.
Met
coal
has
been
volatile commodity over the
past ten years. The
demand and supply in the
Met coal industry changes
from time
to
time.
There
are
no
assurances
that
oversupply
will
not
occur,
that
demand
will
not
decrease
or
that
overcapacity will not occur, which could cause
declines in the prices of
coal, which could have a
material adverse
effect on our financial condition and results
of operations.
Access to
international markets
may be
subject to
ongoing interruptions
and trade
barriers due
to policies
and
tariffs
of
individual
countries.
We
may
or
may
not
be
able
to
access
alternate
markets
of
our
coal
should
interruptions or trade
barriers occur in
the future.
An inability for
Metcoal suppliers to
access international markets
would likely result
in an oversupply
of Met coal and
may result in
a decrease in
prices and or
the curtailment of
production.
We manage
our commodity
price risk
for our non-trading,
thermal coal
sales through
the use
of long-term
coal
supply agreements in our
U.S. Operations. In Australia, thermal
coal is sold
to Stanwell on a
supply contract. See
Part I, Item 1A. “Risk Factors—Risks related to the Supply Deed with Stanwell may
adversely affect our financial
condition and results of operations.”
Sales commitments in the
Met coal market are typically
not long-term in nature, and
we are therefore subject
to
fluctuations in
market pricing.
Certain coal
sales are
provisionally priced
initially.
Provisionally priced
sales are
those for which price finalization,
referenced to the relevant index,
is outstanding at the reporting
date. The final
sales price
is determined
within 7
to 90
days after
delivery to
the customer.
As of
December 31,
2024, we had
$23.5
million
of
outstanding
provisionally
priced
receivables
subject
to
changes
in
the
relevant
price
index.
If
prices decreased 10%,
these provisionally priced
receivables would decrease
by $2.3 million.
See Part
I, Item 1A.
“Risk Factors—Our profitability depends
upon the prices we receive for
our coal. Prices for coal
are volatile and
can fluctuate widely based upon a number of factors
beyond our control.”
Coronado Global Resources Inc. Form 10-K December 31,
2024
113
Diesel Fuel
We may
be exposed
to price
risk in
relation to
other commodities
from time
to time
arising from
raw materials
used in
our operations
(such as
gas or
diesel). The
expectation of
future prices
for diesel
depends upon
many
factors
beyond
our
control.
The
current
Israel-Palestine
conflict
could
create
significant
uncertainty
regarding
interruptions to global oil supply causing significant
volatility in prices of related commodities,
including the price
of diesel fuel we
purchase. These commodities
may be hedged
through financial instruments
if the exposure
is
considered material and where the exposure cannot be
mitigated through fixed price supply agreements.
The fuel required for our operations in 2025 will be purchased
under fixed-price contracts or on a spot basis.
Interest Rate Risk
Interest rate risk is the risk that a change in interest rates
on our borrowing facilities will have an adverse impact
on
our
financial
performance,
investment
decisions
and
stockholder
return.
Our
objectives
in
managing
our
exposure
to
interest
rates
include
minimizing
interest
costs
in
the
long
term,
providing
a
reliable
estimate
of
interest costs for the
annual work program
and budget and ensuring
that changes in interest
rates will not have
a material impact on our financial performance.
As
of
December
31,
2024,
we
had
$450.3
million
of
fixed-rate
borrowings,
including
the
Notes,
and
no variable-rate borrowings outstanding.
We currently do not hedge against interest rate
fluctuations.
Foreign Exchange Risk
A significant portion of our
sales are denominated in US$.
Foreign exchange risk is
the risk that our earnings
or
cash flows are adversely impacted by movements in
exchange rates of currencies that are not in US$.
Our main exposure
is to the
A$-US$ exchange rate
through our Australian
Operations, which have
predominantly
A$ denominated costs. Greater than 70% of expenses incurred at our Australian Operations are denominated in
A$. Approximately 30% of our
Australian Operations’ purchases are made with
reference to US$, which provides
a natural hedge against foreign
exchange movements on these
purchases (including fuel, several
port handling
charges, demurrage,
purchased coal
and some
insurance premiums).
Appreciation of
the A$
against US$
will
increase our Australian
Operations’ US$ reported
cost base and
reduce US$ reported
net income. For
the portion
of US$ required to purchase A$ to settle our Australian Operations’ operating costs, a 10% increase in the A$ to
US$ exchange
rate would
increase reported
total costs
and expenses
by approximately
$118.6
million for
the
year ended December 31, 2024.
Under normal market conditions, we generally do not consider it necessary to hedge our
exposure to this foreign
exchange risk.
However,
there
may be
specific commercial
circumstances,
such
as the
hedging
of significant
capital
expenditure,
acquisitions,
disposals
and
other
financial
transactions,
where
we
may
deem
foreign
exchange hedging
as appropriate
and
where a
US$ contract
cannot
be negotiated
directly with
suppliers
and
other third parties.
For our Australian
Operations, we
translate all
monetary assets
and liabilities
at the period-end
exchange rate,
all non-monetary
assets and
liabilities
at historical
rates
and revenue
and expenses
at the
average exchange
rates in effect
during the periods. The
net effect of
these translation adjustments
is shown in the
accompanying
Consolidated Financial Statements within components
of net income.
We currently do not hedge our non-US$ exposures
against exchange rate fluctuations.
Credit Risk
Credit risk is the risk of
sustaining a financial loss
as a result of a counterparty
not meeting its obligations
under
a financial instrument or customer contract.
We are exposed
to credit risk
when we have financial
derivatives, cash deposits,
lines of credit, letters
of credit
or bank guarantees
in place with
financial institutions.
To
mitigate against credit risk
from financial counterparties,
we have minimum credit rating requirements with financial
institutions where we transact.
We
are
also
exposed
to
counterparty
credit
risk
arising
from
our
operating
activities,
primarily
from
trade
receivables. Customers who wish to trade
on credit terms are subject to credit
verification procedures, including
an assessment of their independent credit rating, financial position, past experience and industry reputation.
We
monitor the financial performance
of counterparties on a routine
basis to ensure credit
thresholds are achieved.
Where required, we will request additional credit
support, such as letters of credit,
to mitigate against credit risk.
Credit
risk
is
monitored
regularly,
and
performance
reports
are
provided
to
our
management
and
Board
of
Directors.
Coronado Global Resources Inc. Form 10-K December 31,
2024
114
As of December
31, 2024,
we had financial
assets of
$617.9 million, comprising
of cash and
cash equivalents,
trade receivables and
restricted deposits,
which are exposed
to counterparty
credit risk. These
financial assets
have been assessed under ASC 326, Financial Instruments – Credit Losses, and
a provision for discounting and
credit
losses
of
$0.7
million
was
recorded
as
of
December
31,
2024.
See
Item
8.
“Financial
Statements
and
Supplementary Data—Note 7. Provision for Discounting and
Credit Losses.”
Coronado Global Resources Inc. Form 10-K December 31,
2024
115
ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY
DATA
TABLE OF CONTENTS
Page
Number
116
117
118
119
120
0
)
154
Coronado Global Resources Inc. Form 10-K December 31,
2024
116
Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
December 31,
2024
December 31,
2023
Current assets:
Cash and cash equivalents
$
$
Trade receivables, net
6
Inventories
8
Income tax receivable
21
Other current assets
9
Total
current assets
Non-current assets:
Property, plant and
equipment, net
10
Right of use asset – operating leases, net
12
Goodwill
Intangible assets, net
Restricted deposits
25
Deferred income tax assets
21
Other non-current assets
9
Total
assets
$
$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
$
Accrued expenses and other current liabilities
11
Asset retirement obligations
13
Contract obligations
16
Lease liabilities
12
Interest bearing liabilities
14
Income tax payable
21
Other current financial liabilities
15
Total
current liabilities
Non-current liabilities:
Asset retirement obligations
13
Contract obligations
16
Deferred consideration liability
17
Interest bearing liabilities
14
Other financial liabilities
15
Lease liabilities
12
Deferred income tax liabilities
21
Other non-current liabilities
Total
liabilities
$
$
Common stock $
December 31, 2023
Series A Preferred stock $
Share issued and outstanding as of December 31, 2024 and
December 31,
2023
Additional paid-in capital
Accumulated other comprehensive losses
23
(
137,560
)
(
89,927
)
Retained earnings
Total
stockholders’ equity
Total
liabilities and stockholders’ equity
$
$
See accompanying notes to consolidated financial
statements.
Coronado Global Resources Inc. Form 10-K December 31,
2024
117
Consolidated Statements of Operations and Comprehensive
Income
(In US$ thousands, except share data)
Year ended December 31,
Note
2024
2023
2022
Revenues:
Coal revenues
$
$
$
Other revenues
Total
revenues
3
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
Depreciation, depletion and amortization
Freight expenses
Stanwell rebate
Other royalties
Selling, general, and administrative expenses
Total
costs and expenses
Other income (expenses):
Interest expense, net
(
58,856
)
(
56,751
)
(
67,632
)
Loss on debt extinguishment
(
14,732
)
(
1,385
)
(
5,336
)
Decrease (increase) in provision for discounting and
credit losses
(
3,821
)
Other, net
4
Total
other expense, net
(
69,647
)
(
48,156
)
(
42,994
)
(Loss) income before tax
(
149,190
)
Income tax (expense) benefit
21
(
231,574
)
Net (loss) income attributable to Coronado Global
Resources Inc.
$
(
108,881
)
$
$
Other comprehensive loss, net of income taxes:
Foreign currency translation adjustment
(
47,633
)
(
47,195
)
Total
other comprehensive (loss) income
(
47,633
)
(
47,195
)
Total
comprehensive (loss) income attributable to
Coronado Global Resources Inc.
$
(
156,514
)
$
$
(Loss) earnings per share of common stock
Basic
5 (c)
(
0.65
)
Diluted
5 (c)
(
0.65
)
See accompanying notes to consolidated financial
statements.
Coronado Global Resources Inc. Form 10-K December 31,
2024
118
Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
paid in
capital
Accumulated
other
comprehensive
losses
(Accumulated
losses) Retained
earnings
Total
stockholders'
equity
Shares
Amount
Series A
Amount
Balance December 31, 2021
$
$
$
$
(
44,228
)
$
$
Net income
—
—
Other comprehensive loss
—
—
(
47,195
)
(
47,195
)
Total comprehensive (loss) income
—
—
(
47,195
)
Stock-based compensation for equity
classified awards
—
—
Dividends
—
—
(
701,655
)
(
701,655
)
Balance December 31, 2022
$
$
$
$
(
91,423
)
$
$
Net income
—
—
Other comprehensive income
—
—
Total comprehensive income
—
—
Stock-based compensation for equity
classified awards
—
—
Dividends
—
—
(
16,765
)
(
16,765
)
Balance December 31, 2023
$
$
$
$
(
89,927
)
$
$
Net loss
—
—
(
108,881
)
(
108,881
)
Other comprehensive loss
—
—
(
47,633
)
(
47,633
)
Total comprehensive loss
—
—
(
47,633
)
(
108,881
)
(
156,514
)
Stock-based compensation for equity
classified awards
—
—
Dividends
—
—
(
16,765
)
(
16,765
)
Balance December 31, 2024
$
$
$
$
(
137,560
)
$
$
See accompanying notes to consolidated financial
statements
Coronado Global Resources Inc. Form 10-K December 31,
2024
119
Consolidated Statements of Cash Flows
(In US$ thousands)
Year Ended December 31,
2024
2023
2022
Cash flows from operating activities:
Net (loss) income
$
(
108,881
)
$
$
Adjustments to reconcile net income to cash and
cash equivalents provided
by operating activities:
Depreciation, depletion and amortization
Change in estimate of asset retirement obligation
(
3,523
)
(
3,151
)
Impairment of non-core assets
Amortization of right of use asset - operating leases
Amortization of deferred financing costs
Non-cash interest expense
Amortization of contract obligations
(
31,443
)
(
33,026
)
(
36,519
)
Equity-based compensation expense
Loss on debt extinguishment
Deferred income taxes
(
39,526
)
(
21,338
)
Reclamation of asset retirement obligations
(
9,724
)
(
5,334
)
(
4,543
)
(Decrease) increase in provision for discounting and
credit losses
(
207
)
(
4,216
)
Gain on translation of short-term inter-entity balances
(
10,028
)
Other
(
694
)
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables,
net
(
156,818
)
Inventories
(
32,774
)
(
41,243
)
Other current assets
(
2,778
)
(
477
)
(
12,365
)
Accounts payable
(
9,366
)
(
27,664
)
Accrued expenses and other current liabilities
(
97,895
)
(
25,435
)
Operating lease liabilities
(
21,050
)
(
14,597
)
(
8,244
)
Income tax payable
(
164,834
)
Change in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
(
248,142
)
(
237,205
)
(
199,716
)
Proceeds from the disposal of property, plant, and equipment
Purchase of restricted and other deposits
(
2,462
)
(
27,213
)
(
9,761
)
Redemption of restricted and other deposits
Net cash used in investing activities
(
226,336
)
(
238,168
)
(
208,343
)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other
financial liabilities
Debt issuance costs and other financing costs
(
13,912
)
(
3,436
)
Principal payments on interest bearing liabilities
and other financial liabilities
(
246,668
)
(
4,361
)
(
81,310
)
Call premiums paid on early redemption of debt
(
9,768
)
(
2,557
)
Principal payments on finance lease obligations
(
68
)
(
127
)
(
140
)
Dividends paid
(
16,679
)
(
16,755
)
(
700,244
)
Net cash provided by (used in) financing activities
(
24,679
)
(
784,251
)
Net increase (decrease) in cash and cash equivalents
(
65,951
)
Effect of exchange rate changes on cash and cash equivalents
(
10,138
)
(
769
)
(
37,351
)
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
$
$
Supplemental disclosure of cash flow information:
Cash payments for interest
$
$
$
Cash (refund) paid for taxes
$
(
67,842
)
$
$
Restricted cash
$
$
$
See accompanying notes to consolidated financial
statements
Coronado Global Resources Inc. Form 10-K December 31,
2024
120
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
1.
Description of Business, Basis of Presentation
(a)
Nature of operations
Coronado
Global
Resources Inc.
(together
with
its
subsidiaries,
the
“Company”
or
“Coronado”)
is
a
global
producer, marketer,
and exporter of a full range
of metallurgical coals, an
essential element in the production
of
steel. The Company
has a portfolio
of operating mines
and development projects
in Queensland, Australia
and
in the
states of Pennsylvania,
Virginia and West
Virginia in the
United States, or
U.S. For details
of the
Company’s
capital structure, refer to Note 5 “Capital Structure” for
further information.
(b)
Basis of Presentation
The
Consolidated
Financial
Statements
have
been
prepared
in
accordance
with
requirements
of
the
U.S.
Generally Accepted
Accounting
Principles,
or U.S.
GAAP and
are presented
in U.S.
dollars,
unless otherwise
stated.
The Consolidated Financial
Statements include the
accounts of the
Company and its
subsidiaries. The Company,
or
Coronado,
are
used
interchangeably
to
refer
to
Coronado
Global
Resources
Inc.
or
Coronado
Global
Resources Inc.
and its
subsidiaries, as
appropriate to
the context.
All intercompany
balances and
transactions
have been eliminated on consolidation.
(c)
Certain Significant Risks and Uncertainties
External
factors,
including
general
economic
conditions,
international
events
and
circumstances,
competitor
actions, governmental actions
and regulations are beyond
the Company’s control
and can cause fluctuations
in
demand
for
coal
and
volatility
in
the
price
of
commodities.
This
in
turn
may
adversely
impact
the
Company’s
future operating results, purchase or investment opportunities
in the coal mining industry.
Concentration of customers
The Company has a credit
policy that establishes procedures
to determine creditworthiness
and credit limits for
trade customers and counterparties
in the over-the-counter coal
market. Generally,
credit is extended based on
an evaluation
of the customer’s
financial condition.
Collateral is
not generally
required, unless
credit cannot
be
established.
Payments from customers are generally due between
shipment
or
delivery
of
goods.
The
timing
between
the
recognition
of
revenue
and
receipt
of
payment
is
not
significant.
The Company had certain customers
whose accounts receivable balances individually represented
% or more
of
the
Company’s
total
accounts
receivable,
or
whose
revenue
individually
represented
%
or
more
of
the
Company’s total revenue.
The
following
table
summarizes
any
customer
whose
revenue
individually
represented
%
or
more
of
the
Company’s total coal revenues in the year ended
December 31, 2024.
Year Ended December 31,
2024
2023
2022
Tata
Steel
JFE Steel
For the year
ended December
31, 2024, $
%, of total
coal revenues,
were attributable
to
%, of total
coal
revenues were
attributable
to
%, of total
coal revenues
were attributable to
%, of
accounts receivable.
As of
December 31,
2023,
the Company had
%, of accounts receivable.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
121
The
following
table
presents
revenues
as
a
percent
of
total
revenue
from
external
customers
by
geographic
region:
Year Ended December 31,
2024
2023
2022
Asia
North America
South America
Europe
Australia
Brokered sales
Total
The Company uses shipping destination as the
basis for attributing revenue to individual
countries. The transfer
of title on
brokered transactions
may occur at
a point that
does not reflect
the end usage
point, therefore
these
sales are reflected as exports and classified as brokerage sales.
Concentration of labor
Out
of
the
Company’s
total
employees,
%
as
of
December
31,
2024,
are
subject
to
the
Curragh
Mine
Enterprise
Agreement
2023.
This
agreement
covers
work
carried out
by permanent,
full-time,
temporary,
and
casual coal mining
employees engaged
by Curragh
to fulfill
production, maintenance
and processing
activities.
Other than
the Curragh
Mine Enterprise
Agreement 2023,
there are
no other
collective bargaining
agreements
or union contracts covering employees of the Company
.
Transportation
The Company depends
upon port and
rail transportation
systems to deliver
coal to
its customers.
Disruption of
these
transportation
services
due
to
weather-related
problems,
mechanical
difficulties,
strikes,
lockouts,
bottlenecks, and other
events could temporarily
impair the Company’s
ability to supply
coal to its
customers. In
the past, disruptions in these services have resulted in
delayed shipments and production interruptions.
2.
Summary of Significant Accounting Policies
(a)
Newly Adopted Accounting Standards
Accounting Standards
Update, or
ASU, No. 2023-07
“Segment Reporting”
(Topic
280)
: In November
2023, the
FASB
issued
ASU
2023-07,
which
intended
to
improve
reportable
segment
disclosure
requirements
through
enhanced
disclosures
of
significant
segment
expenses.
The
guidance
was
effective
and
implemented
in
the
Company’s consolidated financial statements for the
year ended December 31, 2024.
The updated standard
impacted only the
financial statement disclosures with
no impact on
the Company’s results
of operation, cash flows and financial position.
Such new disclosures are included in Note 3 “Segment Information”.
(b)
Accounting Standards Not Yet
Implemented
ASU 2023-09
“Income Taxes”
(Topic
740)
: In
December
2023, the
FASB
issued 2023-09,
which modifies
the
rules on
income tax
disclosures to
require companies
to disclose:
specific categories
in the
rate reconciliation,
the income
or loss
from continuing
operations before income
tax expense
or benefit
(separated between
domestic
and
foreign)
and
income
tax
expense
or
benefit
from
continuing
operations
(separated
by
federal,
state,
and
foreign). The updated standard is
effective for annual periods beginning after December
15, 2024. The Company
is currently evaluating the impact that the updated standard
will have in its financial statement disclosures.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
122
ASU 2024-03
“Income Statement
– Reporting
Comprehensive Income
– Expense
Disaggregation Disclosures”
(Subtopic 220-40)
: Disaggregation of Income
Statement Expenses. In
November 2024, the
FASB
issued 2024-
03, which require disclosure, in
the notes to financial statements, of
specified information about certain costs and
expenses. The amendments aim to improve financial reporting by requiring that public business entities disclose
additional information about
specific expense categories
in the notes
to financial statements
at interim
and annual
reporting periods. The
updated standard is
effective for
annual reporting periods
beginning after December
15,
2026,
and
interim
reporting
periods
beginning
after
December
15,
2027.
Early
adoption
is
permitted.
The
Company
is
currently
evaluating
the
impact
that
the
updated
standard
will
have
in
its
financial
statement
disclosures.
There have been
no other recent
accounting pronouncements not yet
effective that have significance,
or potential
significance, to the Company’s Consolidated Financial
Statements.
(c) Use of Estimates
The preparation
of Consolidated
Financial
Statements
in conformity
with U.S. GAAP
requires
management
to
make certain
judgements, estimates
and assumptions
that affect
the reported
amounts of
assets and
liabilities
and disclosure of
contingent assets and contingent
liabilities at the
date of the
Consolidated Financial Statements
and
the
reported
amounts
of
revenues
and
expenses
during
the
reporting
periods.
Actual
results
could
differ
materially
from
those
estimates.
Significant
items
subject
to
such
estimates
and
assumptions
include
asset
retirement obligations; useful lives for depreciation,
depletion and amortization; expected credit
losses; deferred
income tax
assets and
liabilities; values
of coal
properties;
goodwill; workers’
compensation
liability and
other
contingencies.
(d)
Foreign Currency
Financial Statements of foreign operations
The reporting currency of the Company is the U.S. Dollar,
or US$.
Functional
currency
is
determined
by
the
primary
economic
environment
in
which
an
entity
operates.
The
functional currency of
the Company
and its subsidiaries
is the US$,
with the exception
of two foreign
operating
subsidiaries, Coronado Curragh Pty Ltd, or Curragh, and its immediate
parent, Coronado Australia Holdings Pty
Ltd, or CAH,
whose functional
currency is
the Australian
dollar,
or A$, since
Curragh’s predominant
sources of
operating expenses are denominated in that currency.
Assets and liabilities
are translated at
the year-end exchange
rate and items
in the statement
of operations are
translated at average rates with gains and losses from
translation recorded in other comprehensive losses.
Foreign Currency Transactions
Monetary
assets
and
liabilities
are
remeasured
at
year-end
exchange
rates
while
non-monetary
items
are
remeasured at historical rates.
Gains and
losses
from foreign
currency
remeasurement
related
to Curragh’s
US$ receivables
are included
in
coal revenues.
All other
gains
and losses
from foreign
currency
remeasurement
and foreign
currency
forward
contracts
are
included
in
“Other,
net”,
with
exception
of
foreign
currency
gains
or
losses
on
long-term
intercompany
loan
balances
which
are classified
within
“Accumulated
other
comprehensive
losses.”
The
total
aggregate impact of foreign currency
transaction gains or losses on the
Consolidated Statements of Operations
and Comprehensive
Income was
a net gain
of $
December 31,
2024,
2023 and
2022, respectively.
The total
impact of
foreign currency
transactions related
to
US$ coal
sales in
Australia (included
in the
total above)
was a
net gain
of $
and net gain of $
(e)
Cash and Cash Equivalents
Cash and cash
equivalents include cash
at bank and
short-term highly liquid investments
with an original
maturity
date
of
three
months
or
less.
The
Company
had
$
investments classified as cash equivalents for the years
ended December 31, 2024 and 2023, respectively.
“Cash
and
cash
equivalents”,
as disclosed
in
the
accompanying
Consolidated
Balance
Sheets,
includes
$
million of restricted cash at December 31, 2024 and
2023.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
123
(f)
Trade Accounts Receivables
Trade accounts receivables represent
customer obligation that
is derived
from revenue recognized
from contracts
with customers. The Company extends trade credit to its customers in the ordinary course of business based on
an evaluation of the individual customer’s financial
condition.
Trade receivables are initially recorded at fair value
and subsequently at amortized cost, less any Expected
Credit Losses, or ECL.
The Company
determines
ECL on
a forward
-looking
basis
for the
expected
lifetime
losses
on trade
accounts
receivable.
The
amount
of
ECL
is updated
at each
reporting
date
to reflect
changes
in credit
risk
since initial
recognition of the respective
financial instrument. The
ECL is estimated based
on the Company’s
historic credit
loss experience, adjusted
for factors that
are specific to
the financial asset,
general economic conditions,
financial
asset type, term and an assessment of both the current as well as forecast conditions, including expected timing
of
collection,
at
the
reporting
date,
modified
for
credit
enhancements
such
as
letters
of
credit
obtained.
To
measure ECL,
trade receivables
have been
grouped
based on
shared credit
risk characteristics
and the
days
past due.
The amount of credit
loss is recognized in
the Consolidated Statements
of Operations and Other Comprehensive
Income within “Provision for discounting and credit losses.” The Company writes off a financial asset when there
is information indicating there is no realistic prospect of recovery of the asset from the counterparty. Subsequent
recoveries of amounts
previously written off
are credited against “Provision
for discounting and
credit losses” in
the Consolidated Statements of Operations and Other
Comprehensive Income.
(g)
Inventories
Coal is recorded
as inventory at the
point in time
the coal is
extracted from the
mine. Raw coal
represents coal
stockpiles that
may be
sold in
current condition
or may
be further
processed prior
to shipment
to a
customer.
Saleable coal represents coal stockpiles which require
no further processing prior to shipment to a customer.
Coal inventories are stated
at the lower of average
cost and net realizable
value. The cost of coal
inventories is
determined based
on an
average cost
of production,
which includes
all costs
incurred to
extract, transport
and
process
the coal.
Net
realizable
value
considers
the
estimated
sales
price
of
the
particular
coal
product,
less
applicable selling costs, and, in the case of raw coal, estimated
remaining processing costs.
Supplies
inventory
is
comprised
of
replacement
parts
for
operational
equipment
and
other
miscellaneous
materials and supplies
required for mining
which are stated
at cost on the
date of purchase.
Supplies inventory
is valued at
the lower of
average cost or
net realizable
value, less a
reserve for obsolete
or surplus items.
This
reserve incorporates several factors, such as anticipated usage, inventory turnover and inventory levels. It is not
customary to sell these inventories; the Company plans
to use them in mining operations as needed.
(h)
Property, Plant and
Equipment, Impairment of Long-Lived Assets and Goodwill
Property, Plant, and
Equipment
Costs for mine development incurred to
expand capacity of operating mines or to
develop new mines and certain
mining equipment are capitalized and charged to operations on the
hours of usage or units of production method
over
the
estimated
proven
and
probable
reserve
tons
directly
benefiting
from
the
capital
expenditures.
Mine
development
costs
include
costs
incurred
for
site
preparation
and
development
of
the
mines
during
the
development stage.
Mineral rights
and reserves
acquired are
measured at
cost and
are depleted
on a
units of
production
method
over
the
estimated
proven
and
probable
reserve
tons
of
the
relevant
mineral
property.
Capitalized costs related to internal-use software are amortized on
a straight-line basis over the estimated useful
lives of the assets.
Property,
plant,
and
equipment
are
recorded
at
cost
and
include
expenditures
for
improvements
when
they
substantially
increase
the
productive
lives
of existing
assets.
Depreciation
is calculated
using
the
straight-line
method over
the estimated
useful lives
of the
depreciable assets of
and
transportation
vehicles,
improvements.
Maintenance and
repair costs
are expensed to
operations as
incurred. When
equipment is
retired or
disposed,
the related cost
and accumulated
depreciation are
removed from
the respective
accounts and any
gain or loss
on disposal is recognized in operations.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
124
Impairment of long-lived assets
Long-lived
assets,
such
as
property,
plant,
and
equipment,
and
purchased
intangible
assets
subject
to
amortization,
are
reviewed
for
impairment
whenever
events
or
changes
in
circumstances
indicate
that
the
carrying amount of an
asset may not be
recoverable. If circumstances
require a long-lived asset
or asset group
be
tested
for
possible
impairment,
the
Company
first
compares
undiscounted
cash
flows
expected
to
be
generated by
that asset
or asset
group to
its carrying
amount. If
the carrying
amount of
the long-lived
asset or
asset group
is not
recoverable on
an undiscounted
cash flow
basis, an
impairment is
recognized to
the extent
that the
carrying amount
exceeds its
fair value.
Fair value
is determined
through
various valuation
techniques
including
discounted
cash
flow
models,
quoted
market
values
and
third-party
independent
appraisals,
as
considered necessary.
In circumstances where
the Company intends
to sell a
long-lived or asset
group, that did
not satisfy the
criteria
to be
classified
as
held-for-sale,
an
impairment
charge
is recorded
when
the
carrying
amount
of the
disposal
group exceeds its estimated fair value, less costs to sell.
The Company recognized
an impairment charge of
$
to a long-standing
non-core idled asset
within the U.S.
Operations for the
year ended December
31, 2024. The
Company concluded
that
years ended December 31, 2023 and 2022.
Goodwill
Goodwill is an asset
representing the future economic
benefits arising from other
assets acquired in a
business
combination
that
are
not
individually
identified
and
separately
recognized.
In
connection
with
the
Buchanan
acquisition on
March 31,
2016, the
Company recorded
goodwill in
the amount
of $
performed a
qualitative assessment
to determine
if impairment
was required
at December 31,
2024 and
2023.
Based upon the
Company’s qualitative
assessment, it
is more likely
than not that
the fair value
of the reporting
unit is greater
than its carrying amount
at December 31, 2024 and
2023. As a
result,
and the balance
of goodwill at
both December 31, 2024 and
2023 was $
any indicators of impairment since the acquisition date.
Goodwill is not
amortized but is reviewed
for impairment annually or
when circumstances or other
events indicate
that impairment may have occurred. The Company follows the
guidance in Accounting Standards Update 2017-
04
“
Intangibles
–
Goodwill
and
Other:
Simplifying
the
Test
for
Goodwill
Impairment
”
(ASU 2017-04).
The
Company makes a qualitative assessment of whether it is more
likely than not that a reporting unit’s fair value is
less than its carrying
amount. Circumstances that are considered as
part of the qualitative assessment
and could
trigger a quantitative impairment test
include but are not limited
to: a significant adverse change
in the business
climate; a significant
adverse legal
judgment; adverse
cash flow trends;
an adverse
action or assessment
by a
government agency; unanticipated competition; and a significant restructuring
charge within a reporting unit. If a
quantitative assessment is determined to be necessary, the Company compares the fair value of a reporting unit
with its carrying
amount, including goodwill.
If the carrying
amount of a
reporting unit
exceeds its fair
value, the
Company recognizes an
impairment charge for
the amount by which
the carrying amount
exceeds its fair
value
to the extent of the amount of goodwill allocated to that
reporting unit.
The Company defines reporting
units at the mining
asset level. For purposes
of testing goodwill for
impairment,
goodwill has been allocated to the reporting units to the
extent it relates to each reporting unit.
(i)
Asset Retirement Obligations
The
Company’s
asset
retirement
obligation,
or
ARO,
liabilities
primarily
consist
of
estimates
of
surface
land
reclamation
and
support
facilities
at
both
surface
and
underground
mines
in
accordance
with
applicable
reclamation laws and regulations in the U.S. and Australia
as defined by each mining permit.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
125
The Company
estimates its ARO
liabilities for
final reclamation
and mine
closure based upon
detailed engineering
calculations of the amount
and timing of the future
cash spending for a
third party to perform
the required work.
Spending
estimates
are
escalated
for
inflation
and
then
discounted
at
the
credit-adjusted,
risk-free
rate.
The
Company records
an ARO asset
associated with
the discounted
liability for final
reclamation and
mine closure.
The obligation
and corresponding
asset are recognized
in the period
in which the
liability is incurred.
The ARO
asset
is
amortized
on
the
units-of-production
method
over
its
expected
life
of
the
related
asset
and
the
ARO
liability is accreted to the projected
spending date. As changes
in estimates occur (such as
mine plan revisions,
changes in
estimated costs
or changes
in timing
of the
performance of
reclamation activities),
the revisions
to
the
obligation
and
asset
are
recognized
at
the
appropriate
credit-adjusted,
risk-free
rate.
The
Company
also
recognizes
an
obligation
for
contemporaneous
reclamation
liabilities
incurred
as
a
result
of
surface
mining.
Contemporaneous reclamation consists primarily
of grading, topsoil replacement
and re-vegetation of backfilled
pit areas. To
settle the liability,
the obligation is paid,
and to the extent
there is a difference
between the liability
and
the
amount
of cash
paid,
a
gain
or
loss
upon
settlement
is
recorded.
The
Company
annually
reviews
its
estimated future cash flows for its asset retirement obligations.
(j)
Borrowing costs
Borrowing costs are
recognized as an
expense when they
are incurred, except
for interest charges
attributable
to major projects with substantial development and construction phases which are capitalized
as part of the cost
of the asset. There was
(k)
Leases
From time to
time, the Company
enters into contractual
agreements to
lease property,
plant and equipment.
In
addition, the Company also enters into mining services contracts which may include embedded leases of mining
equipment. Based
upon the
Company’s assessment
of the
terms of
a specific
lease agreement,
the Company
classifies a lease as either finance or operating.
Finance leases
Right of Use, or ROU, assets
related to finance leases are presented
in “Property,
plant and equipment, net” on
the Consolidated Balance
Sheets. Lease
liabilities related
to finance leases
are presented in
“Lease Liabilities”
(current) and “Lease Liabilities” (non-current) on the Consolidated
Balance Sheets.
Finance lease ROU assets and lease liabilities are recognized at the commencement date based on the present
value of the
future lease payments
over the lease
term. The
discount rate used
to determine
the present
value
of the
lease
payments
is the
rate
implicit in
the
lease unless
that
rate cannot
be readily
determined,
in which
case, the
Company utilizes
its incremental
borrowing
rate in
determining the
present value
of the
future lease
payments. The incremental borrowing
rate is the rate
of interest that the
Company would have to
pay to borrow
on
a
collateralized
basis
over
a
similar
term
an
amount
equal
to
the
lease
payments
in
a
similar
economic
environment.
Operating leases
ROU assets
related to
operating leases
are presented
as “Right
of Use
assets –
operating leases,
net” on
the
Consolidated
Balance
Sheets.
Lease
liabilities
related
to
operating
leases
that
are
subject
to
the
ASC
842
measurement requirements such as operating
leases with lease terms
greater than twelve months are
presented
in “Lease Liabilities” (current) and “Lease Liabilities” (non-current)
on Consolidated Balance Sheets.
Operating lease
ROU assets and
lease liabilities
are recognized at
the commencement date
based on
the present
value of the
future lease payments
over the lease
term. The
discount rate used
to determine
the present
value
of the
lease
payments
is the
rate
implicit in
the
lease unless
that
rate cannot
be readily
determined,
in which
case, the
Company utilizes
its incremental
borrowing
rate in
determining the
present value
of the
future lease
payments. The incremental borrowing
rate is the rate
of interest that the
Company would have to
pay to borrow
on
a
collateralized
basis
over
a
similar
term
an
amount
equal
to
the
lease
payments
in
a
similar
economic
environment. Operating
lease ROU
assets may
also include
any cumulative
prepaid or
accrued rent
when the
lease payments
are uneven
throughout the
lease term.
The ROU
assets and
lease liabilities
may also
include
options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The ROU
asset includes
any lease
payments made
and lease
incentives received
prior to
the commencement
date.
The
Company
has
lease
arrangements
with
lease
and
non-lease
components
which
are
accounted
for
separately.
Non-lease
components
of
the
lease
payments
are
expensed
as
incurred
and
are
not
included
in
determining the present value.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
126
(l)
Royalties
Lease rights
to coal
lands are
often acquired
in exchange
for royalty
payments. For
our Australian
Operations,
royalties
are
payable
monthly
as
a
percentage
of
the
gross
realization
from
the
sale
of
the
coal
mined
using
surface mining methods
and underground methods.
At our U.S. Operations,
royalties are payable
monthly as a
percentage
of
the
gross
realization
for
coal
produced
using
underground
mining
methods.
Advance
mining
royalties are advance
payments made to
lessors under terms
of mineral lease
agreements that
are recoupable
against
future
production.
The
Company
had
advance
mining
royalties
of
$
respectively, included
in “Other current assets” as of December 31, 2024
and 2023.
(m) Stanwell Rebate
The Stanwell rebate relates to
a contractual arrangement entered into
by the Company and
Stanwell Corporation
Limited, a State
of Queensland
owned electricity
generator, which
requires payment
of a rebate
for export coal
sold from some of Curragh’s
mining tenements. The rebate obligation is
accounted for as an executory
contract
and the expense is recognized as incurred.
(n)
Revenue Recognition
The Company accounts for
a contract when it
has approval and commitment
from both parties, the
rights of the
parties are identified,
payment terms
are identified,
the contract has
commercial substance
and collectability
of
consideration is probable. Once a contract
is identified, the Company evaluates
whether the combined or single
contract should be accounted for as more than one performance
obligation.
The Company recognizes revenue when
control is transferred to the customer.
For the Company’s contracts,
in
order to determine
the point
in time when
control transfers
to customers, the
Company uses
standard shipping
terms to
determine
the timing
of transfer
of
legal title
and the
significant
risks
and rewards
of ownership.
The
Company also considers other
indicators including timing
of when the Company
has a present right
to payment
and
when
physical
possession
of
products
is
transferred
to
customers.
The
amount
of
revenue
recognized
includes any
adjustments for
variable consideration,
which is
included in
the transaction
price and
allocated to
each
performance
obligation
based
on
the
relative
standalone
selling
price.
The
variable
consideration
is
estimated through the course of the contract using management’s
best estimates.
The majority of
the Company’s revenue is derived
from short term
contracts where the
time between confirmation
of sales orders and collection of cash is not more than
a few months.
Taxes
assessed
by
a
governmental
authority
that
are
both
imposed
on
and
concurrent
with
a
specific
revenue-producing transaction that are collected by the
Company from a customer are excluded from revenue.
Performance obligations
A
performance
obligation
is
a
promise
in
a
contract
to
transfer
a
distinct
good
or
service
to
the
customer.
A
contract’s transaction price is allocated
to each distinct performance obligation
and recognized as revenue
when,
or as, the performance obligation is satisfied.
The Company’s contracts have
multiple performance obligations as the
promise to transfer the individual
unit of
coal
is
separately
identifiable
from
other
units
of
coal
promised
in
the
contracts
and,
therefore,
distinct.
Performance obligations, as described above, primarily relate to the Company’s
promise to deliver a designated
quantity and type of coal within the quality specifications
stated in the contract.
For
contracts
with
multiple
performance
obligations,
we
allocate
the
contract’s
transaction
price
to
each
performance obligation on a relative standalone selling price basis. The
standalone selling price is determined at
each contract inception using
an adjusted market assessment
approach. This approach focuses
on the amount
that the Company believes the market is willing to pay
for a good or service, considering market conditions, such
as benchmark pricing, competitor pricing, market awareness of the product and current market trends that affect
the pricing.
Warranties provided to customers are
assurance-type of warranties on
the fitness of
purpose and merchantability
of the Company’s goods. The Company does not
provide service-type of warranties to customers.
Revenue
is
recognized
at
a
point
in
time
and
therefore
there
were
performance obligations at December 31, 2024 and 2023.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
127
Shipping and Handling
For Free
on Rail
sales, the
Company accounts
for shipping
and handling
activities as
a separate
performance
obligation after
the customer
obtains control
of the
good. In
this instance,
shipping and
handling costs
paid to
third
party
carriers
and
invoiced
to
coal
customers
are
recorded
as
freight
expense
and
other
revenues,
respectively.
(o)
Commodity Price Risk
The Company has commodity price risk arising from fluctuations
in domestic and global coal prices.
The
Company’s
principal
philosophy
is
not
to
hedge
against
movements
in
coal
prices
unless
there
are
exceptional circumstances.
Any potential hedging of coal prices would be through fixed
price contracts.
The
Company
is
also
exposed
to
commodity
price
risk
related
to
diesel
fuel
purchases.
The
Company
may
periodically enter into arrangements that protect against
the volatility in fuel prices as follows:
•
enter into fixed price contracts to purchase fuel for the U.S. Operations
.
•
enter into derivative financial instruments to hedge exposures to fuel
price fluctuations.
There were
(p)
Income Taxes
The Company uses the asset
and liability approach to account
for income taxes as required by
ASC 740, Income
Taxes,
which requires
the
recognition
of deferred
income
tax assets
and
liabilities
for the
expected
future
tax
consequences
attributable
to differences
between
the
financial
statement
carrying
amounts
of
existing
assets
and liabilities and their respective tax bases.
Valuation allowances are provided
when necessary to
reduce deferred income
tax assets to
the amount expected
to be realized, on a more likely than not basis.
The Company recognizes the
benefit of an uncertain
tax position that it has
taken or expects
to take on income
tax
returns
it
files
if
such
tax
position
is
more
likely
than
not
to
be
sustained
on
examination
by
the
taxing
authorities, based on the technical
merits of the position. These tax
benefits are measured based on the
largest
benefit that has a greater than 50% likelihood of being realized
upon ultimate resolution.
The Company’s foreign
structure consists of
Australian entities which
are treated as
corporations subject to
tax
under Australian taxing authorities.
The Australian entities are
treated as a branch for
U.S. tax purposes and
all
income flows through the ultimate parent (the Company).
(q)
Fair Value Measurements
The Company utilizes valuation
techniques that maximize
the use of observable inputs
and minimize the use of
unobservable
inputs
to
the
extent
possible.
The
Company
determines
fair
value
based
on
assumptions
that
market
participants
would
use
in
pricing
an
asset
or
liability
in
the
principal
or
most
relevant
market.
When
considering
market
participant
assumptions
in
fair
value
measurements,
the
Company
distinguishes
between
observable and unobservable inputs, which are categorized
in one of three levels of inputs.
Refer to Note 22.
“Fair Value
Measurement” for detailed information related to the
Company’s fair value policies
and disclosures.
(r)
Stock-based Compensation
The Company has
a stock-based compensation plan
which allows for
the grant of
certain equity-based incentives
including stock options,
performance stock units,
or PSU, and
restricted stock units,
or RSU, to
employees and
executive
directors,
valued
in
whole
or
in
part
with
reference
to
the
Company’s
CDIs
or
equivalent
common
shares (on a
:1 CDI to common share ratio).
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
128
The grant-date
fair value
of stock
option
award is
estimated on
the
date
of grant
using
Black-Scholes-Merton
option-pricing model. For
certain options and
PSUs, the Company includes
a relative Total
Stockholder Return,
or TSR, modifier to determine the number of shares
earned at the end of the performance period. The
fair value
of awards that include the TSR modifier is determined
using a Monte Carlo valuation model.
The expense for these equity-based incentives is based on their fair value at date of grant and is amortized over
the required service
period, generally the vesting
period. The Company accounts
for forfeitures as
and when they
occur.
Refer to
Note 20.
“Stock-Based Compensation”
for detailed
information related
to the
Company’s
stock-based
compensation plans.
(
s)
(Loss) earnings per Share
Basic earnings per share is computed by dividing net income attributable to stockholders of the Company by the
weighted-average number of shares of common stock
outstanding during the reporting period.
Diluted net income
per share is computed
using the weighted-average
number of shares
of common stock
and
dilutive
potential
shares
of
common
stock
outstanding
during
the
period.
Dilutive
potential
shares
of
common
stock primarily consist of employee stock options and
restricted stock.
(t)
Deferred Debt Issuance Costs
The Company capitalizes costs
incurred in connection with new
borrowings, the establishment or
enhancement
of credit
facilities
and the
issuance
of debt
securities.
These costs
are amortized
as an
adjustment to
interest
expense over the
life of the
borrowing or term
of the credit
facility using the
effective interest
method. Deferred
debt issuance costs related to a recognized liability
are presented in the balance sheet as a
direct reduction from
the carrying amount of that liability whereas debt issuance costs related to a credit facility are shown
as an asset
and amortized
over the
life of
the facility
on a
straight-line basis
and included
in “Interest
expense, net”
in the
Company’s Consolidated Statements of Operations
and Comprehensive Income.
For
information
on
the
unamortized
balance
of
deferred
debt
issuance
costs
related
to
outstanding
debt,
see
Note 14. “Interest Bearing Liabilities”.
3.
Segment Information
The Company has
a portfolio of operating
mines and development
projects in Queensland,
Australia and in the
states of
Pennsylvania,
Virginia
and West
Virginia
in the
U.S. The
Australian Operations
comprise the
100%-
owned
Curragh
producing
mine
complex.
The
U.S.
Operations
comprise
complexes (Buchanan and Logan) and
The
Company
operates
its
business
along
organization
of
the
Company’s
chief
operating
decision
maker,
or
CODM,
manages
and
allocates
resources
to
the
various
components of the Company’s business.
The CODM
uses Adjusted
EBITDA as
the primary
metric to
measure each
segment’s
operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP.
Investors should be
aware that
the Company’s
presentation of
Adjusted EBITDA
may not
be comparable
to similarly
titled financial
measures used by other companies.
Adjusted EBITDA is
defined as earnings
before interest, taxes,
depreciation, depletion and
amortization and other
foreign exchange losses. Adjusted EBITDA is
also adjusted for certain discrete items that
management exclude
in analyzing each
of the
Company’s segments’ operating performance.
“Other and corporate”
relates to additional
financial information for the
corporate function such as financial reporting and accounting,
treasury, legal, human
resources, compliance,
and tax.
As such, the
corporate function
is not determined
to be
a reportable segment
but is discretely disclosed for purposes of reconciliation to the
Company’s Consolidated Financial Statements.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
129
Reportable segment results for the years ended December 31,
2024, 2023 and 2022 are presented below:
(US$ thousands)
Australia
United States
Other and
Corporate
Total
Year ended December 31,
2024
Total
revenues
$
$
$
$
Less:
Mining costs
(
1,054,066
)
(
629,242
)
(
1,683,308
)
Other operating costs
(1)
(
538,365
)
(
141,239
)
(
679,604
)
Total
operating costs
(
1,592,431
)
(
770,481
)
(
2,362,912
)
Other and unallocated items
(2)
(
35,494
)
(
29,661
)
Segment adjusted EBITDA
(
35,494
)
Total
assets
Capital expenditures
Year ended December 31,
2023
Total
revenues
$
$
$
$
Less:
Mining costs
(
1,058,598
)
(
610,925
)
(
1,669,523
)
Other operating costs
(1)
(
621,356
)
(
182,866
)
(
804,222
)
Total
operating costs
(
1,679,954
)
(
793,791
)
(
2,473,745
)
Other and unallocated items
(2)
(
41,629
)
(
35,146
)
Segment adjusted EBITDA
(
41,629
)
Total
assets
Capital expenditures
Year ended December 31,
2022
Total
revenues
$
$
$
$
Less:
Mining costs
(
864,616
)
(
531,812
)
(
1,396,428
)
Other operating costs
(1)
(
711,170
)
(
208,128
)
(
919,298
)
Total
operating costs
(
1,575,786
)
(
739,940
)
(
2,315,726
)
Other and unallocated items
(2)
(
42,245
)
(
40,192
)
Segment adjusted EBITDA
(
42,245
)
Total
assets
Capital expenditures
(1)
The significant expense category and amount aligns
with the segment-level information that is regularly
provided to the CODM
.
(2)
Other and unallocated items for other and corporate includes
selling, general and administrative expenses.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
130
The
reconciliation
of
net
income
attributable
to
the
Company
to
the
Adjusted
EBITDA
for
the
years
ended
December 31, 2024, 2023 and 2022 are as follows:
Year Ended December 31,
(US$ thousands)
2024
2023
2022
Consolidated Adjusted EBITDA
$
$
$
Depreciation, depletion and amortization
(
187,400
)
(
160,711
)
(
167,046
)
Interest expense, net
(1)
(
58,856
)
(
56,751
)
(
67,632
)
Other foreign exchange gains
(2)
Loss on debt extinguishment
(
14,732
)
(
1,385
)
(
5,336
)
Uncertain stamp duty position
(3)
(
41,321
)
Impairment of non-core assets
(4)
(
10,585
)
Restructuring costs
(5)
(
729
)
Losses on idled assets
(6)
(
4,574
)
(
4,846
)
(
771
)
Decrease (increase) in provision for discounting
(
3,821
)
Net (loss) income before tax
$
(
149,190
)
$
$
Income tax benefit (expense)
(
231,574
)
Net (loss) income
$
(
108,881
)
$
$
(1)
Includes interest income of $
(2)
Refer to Note 4. “Other, net” for further discussion.
(3)
(4)
relating to a long-standing non-core idled asset within the U.S. Operations.
This impairment charge was recognized based on a conditional
purchase
offer received and
accepted by
the Company and
is included in
“Other, net” on
the Consolidated
Statement of
Operations and
Comprehensive Income.
At December 31, 2024, satisfaction
of conditions precedent and
completion of the sale remained
uncertain and as such this
idled asset was classified
as held and used. On January 14, 2025, all
substantive conditions were satisfied, and
the sale of this long-standing non-core asset
was completed.
(5)
During the year ended December 31, 2024, a restructuring and cost transformation initiative commenced at the Australian Operations to focus on
repositioning the Company’s efforts to align its cost
structures and optimize its operations.
(6)
These losses relate to care and maintenance
costs of an idled non-core asset that was
sold on January 14, 2025.
The
reconciliations
of
capital
expenditures
per
the
Company’s
segment
information
to
capital
expenditures
disclosed on
the Consolidated
Statements of
Cash Flows
for the
years ended
December
31, 2024,
2023 and
2022 are as follows:
Year ended December 31,
(US$ thousands)
2024
2023
2022
Capital expenditures per Consolidated Statement of
Cash Flows
$
$
$
Net movement in accruals for capital expenditures
(
453
)
Net movement in deposits to acquire long lead capital
(
10,768
)
(
8,994
)
(
18,127
)
Capital expenditures per segment detail
$
$
$
Disaggregation of Revenue
The Company disaggregates the revenue
from contracts with customers by
major product group for each of
the
Company’s
segments,
as the
Company
believes
it best
depicts the
nature,
amount,
timing
and
uncertainty
of
revenues and cash flows. All revenue is recognized at a point
in time.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
131
Year ended December 31, 2024
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total
coal revenue
Other
(1)(2)
Total
$
$
$
Year ended December 31, 2023
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total
coal revenue
Other
(1)(2)
Total
$
$
$
Year ended December 31, 2022
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total
coal revenue
Other
(1)
Total
$
$
$
(1)
Included
in
Other
revenue
for
Australian
Operation
is
the
amortization
of
Stanwell
non-market coal
supply
agreement
liability
recognized on
acquisition of Curragh. See further discussion
in Note 16 “Contract Obligations”.
(2)
Other revenue
for the
U.S. segment
includes $
nil
relating to termination fee revenue from
coal sales contracts cancelled at the U.S. Operations.
Further explanation to tables above:
The following is a description of the principal activities
by reportable segments.
•
The Company primarily offers two types of products to its
customers: metallurgical coal and thermal coal
of
varying
qualities.
The
Company’s
metallurgical
coal
is
classified
as
hard
coking
coal,
further
distinguished by its volatility (defined as high, mid, or low),
and pulverized coal injection.
•
The Australian Operations reportable segment
includes the Curragh mine. The
Australian Operations is
a separate
reportable segment
due to
having separate
management, location,
assets, and
operations.
Curragh
mine,
included
in
the
Australian
Operations,
is
located
in
central
Queensland,
Australia
and
produces a wide variety of metallurgical coal.
•
The United States
reportable segment
includes the Buchanan
and Logan coal
mine facilities located
in
Virginia and West Virginia
in the United States. It produces high, mid and low volatility hard
coking coal.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
132
4.
Other, net
Other, net consists of the following:
Year ended December 31,
(US$ thousands)
2024
2023
2022
Other foreign exchange gains
(1)
$
$
$
Impairment of non-core assets
(
10,585
)
Restructuring costs
(
729
)
Other income
Total
Other, net
$
$
$
(1)
entities within the Group that are denominated
in currencies other than their respective
functional currencies.
5.
Capital Structure
(a)
Authorized capital stock
The Company’s Certificate of Incorporation, as amended, authorize the Company to
issue
of $
preferred stock.
Common Stock / CDIs
The following table summarizes Common Stock activity
during the periods presented below:
Year Ended December 31,
2024
2023
2022
Shares outstanding at the beginning of the year
Shares issued during the year
Share outstanding at end of the year
A portion of the
Company’s common
stock is publicly
traded on the ASX
under the ticker
“CRN,” in the
form of
CHESS Depositary Interests,
or CDIs. CDIs are units of beneficial ownership in shares of common stock held by
CHESS Depositary Nominees Pty Limited, or CDN,
a wholly-owned subsidiary of ASX Limited,
the company that
operates the ASX.
As each CDI represents one tenth of a share,
holders of CDIs will be entitled to
hold. CDI
holders
are to
receive
entitlements
which attach
to underlying
shares
such as
participation
in rights
issues, bonus issues, capital reductions and liquidation preferences.
The CDIs entitle
holders to dividends,
if any, and other rights
economically equivalent to
shares of common
stock,
including the right
to attend stockholders’
meetings. CDN, as
the stockholder of
record, will vote
the underlying
shares in accordance with the directions of the CDI holders
.
As of December 31,
2024,
stock) were owned by investors in the form of CDIs publicly
traded on the ASX.
Coronado Group LLC
As
of
December
31,
2024,
Coronado
Group
LLC,
the
Company’s
controlling
stockholder,
beneficially
owns
%
of
the
total
outstanding.
Refer to Note 20 “Stock-Based Compensation” for
options to purchase common stock issued
and outstanding as
of December 31, 2024 and 2023.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
133
Preferred Stock
Coronado Group
LLC holds
one share
of preferred
stock
Series A.
The holder
of Series
A Preferred
Stock
is
permitted
to
nominate
and
elect
members
of
the
Company’s
Board
of
Directors
in
relation
to
the
level
of
the
holder’s
aggregate
beneficial
ownership
of
shares
of
the
Company’s
common
stock.
The
Series
A
Preferred
Share
is
not
entitled
to
dividends
and
is
non-transferable.
The
Series
A
Preferred
Share
has
a
liquidation
preference of $
.
(b)
The dividend
policy
and
the
payment
of future
cash
dividends
are subject
to
the
discretion
of the
Company’s
Board of Directors.
During the year ended December 31, 2024, the Company
declared:
•
Dividends of $
and
•
Dividends of $
For
the
year
ended
December
31,
2024,
the
Company
paid
a
total
of
$
holders on the ASX, net of
$
be paid in Australian dollars,
in relation to the above declared dividends.
During the year ended December 31, 2023, the Company
declared:
•
Dividends of $
and
•
Dividends of $
For
the
year
ended
December
31,
2023,
the
Company
paid
a
total
of
$
holders on the ASX, net of
$
be paid in Australian dollars,
in relation to the above declared dividends.
During the year ended December 31, 2022, the Company
declared:
•
Dividends of $
•
Dividends of $
•
Dividends of $
and
•
Dividends of $
For
the year
ended December
31, 2022,
the
Company
paid a
total of
$
holders on the ASX, net of
$
be paid in Australian dollars,
in relation to the above declared dividends.
For dividends declared or paid after December 31, 2024,
refer to Note 27 “Subsequent Events”.
(c)
Basic earnings per
share of common
stock is computed
by dividing net
income attributable
to the Company
for
the period,
by the
weighted-average
number of
shares
of common
stock outstanding
during the
same period.
Diluted earnings per share of common stock is computed
by dividing net income attributable to the Company
by
the weighted-average number
of shares
of common
stock outstanding adjusted
to give
effect to potentially
dilutive
securities. During periods in which the Company incurs
a net loss, diluted weighted average shares outstanding
are equal to basic weighted average shares outstanding
because the effect of all equity awards is anti-dilutive.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
134
Basic and diluted earnings per share was calculated as
follows (in thousands, except per share data):
Year ended December 31,
(US$ thousands, except per share data)
2024
2023
2022
Numerator:
Net (loss) income attributable to Company stockholders
$
(
108,881
)
$
$
Denominator (in thousands):
Weighted-average shares of common stock outstanding
Effects of dilutive shares
Weighted average diluted shares of common stock
outstanding
(Loss) Earnings Per Share (US$):
Basic
(
0.65
)
Dilutive
(
0.65
)
6. Trade Receivables, net
The Company
extends trade
credit to
its customers
in the
ordinary course
of business.
Trade
receivables are
recorded initially at fair value and subsequently at amortized
cost, less any ECL.
December 31,
(US$ thousands)
2024
2023
Trade receivables
$
$
Provision for discounting and credit losses (Note 7)
(
179
)
(
267
)
Trade receivables, net
$
$
7. Provision for Discounting and Credit Losses
The following
table provides
the reconciliation
of the
allowance for
credit losses
that is
deducted from
financial
assets to present the net amount expected to be collected:
(US$ thousands)
Trade
receivables
Other
Assets
Total
As at January 1, 2023
$
$
$
Change in estimates during the period
(
4,244
)
(
4,216
)
As of December 31, 2023
Change in estimates during the period
(
88
)
(
119
)
(
207
)
As of December 31, 2024
$
$
$
8. Inventories
December 31,
(US$ thousands)
2024
2023
Raw coal
$
$
Saleable coal
Total
coal inventories
Supplies inventory
Total
inventories
$
$
Coal inventories measured at its net realizable value were
$
and 2023, respectively,
and primarily relates to coal designated for deliveries under
the Stanwell below market
coal supply agreement, or CSA. See further discussion
in Note 16. “Contract Obligations”.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
135
9.
Other Assets
December 31,
(US$ thousands)
2024
2023
Other current assets:
$
$
Total
other current assets
$
$
Other non-current assets:
$
$
Total
other non-current assets
$
$
The Company
has other assets
which includes prepayments,
favorable mineral leases,
deferred debt issue
costs,
long service leave receivable
,
equipment deposits, short
term deposits and coalfield
employment enhancement
tax credit receivable.
Long service leave for
eligible coal mine workers
at the Company’s
Australian Operations is
paid when leave is
taken, with a subsequent
reimbursement received from
the Coal Mining Industry
(Long Service Leave Funding)
Corporation
in
Queensland,
Australia.
The
reimbursement
entitlement
is
recognized
as
a
receivable
and
is
measured as
the present
value of
expected future
reimbursements to
be received
for the
corresponding leave
liability recognized.
The Company
recognized tax
credits receivable
relating to
the Virginia
coalfield employment
enhancement tax
credit for
coal sales
from the
Company’s
mining properties
in the
State of
West
Virginia in
the U.S.
during the
2018
to
2021
income
years.
Where
the
credits
exceed
the
Company’s
state
tax
liability
for
the
tax
year,
the
excess is redeemable by the
Tax
Commissioner on behalf of
the Commonwealth of Virginia
for
% of the face
value
within
90
days
after
filing
the
return.
The
tax
credits
allowed
can
be
claimed
in
the
third
taxable
year
following the taxable year in which the credit was earned and
allowed.
Deposits to acquire mining equipment
are advance payments made for
the purchase of future mining
equipment,
some of which relate to mining equipment expected to
be delivered beyond the next twelve months.
Short-term deposits were term deposits held with financial institutions with maturity greater than ninety days and
less than twelve months and that did not meet the cash and
cash equivalents criteria.
The favorable mineral leases were recognized on acquisition of certain U.S. assets
that are amortized based on
the
coal
tonnage
removed
from
the
lease
property
relative
to
the
total
estimated
acquired
reserves
on
that
property.
The deferred debt issue costs as of December 31, 2024 and
December 31, 2023, are unamortized costs relating
to the
establishment of
the senior
secured asset-based
revolving credit facilities
(refer to
Note 14
“Interest Bearing
Liabilities” for further
description of these
facilities). The deferred
debt issue costs
are amortized over
the life of
the
facility
on
a
straight-line
basis
and
included
in
“Interest
expense,
net”
in
the
Company’s
Consolidated
Statements of Operations and Comprehensive Income
.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
136
10.
Property, Plant and
Equipment
The following
table indicates
the carrying
amount of
each of
the major
classes of
the Company’s
consolidated
depreciable assets:
December 31,
(US$ thousands)
2024
2023
Land
$
$
Buildings and improvements
Plant, machinery, mining
equipment and transportation vehicles
Mineral rights and reserves
Office and computer equipment
Mine development
Asset retirement obligation asset
Construction in progress
Total
cost of property,
plant and equipment
Less accumulated depreciation, depletion and amortization
Property, plant and
equipment, net
$
$
The amount of depreciation and amortization expense
for property, plant
and equipment for the years ended
December 31, 2024, 2023 and 2022 was $
11.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
following:
December 31,
(US$ thousands)
2024
2023
Wages and employee benefits
$
$
Taxes
other than income taxes
Accrued royalties
Accrued freight costs
Accrued mining fees
Acquisition related accruals
Other liabilities
$
$
Acquisition related accruals
of $
estimated stamp duty payable on the Curragh acquisition. On March 6, 2024, the Company paid the outstanding
assessed
stamp
duty
and
tax
interest
to
the
Queensland
Revenue
Office,
or
QRO.
Refer
to
Note
25
“Contingencies” for further details.
12. Leases
During the year ended December 31,
2024, the Company entered into a
number of agreements to lease
mining
equipment.
Based
on
the
Company’s
assessment
of
terms
within
these
agreements,
the
Company
classified
these leases as
operating leases. On
mobilization of th
ese leased mining
equipment, the Company
recognized
ROU assets and operating lease liabilities of $
On April 1,
2024, the Company
extinguished
used to provide mining
services. On extinguishment,
ROU assets of $
of $
On September 1, 2024,
the Company modified
term. Upon modification,
the Company recognized
additional ROU assets
and operating lease
liabilities of $
million.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
137
As of December
31, 2024,
there are additional
operating leases
of mining
equipment, which have
not yet been
mobilized, that
have
a present
value
of minimum
lease
payments of
$
expected to commence within the next
.
Information related to Company’s right-of use
assets and related lease liabilities are as follows:
Year ended December 31,
(US$ thousands)
2024
2023
Operating lease costs
$
$
Cash paid for operating lease liabilities
Finance lease costs:
Amortization of right of use assets
Interest on lease liabilities
Total
finance lease costs
$
$
December 31,
(US$ thousands)
2024
2023
Assets:
Operating leases
Right of use asset – operating leases, net
$
$
Finance leases
Property and equipment
Accumulated depreciation
(
309
)
Property and equipment, net
Current operating lease obligations
Non-current operating lease obligations
Total
Operating lease liabilities
Liabilities:
Current finance lease obligations
Total
Finance lease liabilities
Current lease obligations
Non-current lease obligations
Total
lease obligations
$
$
December 31,
2024
2023
Weighted Average Remaining
Lease Term (Years)
Weighted average remaining lease term – finance
leases
-
Weighted average remaining lease term – operating
leases
Weighted Average Discount
Rate
Weighted discount rate – finance lease
Weighted discount rate – operating lease
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
138
The Company’s leases
have remaining lease
terms of
, some of which
include options to
extend the terms where
the Company deems
it is reasonably certain
the options will be
exercised. Maturities of
lease liabilities as at December 31, 2024, are as follows:
(US$ thousands)
Operating
Lease
Year ending
December 31,
2025
$
2026
2027
2028
2029
Total
lease payments
Less imputed interest
(
19,173
)
Total
lease liability
$
13.
Asset Retirement Obligations
Reclamation of
areas disturbed
by mining
operations
must be
performed
by the
Company in
accordance
with
approved
reclamation
plans
and
in
compliance
with
state
and
federal
laws
in
the
states
of
West
Virginia
and
Virginia
in
the
United
States
and
Queensland
in
Australia.
For
areas
disturbed,
reclamation
is
performed
progressively,
however,
a
significant
amount
of
the
reclamation
will
take
place
in
the
future
when
operations
cease. There were
of December 31,
2024 and 2023.
In addition, state
agencies monitor
compliance with the
mine plans, including
reclamation.
The Company records the fair value
of its asset retirement obligations using the present
value of projected future
cash flows, with
an equivalent amount
recorded in the
related long lived
asset or a
change to the
Consolidated
Statements of Operations
if the related
permit is closed.
An accretion cost,
representing the
increase over time
in the present value of
the liability, is recorded each period and the capitalized cost is
depreciated over the useful
life of the related asset. As reclamation work is performed or liabilities
otherwise settled, the recorded amount of
the liability is reduced.
Changes in
the asset
retirement obligations
for the
years ended
December 31,
2024 and
December 31,
2023
were as follows:
(US$ thousands)
December 31,
2024
December 31,
2023
Total
asset retirement obligations at beginning of the year
$
$
ARO liability additions - new disturbances
Accretion
Reclamation performed in the year
(
9,724
)
(
5,334
)
Reclass of asset held for sale
Change in estimate recorded to operations
(
3,523
)
(
3,151
)
Change in estimate recorded to assets
Foreign currency translation adjustment
(
9,142
)
Total
asset retirement obligations at end of the year
Less current portion
(
15,523
)
(
15,321
)
Asset retirement obligation, excluding current portion
$
$
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
139
14. Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
at December 31, 2024:
December 31,
2024
December 31,
2023
Weighted Average
Interest Rate at
December 31, 2024
Final
Maturity
0% Senior Secured Notes
$
$
%
(2)
0% Senior Secured Notes
%
(2)
ABL Facility
Loan - Curragh Housing Transaction
%
(2)
Discount and debt issuance costs
(1)
(
12,165
)
(
6,983
)
Total
interest bearing liabilities
Less: current portion
(
1,363
)
Non-current interest-bearing liabilities
$
$
(1)
Relates to discount and
debt issuance costs in
connection with the 2029
Notes, 2026 Notes and
Curragh Housing Transaction (as defined
below). Deferred debt
issuance costs incurred
in connection with
the establishment of
the ABL Facility
have been included
within "Other non-
current assets" in the Consolidated Balance Sheets.
(2)
issuance costs and discount, where applicable.
10.750% Senior Secured Notes due in 2026
On October 2,
2024, the Company
completed a refinancing
initiative (as explained
below) and redeemed
in full
all
of
the
outstanding
%
Senior
Secured
Notes
due
2026,
or
the
2026
Notes,
of
$
redemption price of the 2026 Notes
was $
% of the aggregate principal amount
thereof,
plus
accrued
and
unpaid
interest,
to,
but
excluding
the
repurchase
date.
In
connection
with
the
extinguishment of the 2026 Notes, the Company recognized
$
9.250% Senior Secured Notes due in 2029
On
October
2,
2024,
the
Company,
entered
into
an
indenture,
among
Coronado
Finance
Pty
Ltd,
as
issuer,
Coronado
Global
Resources
Inc,
as
guarantor,
the
subsidiaries
of
Coronado
Global
Resources
Inc,
named
therein, as
additional
guarantors,
Wilmington
Trust,
National Association,
as trustee
and priority
lien collateral
trustee, or
the Indenture,
relating to
the issuance
by the
Issuer of
$
% Senior Secured Notes due 2029, or the 2029 Notes.
The 2029 Notes were issued at par and bear interest at a rate of
% per annum. Interest on the 2029 Notes
is payable semi-annually in arrears on
April 1 and October 1 of each year,
commencing April 1, 2025. The 2029
Notes mature on October 1, 2029 and are senior secured
obligations of the Issuer.
The
2029
Notes
are
guaranteed
on
a
senior
secured
basis
by
the
Company
and
certain
of
the
Company’s
subsidiaries that guarantee or
is a borrower
under the Company’s ABL
Facility (as defined below)
or certain other
debt and secured by (i) a
first-priority lien on substantially
all of the assets of
the Company and each
Guarantor
(other
than
accounts
receivable
and
certain
other
rights
to
payment,
inventory,
certain
investment
property,
certain general
intangibles and
commercial tort
claims, deposit
accounts, securities
accounts and other
related
assets, chattel paper,
letter of credit rights, certain
insurance proceeds, intercompany
indebtedness and certain
other assets related to the
foregoing and proceeds and
products of each of the
foregoing (collectively,
the “ABL
Priority Collateral”))
and (ii) a
second-priority lien
on the
ABL Priority
Collateral, which
is junior
to a
first-priority
lien for the
benefit of the
lenders and other
creditors under
the Company’s
asset-based revolving
credit facility,
dated as of May 8, 2023, in each case, subject to certain
exceptions and permitted liens.
The Company
used the
net proceeds
from the
2029 Notes
to redeem
all of
the Company’s
2026 Notes
and to
pay related fees and expenses in connection with the offering of the 2029 Notes and the redemption of the 2026
Notes, and the Company intends to use the remaining
net proceeds for general corporate purposes.
The terms
of the
2029 Notes
are governed
by the
Indenture. The
Indenture contains
customary covenants
for
high
yield
bonds,
including,
but
not
limited
to,
limitations
on
investments,
liens,
indebtedness,
asset
sales,
transactions with affiliates and restricted payments,
including payment of dividends on capital stock.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
140
Upon the occurrence of a “Change of Control Triggering Event”, as defined in the Indenture as the occurrence of
Change of Control or Rating Decline, the Issuer is required to offer to repurchase the 2029 Notes at
% of the
aggregate principal
amount thereof,
plus accrued
and unpaid
interest, if
any,
to, but
excluding, the
repurchase
date. The Issuer also has the right
to redeem the 2029 Notes at
% of the aggregate principal amount thereof,
plus accrued
and unpaid
interest,
if any,
to, but
excluding,
the repurchase
date,
following the
occurrence
of a
Change of
Control Triggering Event, provided
that the Issuer
redeems at least
% of
the 2029 Notes
outstanding
prior to
such Change of
Control Triggering Event.
Upon the
occurrence of
certain changes in
tax law
(as described
in the
Indenture), the
Issuer may redeem
all of
the 2029 Notes
at a
redemption price equal
to
% of
the principal
amount
of
the
2029
Notes
to
be
redeemed
plus
accrued
and
unpaid
interest,
if
any,
to,
but
excluding,
the
redemption date.
The Issuer may redeem any of the 2029 Notes beginning on October 1, 2026. The initial redemption price
of the
2029 Notes is
% of their principal amount, plus accrued and unpaid
interest, if any,
to, but excluding the
redemption
date.
The
redemption
price
will
decline
each
year
after October
1,
2026, and
will
be
% of
the
principal amount of the 2029 Notes, plus accrued and unpaid interest, beginning on October 1, 2028. The Issuer
may also redeem
up to
% of the
aggregate principal amount
the 2029 Notes
on one or more
occasions prior
to October 1, 2026
at a price
equal to
% of the
principal amount thereof
plus a “make-whole”
premium,
plus accrued and unpaid interest, if any,
to, but excluding, the redemption date.
At any time and from
time to time on
or prior to October
1, 2026, the Issuer
may redeem in the
aggregate up to
% of the original aggregate
principal amount of the
2029 Notes (calculated after
giving effect to any
issuance
of
additional
2029
Notes)
with
the
net
cash
proceeds
of
certain
equity
offerings,
at
a
redemption
price
of
%, plus
accrued and
unpaid interest,
if any,
to, but
excluding, the
redemption date,
so long
as at
least
%
of
the
aggregate
principal
amount
of
the
2029
Notes
(calculated
after
giving
effect
to
any
issuance
of
additional 2029
Notes)
issued under
the Indenture
remains outstanding
after each
such redemption
and each
such redemption occurs within
The
Indenture
contains
customary
events
of
default,
including
failure
to
make
required
payments,
failure
to
comply with certain agreements
or covenants, failure to
pay or acceleration of
certain other indebtedness, certain
events of
bankruptcy and
insolvency, and failure to
pay certain
judgments. An
event of
default under
the Indenture
will allow either the Trustee or the holders
of at least
% in aggregate principal amount of the then-outstanding
2029 Notes to
accelerate, or in
certain cases, will automatically
cause the acceleration
of, the amounts due
under
the 2029 Notes.
As of December 31, 2024, the
Company was in compliance with
all applicable covenants under the
2029 Notes
Indenture.
The
carrying
value
of
debt
issuance
costs,
recorded
as
a
direct
deduction
from
the
face
amount
of
the
2029
Notes, were $
Asset Based Revolving Credit Facility
On May
8, 2023,
the Company,
Coronado Coal
Corporation, a Delaware
corporation and wholly
owned subsidiary
of the Company,
Coronado Finance Pty
Ltd, an Australian
proprietary company
and a wholly
owned subsidiary
of the Company,
or an Australian
Borrower, Coronado
Curragh Pty Ltd,
an Australian proprietary
company and
wholly
owned
subsidiary
of
the
Company,
or
an
Australian
Borrower
and,
together
with
the
other
Australian
Borrower, the Borrowers,
and the other guarantors party
thereto, collectively with the Company,
the Guarantors
and, together
with the
Borrowers, the
Loan Parties,
entered into
a senior
secured asset-based
revolving credit
agreement in an
initial aggregate amount
of $
Australia Pty Ltd, as the Administrative Agent, Global
Loan Agency Services Australia Nominees Pty Ltd,
as the
Collateral Agent, the Hongkong and Shanghai Banking Corporation Limited, Sydney Branch, as the Lender, and
DBS Bank Limited,
Australia Branch, as
the Lender and,
together with the
other Lender,
the Lenders. The
ABL
Facility became effective on August 3, 2024, when
conditions precedent were satisfied.
The ABL Facility matures in August 2026 and provides for up to $
million
sublimit
for
the
issuance
of
letters
of
credit
and
$
Availability
under
the
ABL
Facility
is
limited
to
an
eligible
borrowing
base,
determined
by
applying
customary
advance rates to eligible accounts receivable and inventory.
Borrowings under
the ABL
Facility bear
interest at
a rate
per annum
equal to
an applicable
rate of
% plus
Bank Bill
Swap Bid
Rate
for
loans denominated
in A$,
or
the Secured
Overnight
Finance
Rate,
or
SOFR,
for
loans denominated in US$, at the Borrower’s election.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
141
The
ABL
Facility
contains
customary
representations
and
warranties
and
affirmative
and
negative
covenants
including, among
others, a
covenant regarding
the maintenance
of leverage
ratio to
be less
than
covenant regarding maintenance of interest coverage ratio to be more than
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or
any of its
Subsidiaries,
covenants
relating
to
financial
reporting,
covenants
relating
to
the
incurrence
of
liens
or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and
sales of all
or substantially all
of the Borrowers
and Guarantors’, collectively
the Loan Parties,
assets
and limitations on changes in the nature of the Loan Parties’
business.
As
of
December
31,
2024,
the
letter
of
credit
sublimit
had
been
partially
used
to
issue
$
guarantees on
behalf of
the Company
and
Facility.
On
December
30,
2024,
the
Company
completed
an
agreement,
or
the
Waiver
Agreement,
with
the
Administrative
Agent
under
the
ABL
Facility
to
temporarily
waive
compliance
with
the
ABL
Facility’s
interest
coverage
ratio
covenant
between
December
31,
2024
to
March
30,
2025,
or
the
waiver
period.
Pursuant
the
Waiver Agreement, the
Company will be
required to maintain
an aggregate cash
balance of at
least $
in one
or more
accounts
with the
Lenders,
or the
Cash
Balance
Covenant,
until
such
time that
the
Company
submit a
covenant compliance
certificate
to the
Lenders
pursuant to
the ABL
Facility
which
demonstrates
the
Company is
in compliance
with the
interest coverage
ratio covenant.
The Cash
Balane Covenant
applies from
the time the Company submits
the covenant compliance certificate
for December 31, 2024,
which is anticipated
to be on or after February 19, 2025.
At the end
of the waiver
period, unless
further waivers
are obtained,
any breach
of covenants
would constitute
an event
of default
under the
terms of
the ABL
Facility and
the Lenders
shall declare
all amounts
owing under
the ABL
Facility
immediately
due and
payable,
terminate
such
Lenders’
commitments
under
the
ABL Facility,
require the
Borrowers to
cash collateralize
any letter
of credit
obligations and/or
exercise any
and all
remedies
and other rights under the ABL Facility.
As of December 31, 2024, except for the interest coverage ratio covenant, the Company was in compliance with
all other applicable covenants.
Under the terms of the
ABL Facility,
a Review Event (as defined
in the ABL Facility)
is triggered if, among other
matters, a “change of control” (as defined in the ABL Facility)
occurs.
Following the
occurrence of
a Review
Event, the
Borrowers must
promptly meet
and consult
in good
faith with
the Administrative Agent and the Lenders to agree a
strategy to address the relevant Review Event including but
not limited
to a
restructure of
the terms
of the
ABL Facility
to the
satisfaction of
the Lenders.
If at
the end
of a
period of
of their
discussion or
meeting with
the Borrowers
or do
not wish
to continue
to provide
their commitments,
the
Lenders may
declare all
amounts
owing under
the ABL
Facility
immediately due
and payable,
terminate such
Lenders’
commitments
under
the
ABL
Facility,
require
the
Borrowers
to
cash
collateralize
any
letter
of
credit
obligations and/or exercise any and all remedies and
other rights under the ABL Facility.
The carrying value of
debt issuance costs,
recorded as “Other
non-current assets” in
the Consolidated Balance
Sheet was $
Loan – Curragh Housing Transaction
On
May
16,
2024,
the
Company
completed
an
agreement
for
accommodation
services
and
the
sale
and
leaseback
of
housing
and
accommodation
assets
with
a
regional
infrastructure
and
accommodation
service
provider, or collectively, the Curragh Housing
Transaction. Refer to Note
15 “Other Financial
Liabilities” for further
information.
In connection with the Curragh Housing Transaction, the
Company borrowed $
the same
regional
infrastructure
and accommodation
service provider.
This amount
was recorded
as “Interest
Bearing
Liabilities”
in
the
Consolidated
Balance
Sheet.
The
amount
borrowed
is
payable
in
equal
monthly
installments
over
a
period
of
,
with
an
effective
interest
rate
of
%.
The
Curragh
Housing
Transaction loan is not subject to any
financial covenants.
The carrying value of the loan, net of issuance costs of $
$
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
142
15.
Other Financial Liabilities
The following is a summary of other financial liabilities:
(US$ thousands)
December 31,
2024
December 31,
2023
Collateralized financial liabilities payable to third-party financing
companies
$
$
Collateralized financial liabilities - Curragh Housing Transaction
Debt issuance costs
(
988
)
(
170
)
Total
Other financial liabilities
Less: current portion
Other non-current financial liabilities
$
$
Collateralized financial liabilities – Curragh Housing Transaction
The Curragh
Housing Transaction
did not
satisfy the
sale criteria
under Accounting
Standards Codification,
or
ASC, 606
–
Revenues from
Contracts with
Customers
proceeds of $
owned by the
Company in connection
with the Curragh
Housing Transaction were recognized
as “Other Financial
Liabilities” on
the Company’s
Consolidated Balance
Sheet. The
term of
the financing
arrangement is
with an
effective
interest rate
of
%. This
liability will
be settled
in equal
monthly payments
as part
of the
accommodation services arrangement.
In line
with the
Company’s capital
management strategy,
the Curragh
Housing Transaction
provides additional
liquidity. In
addition, the accommodation services component
of the Curragh Housing Transaction
is anticipated
to enhance the level of accommodation services
for our employees at our Curragh Mine.
In
connection
with
the
Curragh
Housing
Transaction,
the
Company
granted
the
counterparty
mortgages
over
certain
leasehold
and
freehold
land.
The
counterparty’s
rights
are
subject
to
a
priority
deed
in
favor
of
the
Company’s
senior
secured
parties
including,
but
not
limited
to,
holders
of
the
Notes,
lenders
under
the
ABL
Facility and Stanwell.
The carrying value
of this financial
liability, net of issuance costs
of $
31, 2024, $
Collateralized financial liabilities payable to third-party financing
companies
On January 6,
2021, the Company
entered into
an agreement
with a third-party
financier to sell
and leaseback
items of
property,
plant and
equipment owned
by Coronado
Curragh Pty
Ltd, a
wholly-owned subsidiary
of the
Company.
The
transaction
did
not
satisfy
the
sale
criteria
under
ASC
606
–
Revenues
from
Contracts
with
Customers. As a
result, the transaction
was deemed a
financing arrangement and
the Company has
continued
to recognize
the underlying
property,
plant and
equipment
on the
Consolidated
Balance Sheet.
The proceeds
received from the
transaction of $
the Consolidated
Balance Sheet.
The remaining
term of
the financing
arrangement is
interest rate of
% per annum.
16. Contract Obligations
In
connection
with
the
acquisition
of
the
Logan
assets,
the
Company
assumed
certain
non-market
contracts
related to various
coal leases.
The non-market
coal leases
require royalty
payments based on
a percentage
of
the
realization
from
the
sale
of
the
respective
coal
under
lease.
On
acquisition,
the
Company
recorded
$
estimated coal reserves as they are mined and sold.
In connection with
the acquisition of Curragh,
the Company assumed the
Stanwell below market CSA
with a fixed
pricing
component
that
was
below the
market
price
at
the
date
of
acquisition.
As
a result,
on
acquisition,
the
Company recorded a liability of $
below market CSA
and is amortizing
it ratably based
on the tons sold
through the contract.
The amortization of
this liability for the years ended December
31, 2024, 2023 and 2022 were $
million,
respectively,
and
recorded
as
“Other
revenues”
in
the
Consolidated
Statements
of
Operations
and
Comprehensive Income.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
143
The following is a summary of the contract obligations
as of December 31, 2024:
(US$ thousands)
Short-term
Long-term
Total
Coal leases contract liability
$
$
$
Stanwell below market coal supply agreement
$
$
$
The following is a summary of the contract obligations
as of December 31, 2023:
(US$ thousands)
Short-term
Long-term
Total
Coal leases contract liability
$
$
$
Stanwell below market coal supply agreement
$
$
$
17.
Deferred Consideration Liability
On August 14, 2018, the
Company completed the purchase of
the Stanwell Reserved Area,
or the SRA, adjacent
to
the
current
Curragh
mining
tenements.
This
area
was
acquired
on
a
deferred
consideration
basis
and
on
acquisition
the
Company
recognized
a
“Mineral
rights
and
reserves”
asset
and
a
corresponding
deferred
consideration liability of $
% representing
fair
value
of
the
arrangement
at
the
date
of
acquisition.
The
deferred
consideration
liability
reflects passage of
time changes by
way of an annual
accretion at the
contractual pre-tax discount
rate of
%
and will
be settled
as a
discount to
the price
of thermal
coal supplied
to Stanwell
over the
term of
a New
Coal
Supply Agreement
which is
expected to
commence in
2027. The
accretion of
deferred consideration
liability is
recognized
within
“Interest
expense,
net”
in
the
Consolidated
Statements
of
Operations
and
Comprehensive
Income. The Right-to-mine-asset are amortized over the
coal reserves mined from the SRA.
December 31,
(US$ thousands)
2024
2023
Stanwell Reserved Area deferred consideration
$
$
$
$
18.
Workers’ Compensation and Pneumoconiosis (“Black
Lung”) Obligations
In
the
United
States,
coal
mine
operations
may
lead
to
traumatic
workers
compensation
claims,
as
well
as
workers’ compensation occupational disease claims
for black lung disease. Injured workers generally
file claims
for traumatic injury under
the governing state workers
compensation legislation. Workers
may file claims due
to
black
lung
under
the
governing
state
workers
compensation
legislation
or
under
a
series
of
federal
laws
that
include the Federal Coal Mine Health and Safety Act of 1969, as amended, the Black Lung Benefits Act of 1973,
and
the
Black
Lung
Benefits
Reform
Act
of
1977.
The
Company
provides
for
both
traumatic
workers
compensation claims and occupational disease claims
through an insurance policy.
The Company obtained workers
compensation insurance for work
related injuries, including black
lung, through
a third-party
commercial
insurance company.
The insurance
policy covers
claims
that exceed
$
occurrence for all years, or aggregate claims in excess
of $
May 2024 and May 2023, respectively.
Per the contractual agreements, the Company was required to provide
a
collateral
security
of
$
accomplished through providing a combination of letters of credit and
cash collateral in an escrow account. As of
December 31, 2024, the Company
has provided $
and surety bonds of $
For the
years ended
December 31, 2024,
2023 and
2022, the
audited Consolidated
Statements of
Operations
and
Comprehensive
Income
included
Company
incurred
claims,
premium
expenses
and
administrative
fees
related
to
worker’s
compensation
benefits
of
$
December 31, 2024 and 2023, the estimated workers’ compensation liability
was $
respectively, representing claims incurred but not paid based on
the estimate of the
outstanding claims under the
coverage
limits
and
the
actuarially
determined
retained
liability
under
the
aggregate
claim
amount.
As
of
December
31,
2024
and
2023,
$
current liabilities” in the Consolidated Balance Sheets.
The current portion of the Company’s estimated
workers’
compensation liabilities are
recorded within “Accrued
expenses and other
current liabilities” in the
Consolidated
Balance Sheets.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
144
19.
Employee Benefit Plans
The
Company
has
a
401(k)-defined
contribution
plan
in
which
all
U.S.
full
time
employees
are
eligible
to
participate
upon
their
date
of
hire.
Employees
generally
may
contribute
up
to
%
of
their
qualifying
compensation
subject
to
statutory
limitations.
The
Company
matches
up
to
%
up
to
the
first
%
of
the
participant’s annual compensation
for all employees except
for those employed at Buchanan.
For employees at
Buchanan,
the
Company
matches
up
to
%
of
the
first
%
of
the
participant’s
annual
compensation.
The
Company’s contributions immediately
vest. Total Company contributions for
the years
ended December
31, 2024,
2023 and 2022 amounted to $
In the United States, the Company is self-insured for
employee health care claims up to the lesser of $
per
covered
person
or
an
aggregate
amount
depending
on
the
various
coverages
provided
to
employees
throughout the plan year
for all employees. The
Company has purchased coverage from
a commercial insurance
carrier to provide for any claims
in excess of these amounts. At
December 31, 2024 and 2023, the Company had
provided
accruals
of
$
management’s estimate
of the Company’s
self-insured liability.
For the years
ended December
31, 2024, 2023
and 2022, the Company incurred claims,
premium expenses and administrative fees
related to this plan totaling
$
20.
Stock-Based Compensation
Total
stock-based
compensation
expense
was
$
December 31,
2024,
2023
and
2022,
respectively,
and
was
included
as a
component
of
selling,
general,
and
administrative expenses in the Company’s Consolidated Statements of Operations and Comprehensive Income.
The stock-based compensation expense includes
compensation expense recognized in full
at the grant date for
employees that meet certain retirement eligibility criteria
per the 2018 Plan (as defined below).
As
of
December 31,
2024,
the
Company
had
$
nonvested stock-based
compensation awards
granted under
the plans.
This cost
is expected to
be recognized
over
expected cost does not include the impact of any future stock-based
compensation awards.
a) 2018 Equity Incentive Plan
In
connection
with
the
completion
of
the
Company’s
initial
public
offering
of
common
stock,
the
Company
implemented
the
Coronado
Global
Resources Inc.
2018
Equity
Incentive
Plan,
or
the
2018
Plan,
which
is
designed
to
align
compensation
for
certain
key
executives
with
the
performance
of
the
Company.
Since
its
approval, there have been no updates to the 2018 Plan
or issuance of a new plan.
The 2018
Plan provides
for the
grant of
awards
including stock
options, or
Options;
stock appreciation
rights;
restricted stock
units, or
RSUs; and
restricted stock,
valued in
whole or
in part
with reference
to shares
of the
Company’s CDIs or common stock, as well as performance-based awards, including performance stock
units, or
PSUs, denominated in CDIs or shares of
common stock. Each award is
entitled to receive one CDI with
representing one share of common stock.
The Company
measures the cost
of all stock-based
compensation, including
stock options,
at fair value
on the
grant date
and recognizes
such costs
within “Selling,
general and
administrative expense”
in the
Consolidated
Statements of
Operations and Comprehensive
Income. The
Company recognizes compensation
expense related
to Options, PSUs and RSUs
that cliff vest using
the straight-line method during
the requisite service period.
For
stock-based
awards
where
vesting
is
dependent
upon
achieving
certain
operating
performance
goals,
the
Company
estimates
the
likelihood
of
achieving
the
performance
goals
during
the
performance
period.
The
Company accounts
for forfeitures as and when they occur.
All awards require the grantee
to be employed by the
Company at the vesting date except
for grantees who meet
certain retirement criteria under the 2018 Plan.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
145
The following awards were outstanding under the 2018
as of December 31, 2024:
Grant year
Vesting date
Performance period
PSUs
RSUs
2024
31/03/2027
01/01/2024 - 31/12/2026
2024
01/08/2025
not applicable
2023
31/03/2026
01/01/2023 - 31/12/2025
2022
31/03/2026
01/01/2022 - 31/12/2024
2021
31/03/2025
01/01/2021 - 31/12/2023
The Options
and PSUs granted
that will
vest are
subject to the
achievement of goals
over the
performance period.
These goals are relative total shareholder return, or TSR, and scorecard performance metrics, or the Scorecard.
TSR is determined based on the Company’s percentile ranking of TSR over the performance period relative to a
predefined peer group of similar companies.
Performance metrics applicable to the Options and
PSUs granted as summarized below:
Grant year
Relative TSR
Scorecard
TSR
Safety
TSR
Cashflow
2024 and 2023
2022 and 2021
Awards subject to
TSR vest based
on service
and market conditions.
The fair
value of
relative TSR was
estimated
on the grant date using a Monte Carlo simulation model.
Awards subject to Scorecard vest based on service and performance conditions. The fair value of the Scorecard
was
estimated
on
the
grant
date
fair
value
of
the
Company’s
common
stock
adjusted
for
dividends
foregone
during the performance period.
Stock Option Awards
The Company’s
2018 stock
option awards were
granted on the
date of the
IPO with an
exercise price
of $
per CDI (A$
The Company’s Stock Option activity is summarized
below:
Stock Option Plan Activity
2024
2023
2022
Opening at the beginning of the year
Forfeited
(
833,319
)
Vested
(
181,687
)
Outstanding at the end of the year
Exercisable at the end of the year
2024
2023
2022
Weighted-average remaining contractual term (in
years)
—
—
The weighted
average grant
date fair
value of
all Option
Awards granted
was $
. The
exercise price
of the
option awards granted under 2018
plan is $
).
they expire on October 23, 2028.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
146
Performance Stock Unit Awards
Activity of the Company’s
PSUs that are ultimately
payable in the Company’s
CDIs or the equivalent
number of
shares of common stock granted under the 2018 Plan
is summarized below:
Performance Stock Units Plan Activity
2024
2023
2022
Nonvested at the beginning of the year
Granted
Forfeited
(
4,314,219
)
(
1,451,677
)
(
1,114,048
)
Vested and settled
(
1,389,391
)
(
286,913
)
Nonvested and outstanding at the end of the year
2024
2023
2022
Weighted-average grant date fair value (per CDI)
$
$
$
Weighted-average remaining term (in years)
The weighted average grant date fair value of all PSU
Awards granted in 2024 was $
).
The assumptions used to determine the PSUs fair value
on each grant date were as follow:
2024 Grant
2023 Grant
2022 Grant
2021 Grant
Time to maturity (in years) (i)
Dividend yield (ii)
Expected volatility (iii)
Risk-free interest rate (iv)
___________________
(i)
Time to maturity represents the period
that the Company’s stock-based
awards will vest. All awards cliff
vest at the end of the requisite service period.
(ii)
Dividend yield is the expected average yield of dividends
expected over the vesting period.
(iii)
The
volatility
was
estimated
using
comparable
public
company’s
volatility
and
the
Company’s
own
volatility for similar terms.
(iv)
Risk-free interest
rate is based
on an interpolated
Australian Government
Bond Rate
at the time
of the
grant for periods corresponding with the expected term
of the PSUs.
The above
inputs were
consistent to
determine the
fair value
of the
market and
performance conditions
of the
PSUs awards.
Restricted Stock Units
RSUs issued to certain employees are only subject
to service conditions and vest at various intervals
during the
service period.
The fair
value of
the award
was determined
using the
market price
of the
Company’s Common
Stock at the date of grant and compensation expense
is recorded over the requisite service period.
Activity of the Company’s
RSUs that are ultimately
payable in the Company’s
CDIs or the equivalent
number of
shares of common stock granted under the 2018 Plan
is summarized below:
Restricted Stock Units Plan Activity
2024
2023
2022
Nonvested at the beginning of the year
Granted
Forfeited
(
18,525
)
(
46,593
)
Vested and settled
(
716,368
)
(
507,054
)
Nonvested and outstanding at end of the year
2024
2023
2022
Weighted-average grant date fair value (per CDI)
$
$
$
Weighted-average remaining term (in years)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
147
21.
Income Taxes
(Loss) income
from continuing
operations before
income taxes
for the
years presented
below consisted
of the
following:
December 31,
(US$ thousands)
2024
2023
2022
U.S.
$
$
$
Non-U.S.
(
157,033
)
(
210,559
)
Total
$
(
149,190
)
$
$
Total
income tax (benefit) expense for the periods presented
below consisted of the following:
December 31,
(US$ thousands)
2024
2023
2022
Current:
U.S. federal
$
(
867
)
$
(
6,303
)
$
Non-U.S.
(
2,715
)
State
(
636
)
(
1,895
)
Total
current
(
783
)
(
10,913
)
Deferred:
U.S. federal
(
61,977
)
Non-U.S.
(
45,976
)
State
(
1,255
)
(
4,305
)
Total
deferred
(
39,526
)
(
21,338
)
Total
income tax (benefit) expense
$
(
40,309
)
$
(
32,251
)
$
The following is a reconciliation of the expected statutory federal income tax (benefit) expense to the Company’s
income tax (benefit) expense for the periods presented below:
December 31,
(US$ thousands)
2024
2023
2022
Current:
Expected income tax expense at U.S. federal statutory rate
$
(
31,330
)
$
$
Percentage depletion
(
3,407
)
(
17,871
)
(
41,047
)
FDII deduction
(
7,796
)
Permanent differences
(
1,130
)
(
2,262
)
Prior period tax return adjustments and amendments
(
1,347
)
(
46,060
)
Uncertain tax positions
(
1,007
)
U.S. and residual tax on foreign earnings
(
32,007
)
(
11,146
)
Australian branch impact on US taxes
(
3,406
)
State income taxes, net of federal benefit
(
5
)
Total
income tax (benefit) expense
$
(
40,309
)
$
(
32,251
)
$
Effective tax rate
(
%)
The
2023
prior
period
tax
return
adjustment
and
amendments
relates
predominantly
to
a
Foreign
Derived
Intangible Income
(“FDII”) deduction
in the
U.S. which
the Company
has chosen
to deduct
after undertaking
a
study to confirm the Company’s eligibility.
Deferred income taxes
reflect the net
tax effects of
temporary differences between the
carrying amounts of
assets
and liabilities
for financial
reporting purposes
and the
amount used
for income
tax purposes
using the
enacted
tax rates and laws currently
in effect. Significant components
of the Company’s deferred
income tax assets and
liabilities as of December 31, 2024 and 2023 were as follows:
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
148
December 31,
(US$ thousands)
2024
2023
Deferred income tax assets:
Accruals and provisions
$
$
Contract obligations
Lease obligations
Asset retirement obligation
Goodwill
Tax
losses
Interest limitation carried forward
Other
Gross deferred income tax assets
Valuation allowance
(1)
(
114,088
)
(
33,894
)
Total
deferred income tax assets, net of valuation allowance
Deferred income tax liabilities:
Property, plant, equipment
and mine development, principally due to
differences in depreciation, depletion and asset
impairments
(
277,424
)
(
297,915
)
Warehouse stock
(
12,209
)
(
12,824
)
Right of use asset
(
41,947
)
(
34,021
)
U.S. liability on foreign deferred taxes
(
19,075
)
Other
(
6,039
)
(
6,822
)
Total
deferred income tax liabilities
(
337,619
)
(
370,657
)
Net deferred income tax liability
$
(
36,737
)
$
(
72,915
)
(1)
against deferred tax
assets consisting predominantly of
tax losses, land
and goodwill. A
valuation allowance must
be established for deferred
tax assets if it is “more
-likely-than-not” that they will
not be realized. The increase
in
the valuation allowance of $
million recognized during the
year against tax losses
of the Australian tax
consolidated group. Under
Australian
tax law,
tax losses
may be
carried forward
indefinitely and
utilized subject
to meeting
the tax
loss recoupment
rules, which broadly look at whether the Company has maintained the same
majority ownership and control, and
failing that, whether the Company has maintained a similar business.
At
December
31,
2024,
the
Australian
tax
consolidated
group
has
tax
losses
of
$
(2023: $
tax losses carried forward of $
equal valuation has been recognized.
In August 2022,
the U.S. House
of Representatives
approved a $740
billion budget reconciliation
package that
includes a
new minimum tax
on certain large
corporations, an excise
tax on stock
buybacks, a significant
increase
in funding for
the Internal Revenue
Service, incentives
to promote climate
change mitigation
and clean energy,
and
provisions
to
promote
health
care
affordability.
The
Inflation
Reduction
Act
includes
a
book-minimum
tax
(AMT) similar to that originally
proposed in the House-approved
Build Back Better legislation
that would impose
a 15% minimum tax on
“adjusted financial statement income” of applicable corporations
over the “corporate AMT
foreign tax credit
for the taxable
year.”
Under the bill,
an applicable corporation’s
minimum tax would
be equal
to the amount by
which the tentative
minimum tax exceeds
the sum of the
corporation’s regular
tax for the year
and the corporation’s base erosion and anti-abuse tax liability under section 59A.
This provision was effective for
taxable years beginning after December 31, 2022 and
did not have any impact to the Company.
BEPS Pillar Two:
Australian legislation enacted for global and minimum
domestic taxes
In December 2024, the Australian Government enacted legislation that implemented key aspects of Pillar Two of
the OECD/G20 Two-Pillar Solution which includes a 15% global minimum tax for large multinational
enterprises.
This legislation did not have any impact on
the Company in the current year and will
be monitored going forward.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
149
Unrecognized Tax
Benefits
The
Company
provides
for
uncertain
tax
positions,
and
the
related
interest
and
penalties,
based
upon
management’s assessment of whether a tax benefit is
more likely than not to be sustained upon examination by
tax authorities.
To the extent that the
anticipated tax outcome
of these uncertain
tax positions changes,
such changes in
estimate
will impact the income tax
provision in the period in which
such determination is made. The Company
recognizes
accrued interest and penalties related to uncertain tax
positions as a component of income tax expense.
The effect
of the total
amount of unrecognized
tax benefits,
if recognized, would
reduce our future
effective tax
rate.
December 31,
(US$ Thousands)
2024
2023
At beginning of the year
$
$
Additions based on tax positions related to current year
Additions for tax positions of prior years
Reductions for tax positions of prior year (including impacts
due to lapse
in statute)
(
4,351
)
At end of the year
The
return
to
provision
adjustments
for
2023
reflect
a
reduction
due
to
results
from
the
study
conducted
by
specialists and
the fact
that the
benefit was
limited to
taxable income.
The Company
recorded interest
of $
million on uncertain tax positions for 2024. There were
tax positions for 2023.
The Company is subject to taxation in
the United States and Australia. As of December 31, 2024,
tax years 2018
to 2023 are open to review
from taxation authorities in the United States. In
Australia, tax years 2020 to 2023 are
open to review and the Australian Taxation
Office is presently conducting a review
of these years.
22.
Fair Value Measurement
Fair Value of Financial Instruments
The fair
value of
a financial
instrument is
the amount
that will
be received
to sell
an asset
or paid
to transfer
a
liability in
an orderly transaction
between market participants
at the
measurement date. The
fair values
of financial
instruments involve uncertainty and cannot be determined with
precision.
The Company utilizes valuation
techniques that maximize
the use of observable inputs
and minimize the use of
unobservable
inputs
to
the
extent
possible.
The
Company
determines
fair
value
based
on
assumptions
that
market participants would
use in pricing
an asset or
liability in the
market. When considering
market participant
assumptions in fair
value measurements, the
following fair value
hierarchy distinguishes between observable
and
unobservable inputs, which are categorized in one of the following
levels:
Level
1
Inputs:
Unadjusted
quoted
prices
in
active
markets
for
identical
assets
or
liabilities
accessible
to
the
reporting entity at the measurement date.
Level 2 Inputs: Other than
quoted prices that are observable
for the asset or
liability, either
directly or indirectly,
for substantially the full term of the asset or liability.
Level
3
Inputs:
Unobservable
inputs
for
the
asset
or
liability
used
to
measure
fair
value
to
the
extent
that
observable inputs
are not
available, thereby
allowing for
situations in
which there
is little, if
any,
market activity
for the asset or liability at measurement date.
Financial Instruments Measured on a Recurring Basis
As of December
31, 2024
and 2023,
there were
no financial
instruments required
to be
measured at
fair value
on a recurring basis.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
150
Other Financial Instruments
The following methods
and assumptions
are used to
estimate the fair
value of other
financial instruments
as of
December 31, 2024 and 2023:
•
Cash
and
cash
equivalents,
accounts
receivable,
short-term
deposits,
accounts
payable,
accrued
expenses,
lease
liabilities
and
other
current
financial
liabilities:
The
carrying
amounts
reported
in
the
Consolidated Balance Sheets approximate fair value due to the
short maturity of these instruments.
•
Restricted deposits,
lease liabilities,
interest bearing
liabilities and
other financial
liabilities: The
fair values
approximate the carrying amounts
reported in the Consolidated Balance Sheets.
•
Interest bearing liabilities: The
Company’s outstanding interest-bearing liabilities are carried at
amortized
cost. As of December 31,
2024, there were
ABL Facility.
The
estimated
fair value
of the
Notes
as
of December
31,
2024
is
$
upon quoted market
prices in a
market that is
not considered
active (Level 2).
of the Curragh Housing loan is $
23.
Accumulated Other Comprehensive Losses
The Company’s Accumulated
Other Comprehensive Losses
consists of foreign currency
translation adjustment
from subsidiaries not using the U.S. dollar as their functional currency.
(US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2022
$
(
91,423
)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income before reclassifications
(
2,367
)
Gain on long-term intra-entity foreign currency transactions
Total
net current-period other comprehensive loss
Balance at December 31, 2023
(
89,927
)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income before reclassifications
(
10,524
)
Loss on long-term intra-entity foreign currency transactions
(
37,109
)
Total
net current-period other comprehensive losses
(
47,633
)
Balance at December 31, 2024
$
(
137,560
)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
151
24. Commitments
(a)
Mineral Leases
The
Company
leases
mineral
interests
and
surface
rights
from
land
owners
under
various
terms
and
royalty
rates. The future minimum royalties under these leases
are as follows:
(US$ thousands)
Amount
Year ending
December 31,
2025
$
2026
2027
2028
2029
Thereafter
Total
$
Mineral leases are not in scope of ASC 842 and continue to
be accounted for under the guidance in ASC 932,
Extractive Activities – Mining.
(b)
Other commitments
As of
December 31,
2024, purchase
commitments for
capital expenditures
were $
obligated within the next 12 months.
In Australia, the
Company has generally
secured the ability
to transport coal
through rail contracts
and coal export
terminal contracts that are primarily funded
through take-or-pay arrangements with terms ranging up to
.
In the U.S., the Company typically
negotiates its rail and coal terminal
on an annual basis.
As of December 31,
2024, these Australian
and U.S. commitments
under take-or-pay
arrangements totaled
$
$
million thereafter.
25. Contingencies
Surety bond, letters of credit and bank guarantees
In the
normal course
of business,
the Company
is a
party to
certain guarantees
and financial
instruments with
off-balance sheet risk, such as bank
guarantees, letters of credit and performance
or surety bonds.
related to these arrangements are reflected in the Company’s Consolidated Balance Sheets.
Management does
not expect any material losses to result from these guarantees
or off-balance sheet financial instruments.
For
the U.S.
Operations,
in
order to
provide
the required
financial
assurance
for post
mining
reclamation,
the
Company generally uses
surety bonds. The
Company uses surety
bonds and bank
letters of credit
to collateralize
certain
other
obligations
including
contractual
obligations
under
workers’
compensation
insurances.
As
of
December
31,
2024,
the
Company
had
outstanding
surety
bonds
of
$
credit issued from our letter of credit sublimit under the
ABL Facility.
For
the
Australian
Operations,
as
at
December
31,
2024,
the
Company
had
bank
guarantees
outstanding
of
$
or-pay arrangements of the Company.
As at December 31, 2024, the Company, in aggregate, had total outstanding bank guarantees provided of $
million to
secure
obligations
and commitments,
including $
available under the ABL Facility.
Future regulatory changes relating to the above obligations could result in
increased obligations, additional costs
or additional collateral requirements.
Restricted deposits – cash collateral
As required by certain agreements, the Company had total cash collateral in
the form of deposits of $
and $
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
152
guarantees not issued
under the ABL
Facility,
other performance obligations,
various other operating
agreements
and contractual obligations under workers compensation insurance. These deposits are restricted and classified
as “non-current” assets in the Consolidated Balance Sheets.
In accordance
with the
terms of
the ABL
Facility,
the Company
may be
required
to cash
collateralize
the ABL
Facility to the extent of outstanding letters
of credit after the expiration or termination
date, including an event of
default, of such letter of credit.
As of December 31, 2024,
and as such
Stamp duty on Curragh acquisition
On September 27, 2022, the Company received from
the Queensland Revenue Office, or QRO,
an assessment
of the stamp duty
payable on its
acquisition of the Curragh
mine in March
2018. The QRO assessed
the stamp
duty on this acquisition at an amount of $
2022,
the
Company
filed
an
objection
to
the
assessment.
The
Company’s
objection
was
based
on
legal
and
valuation advice obtained, which supported an estimated stamp duty
payable of $
the Curragh acquisition.
On January 9, 2024, the Company’s objection
to the assessed stamp duty was disallowed by the
QRO.
As per the Taxation
Administration Act (Queensland)
2001, the Company
can only appeal
or apply for a
review
of QRO’s
decision if
it has
paid the
total assessed
stamp duty
of $
interest of $
On March 6, 2024,
the Company made an
additional payment, and
paid in full, the stamp
duty assessed by
the
QRO.
The Company disputes
the additional
amount assessed
of stamp duty
and, on March
11,
2024, filed its
appeal
with the Supreme
Court of Queensland.
The outcome of
the appeal remains
uncertain and as
such,
asset has been recognized at December 31, 2024.
From time to time, the
Company becomes a
party to other legal
proceedings in the
ordinary course of business
in Australia, the U.S. and other countries where the Company does business.
Based on current information, the
Company believes that such other pending
or threatened proceedings are likely to
be resolved without a material
adverse
effect
on
its
financial
condition,
results
of
operations
or
cash
flows.
In
management’s
opinion,
the
Company is not currently
involved in any legal
proceedings, which individually
or in the aggregate
could have a
material effect on the financial condition, results of
operations and/or liquidity of the Company.
26. Related
‑
Party Transactions
Coronado Group LLC
Under
the
Coronado
Group LLC
agreement
(as
amended,
effective
October 23,
2018),
incentive units were designated and authorized for issuance
to certain members of management to motivate and
retain senior management.
The plan is designated
to allow key members
of management to share
in the profits
of the Company
after certain
returns are
achieved by
the equity
investors. The
incentive units
constitute “profit
interests” for the benefit of senior management in consideration
of services rendered and to be rendered.
Coronado Coal LLC and Coronado II
LLC merged to form Coronado Group
LLC in July 2015. Coronado IV
LLC
was
merged
into
Coronado
Group LLC,
the
Company’s
controlling
stockholder,
on
June 30,
2016.
Under
the
updated formation
agreement dated
June 30, 2016,
the
formation of
Coronado Group LLC
were replaced
by these
new units.
At December
31, 2024
and 2023,
management incentive units were outstanding.
The incentive units are comprised of three
tiers, which entitle the holders to receive
distributions from Coronado
Group LLC subordinate
to the
distributions to
be received
by Members.
As of
December 31, 2024
and 2023,
a
portion of the authorized
units have been allocated
to various members of the
Company’s management including
Mr. Garold Spindler,
our former CEO and current Executive Chair, who is also member of Coronado Group LLC.
Stockholder’s Agreement and Registration Rights
and Sell-Down Agreement
As
of
December
31,
2024,
Coronado
Group LLC
has
beneficial
ownership
in
the
aggregate
of
%
of
the
Company’s
Shares.
On
September 24,
2018,
Coronado
Group LLC
and
the
Company
entered
into
a
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
2024
153
Stockholder’s Agreement
and a
Registration Rights
and Sell-Down
Agreement
which governs
the relationship
between Coronado Group LLC
and the Company
while the funds
manage by The
Energy & Minerals
Group, or
EMG
Group,
beneficially
owns
in
the
aggregate
at
least
%
of
our
outstanding
shares
of
common
stock
(including
shares
of
common
stock
underlying
CDIs),
including
certain
governance
matters
relating
to
the
Company.
Under
this
Agreement,
Coronado
Group LLC
has
the
ability
to
require
the
Company
to
register
its
shares under
the U.S.
Securities Exchange
Act of
1934 and
to provide
assistance
to Coronado
Group LLC
in
selling some or all of its shares (including in the form of CDIs).
The Stockholder’s Agreement provides for the following:
•
Consent rights: Coronado
Group LLC (or its
successors or permitted
assigns) will have
certain consent
rights, whereby pre-agreed actions
require approval by Coronado
Group LLC prior to these
actions being
undertaken;
•
Provision
of
information
to
Coronado
Group LLC:
There
will
be
ongoing
information
sharing
arrangements
relating
to
the
provision
of
financial
and
other
information
by
the
Company
and
its
subsidiaries to Coronado Group LLC group entities and cooperation and assistance between the parties
in connection with any financing (or refinancing) undertaken
by the Company;
•
Pro rata issuances: While Coronado Group LLC Group entities beneficially own in the
aggregate at least
% of
the outstanding
Shares, unless
Coronado
Group LLC
(or
its successors
or permitted
assigns)
agrees
otherwise,
issuances
of
equity
securities
must
have
been
offered
to
Coronado
Group LLC
in
respect of
its pro
rata shares
and any
equity securities
to be
allocated by
the Company
under a
share
incentive plan will be sourced by purchasing them in the market
rather than by issuing them; and
•
Board rights:
Certain rights
regarding the
board including
the right,
but not
the obligation,
to designate
the Directors
to be
included in the
membership of
any board committee,
except to the
extent that
such
membership would violate applicable securities
laws or stock exchange or stock market rules.
Relationship Deed
On September 24, 2018, the Company and Coronado Group LLC entered into a Relationship Deed under which
the Company provides
a number of indemnities
in favor of Coronado
Group LLC, including in
relation to certain
ASX initial public
offering, or
Australian IPO, -related
matters and also
certain guarantees
that have in
the past
been provided or
arranged by Coronado
Group LLC and
its affiliates
in support of
Company obligations.
Under
the
Relationship
Deed,
Coronado
Group LLC
also
agrees
to
indemnify
the
Company
in
relation
to
certain
Australian IPO-related matters and reimburse certain costs.
27.
Subsequent Events
Ordinary dividends
On
February
19,
2025,
the
Company’s
Board
of
Directors
declared
a
bi-annual
fully
franked
fixed
ordinary
dividend of $
, Australia
time,
and
be
payable
on
,
Australia
time.
CDIs
will
be
quoted
“ex”
dividend
on
March
11,
2025,
Australia time. The total ordinary dividend will be funded
from available cash.
Coronado Global Resources Inc. Form 10-K December 31,
2024
154
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To
the Shareholders and the Board of Directors of Coronado
Global Resources Inc.
Opinion on the Financial Statements
We
have
audited
the
accompanying
consolidated
balance
sheets
of
Coronado
Global
Resources
Inc.
(the
Company)
as
of
December
31,
2024
and
2023,
the
related
consolidated
statements
of
operations
and
comprehensive
income,
stockholders’
equity
and
cash
flows
for
each
of
the
three
years
in
the
period
ended
December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial
statements present fairly,
in all material respects, the
financial position of
the Company at December 31, 2024 and
2023, and the results of its
operations and its cash flows for
each of the
three
years
in
the
period
ended
December
31,
2024,
in
conformity
with
U.S.
generally
accepted
accounting
principles.
We
also
have
audited,
in
accordance
with
the
standards
of the
Public
Company
Accounting
Oversight
Board
(United States)
(PCAOB), the
Company's internal control
over financial
reporting as
of December
31, 2024,
based
on
criteria
established
in
Internal
Control-Integrated
Framework
issued
by
the
Committee
of
Sponsoring
Organizations of the
Treadway Commission (2013 framework)
and our
report dated
February 19,
2025 expressed
an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's
management. Our responsibility is to express
an opinion
on the
Company’s financial statements
based on
our audits.
We are a
public accounting firm
registered
with the PCAOB
and are
required to
be independent
with respect to
the Company
in accordance
with the
U.S.
federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material
misstatement, whether
due to
error or
fraud. Our
audits included
performing procedures
to assess
the risks
of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to
those risks.
Such procedures
included examining,
on a
test basis,
evidence regarding
the amounts
and disclosures
in the
financial statements.
Our audits
also included
evaluating the
accounting principles
used
and significant
estimates made
by management,
as well
as evaluating
the overall
presentation
of the
financial
statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matter
The critical
audit
matter communicated
below is
a matter
arising
from
the current
period
audit
of the
financial
statements that was communicated
or required to be communicated
to the audit committee and that:
(1) relates
to accounts
or disclosures that
are material
to the
financial statements and
(2) involved our
especially challenging,
subjective, or
complex judgments.
The communication
of the critical
audit matter
does not alter
in any way
our
opinion on the consolidated financial
statements, taken as a whole,
and we are not, by
communicating the critical
audit matter below,
providing a separate opinion
on the critical audit matter
or on the accounts or
disclosures to
which it relates.
Coronado Global Resources Inc. Form 10-K December 31,
2024
155
Accounting for income taxes
Description
of
the
matter
As disclosed in Note
21 to the consolidated
financial statements, the
Company recognized
total deferred
tax assets
of $415.0
million at
December 31,
2024, which
includes deferred
tax
assets
of
$115.7
million
related
to
tax
losses
carried
forward
from
prior
periods.
The
Company
recorded
a
valuation
allowance
of
$114.1
million
against
an
equal
amount
of
deferred tax assets at December 31, 2024.
Auditing management’s analysis of the realizability of deferred tax assets and the treatment
of tax
losses
in
the
overall
income
tax
calculation,
involved
complex
auditor
judgment,
in
order
to
assess
management’s
application
of
complex
tax
laws
to
the
Company’s
tax
structure and the resulting tax calculations.
How
we
addressed
the
matter in our audit
We obtained an understanding, evaluated the
design and tested the operating
effectiveness
of controls over
the Company’s
process to assess
income and deferred
taxes at year
end,
including the determination of whether valuation allowances
were required.
Our
audit
procedures,
which
involved
tax
professionals
with
knowledge
of
relevant
jurisdictional
tax
laws
and
regulations,
included,
among
other
procedures,
obtaining
an
understanding
of
the
Company’s
overall
tax
structure
and
evaluating
management’s
application
of
the
relevant
tax
laws,
on
a
taxpayer-by-taxpayer
basis
and
assessing
the
relevance,
completeness
and
accuracy
of
the
data
utilized
in
the
income
tax
calculations
and
testing
the
calculations
themselves.
Our
procedures
also
included
assessing
the
positive
and
negative
evidence
available
to
determine
the
realizability
of the
deferred
tax
assets,
for
example,
by
reference
to
expected
amounts
of
future
taxable
income
or
the
reversal of temporary differences.
/s/
We have served as the Company’s auditor
since 2020.
February 19, 2025
Coronado Global Resources Inc. Form 10-K December 31,
2024
156
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
Coronado Global Resources Inc. Form 10-K December 31,
2024
157
ITEM 9A.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We are
subject to
the periodic
reporting requirements
of the
Exchange Act.
We have
designed our
disclosure
controls and procedures
to provide reasonable
assurance that information we
disclose in reports
we file or
submit
under the Exchange
Act is recorded,
processed, summarized,
and reported within
the time periods
specified in
the
rules
and
forms
of
the
SEC.
Disclosure
controls
and
procedures
are
controls
and
procedures
that
are
designed
to
ensure
that
information
required
to
be
disclosed
in
our
reports
filed
under
the
Exchange
Act
is
recorded, processed, summarized
and reported, within the
time periods specified
in the SEC’s rules
and forms.
Disclosure controls and procedures
include, without limitation,
controls and procedures
designed to ensure that
information required
to be
disclosed by
our company
in the
reports that
it files
or submits
under the
Exchange
Act is
accumulated and communicated
to our
management, including its
principal executive
and principal
financial
officers,
or
persons
performing
similar
functions,
as
appropriate
to
allow
timely
decisions
regarding
required
disclosure.
The Company, under the supervision and with the participation of its management, including the Chief Executive
Officer and the Interim Principal Financial Officer,
evaluated the effectiveness of the design and operation of
the
Company’s
disclosure controls
and procedures
(as defined
in Rules
13a-15(e) under
the Exchange
Act) as
of
the end of
the period covered
by this report,
and concluded
that such disclosure
controls and
procedures were
effective to provide reasonable assurance that the
desired control objectives were achieved.
Changes to Internal Control over Financial Reporting
There have been
no changes in
our internal control
over financial reporting
or in
other factors that
occurred during
our
last
fiscal
quarter
that
have
materially
affected,
or
are
reasonably
likely
to
materially
affect,
our
internal
controls over financial reporting.
Management’s Report on Internal Control
Over Financial Reporting
Our management
is responsible
for establishing and
maintaining adequate internal
control over
financial reporting
as
defined
in
Rules
13a-15(f)
under
the
Exchange
Act.
Internal
control
over
financial
reporting
is
a
process
designed to
provide reasonable
assurance regarding
the reliability
of financial
reporting and
the preparation
of
the Company’s
consolidated financial
statements for
external purposes
in accordance
with generally
accepted
accounting principles.
Internal control over financial reporting includes those
policies and procedures that (i) pertain
to the maintenance
of records that,
in reasonable detail,
accurately and fairly
reflect the transactions
and dispositions of
the assets
of the
Company;
(ii) provide
reasonable
assurance
that
transactions
are recorded
as
necessary
to permit
the
preparation of the
consolidated financial statements in
accordance with generally
accepted accounting principles,
and
that
receipts
and
expenditures
of
the
Company
are
being
made
only
in
accordance
with
appropriate
authorizations of management
and directors of
the Company;
and (iii) provide
reasonable assurance
regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s
assets that could
have a material effect on the consolidated financial
statements.
Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements. Also,
projections of
any evaluation
of effectiveness
to future
periods are
subject to
the risk
that
controls may
become inadequate
because of
changes in
conditions, or
that the
degree of
compliance with
the
policies or procedures may deteriorate.
Management
conducted
an
assessment
of
the
Company’s
internal
control
over
financial
reporting
as
of
December 31, 2024, using the framework specified in
Internal Control – Integrated Framework (2013)
, published
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission
(COSO).
Based
on
this
assessment, management
concluded that
the Company’s
internal control
over financial
reporting was
effective
as of December 31, 2024.
Our
Independent
Registered
Public
Accounting
Firm,
Ernst
&
Young,
has
audited
our
internal
control
over
financial reporting, as stated in their unqualified opinion
report included herein.
Coronado Global Resources Inc. Form 10-K December 31,
2024
158
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To
the Shareholders and the Board of Directors of Coronado
Global Resources Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Coronado Global Resources
Inc.’s internal control over financial
reporting as of December 31,
2024,
based
on
criteria
established
in
Internal
Control—Integrated
Framework
issued
by
the
Committee
of
Sponsoring Organizations
of the
Treadway
Commission (2013
framework) (the
COSO criteria).
In our opinion,
Coronado Global
Resources
Inc. (the
Company)
maintained,
in
all material
respects,
effective
internal control
over financial reporting as of December 31, 2024, based on the
COSO criteria.
We
also
have
audited,
in
accordance
with
the
standards
of the
Public
Company
Accounting
Oversight
Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023,
the
related
consolidated
statements
of
operations
and
comprehensive
income,
stockholders’
equity
and
cash
flows for each
of the three
years in the
period ended
December 31, 2024,
and the related
notes and our
report
dated February 19, 2025 expressed an unqualified opinion
thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment
of the effectiveness
of internal control
over financial reporting
included in the
accompanying
Management’s Report on
Internal
Control Over
Financial Reporting. Our
responsibility is to
express an opinion on
the
Company’s
internal
control
over
financial
reporting
based
on
our
audit.
We
are
a
public
accounting
firm
registered with the PCAOB and are required to be independent with respect
to the Company in accordance with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission and the PCAOB.
We conducted our audit
in accordance with the standards
of the PCAOB. Those standards
require that we plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
effective
internal
control
over
financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding
of internal control over financial reporting,
assessing the risk that
a
material
weakness
exists,
testing
and
evaluating
the
design
and
operating
effectiveness
of
internal
control
based
on
the
assessed
risk,
and
performing
such
other
procedures
as
we
considered
necessary
in
the
circumstances. We believe that our audit provides a reasonable
basis for our opinion.
Definition and Limitations of Internal Control Over
Financial Reporting
A
company’s
internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding the reliability of financial reporting
and the preparation of financial statements
for external purposes in
accordance with generally
accepted accounting principles.
A company’s internal
control over financial
reporting
includes those policies
and procedures that (1)
pertain to the maintenance
of records that, in
reasonable detail,
accurately and
fairly reflect
the transactions and
dispositions of the
assets of
the company;
(2) provide reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
accordance with
generally accepted
accounting principles,
and that
receipts and
expenditures of
the company
are being
made only
in accordance
with authorizations
of management
and directors
of the
company; and
(3)
provide
reasonable
assurance
regarding
prevention
or
timely
detection
of
unauthorized
acquisition,
use,
or
disposition of the company’s assets that could
have a material effect on the financial statements.
Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements. Also,
projections of
any evaluation
of effectiveness
to future
periods are
subject to
the risk
that
controls may
become inadequate
because of
changes in
conditions, or
that the
degree of
compliance with
the
policies or procedures may deteriorate.
/s/ Ernst & Young
Brisbane, Australia
February 19, 2025
Coronado Global Resources Inc. Form 10-K December 31,
2024
159
ITEM 9B.
OTHER INFORMATION
During
the quarter
ended
December
31, 2024,
no
director
or officer
(as
defined
in Rule
16a-1(f)
promulgated
under the Exchange
Act) of the
Company
adopted
terminated
non
-
Rule
10b5-1
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT
INSPECTIONS
None.
Coronado Global Resources Inc. Form 10-K December 31,
2024
160
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE.
The information required to
be furnished by
this Item will be
set forth in
our definitive proxy statement
for the 2025
Annual General
Meeting of
Stockholders, or
the Proxy
Statement, under
the headings
“Executive Officers
and
Corporate Governance
.” “Delinquent
Section 16(a)
Reports”
and the
Company’s
“Securities Dealing
Policy,
or
Insider Trading Policy,”
and is
incorporated herein by
reference and
made a
part hereof
from the
Proxy Statement.
ITEM 11.
EXECUTIVE COMPENSATION.
The information required
to be furnished
by this Item
will be set forth
in the Proxy Statement
under the heading
“Executive
Compensation”
and
is
incorporated
herein
by
reference
and
made
a
part
hereof
from
the
Proxy
Statement.
ITEM
12.
SECURITY
OWNERSHIP
OF
CERTAIN
BENEFICIAL
OWNERS
AND
MANAGEMENT
AND
RELATED STOCKHOLDER
MATTERS.
The
information
required
to
be
furnished
by
this
Item
will
be
set
forth
in
the
Proxy
Statement
under
the
heading “Security
Ownership
of
Certain
Beneficial
Owners
and
Management”
and
is
incorporated
herein
by
reference and made a part hereof from the Proxy Statement.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required to be furnished by this Item will be set forth in
the Proxy Statement under the headings
“Certain
Relationships
and
Related
Transactions”
and
“Executive
Officers
and
Corporate
Governance”
and
is
incorporated herein by reference and made a part hereof from
the Proxy Statement.
ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES.
The information required
to be furnished
by this Item
will be set forth
in the Proxy Statement
under the heading
“Ratification of Appointment of
Ernst & Young as the Company’s Independent Registered Public
Accounting Firm
for the Fiscal Year
Ending December 31, 2025” and is
incorporated herein by reference and made a
part hereof
from the Proxy Statement.
Coronado Global Resources Inc. Form 10-K December 31,
2024
161
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
(a)
The following documents are filed as part of this
Annual Report on Form 10-K:
1.
Annual Report on Form 10-K.
2.
the required information is included in the Financial Statements
or related notes thereto.
3.
are set forth in the Exhibit Index.
(b)
The documents listed in
the Exhibit Index of
this Annual Report on
Form 10-K are incorporated
by reference
or are filed with this Annual Report on Form 10-K, in
each case as indicated therein.
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
2.1*
3.1
3.2
4.1
Statement
on
Form
10
(File
No.
000-56044)
filed
on
April
29,
2019
and
incorporated
herein by reference)
4.2
4.3
4.4
4.5
10.1
Coronado Global Resources Inc. Form 10-K December 31,
2024
162
Exhibit No.
Description of Document
10.2†‡
10.3
10.4†
10.5‡
10.6‡
10.7
10.8
10.9>‡
10.10>
10.11>‡
10.12>‡
10.13>
10.14>‡
Coronado Global Resources Inc. Form 10-K December 31,
2024
163
Exhibit No.
Description of Document
10.15>‡
10.16>
10.17>
10.18>
10.19>
10.20>
10.21>
10.22>
10.23>
10.24‡
10.25‡
10.26‡
10.28
10.29
10.30
Coronado Global Resources Inc. Form 10-K December 31,
2024
164
Exhibit No.
Description of Document
10.31†‡
19.1
21.1
23.1
23.2
23.3
23.4
23.5
31.1
31.2
32.1
95.1
96.1
96.2
96.3
96.4
101
The following materials from the Company’s Annual Report on Form 10-K for the period
ended December
31,
2024,
formatted
in
iXBRL
(Inline
Extensible
Business
Reporting
Language): (i) Consolidated Balance
Sheets, (ii) Consolidated
Statements of Operations
and Consolidated Statements of
Comprehensive Income, (iii)
Consolidated Statements
of Stockholders’ Equity/Members’ Capital, (iv) Consolidated
Statements of Cash Flows,
(v) related notes to these financial statements and (vi)
document and entity information
104
Cover Page
Interactive Data
File (the cover
page XBRL
tags are embedded
within the
Inline XBRL document)
____________________
*
Portions of this
exhibit have been omitted
pursuant to Item 601(b)(2)(ii)
of Regulation S-K,
which portions
will be furnished to the Securities and Exchange Commission
upon request.
†
Certain schedules and exhibits to this
agreement have been omitted pursuant to Item
601(a)(5) and Item
601(a)(6)
of
Regulation
S-K.
A
copy
of
any
omitted
schedule
and/or
exhibit
will
be
furnished
to
the
Securities and Exchange Commission upon request.
‡
Portions
of
this
exhibit
have
been
omitted
pursuant
to
Item
601(b)(10)(iv)
of
Regulation
S-K,
which
portions will be furnished to the Securities and Exchange Commission
upon request.
>
Management contract, compensatory plan or arrangement
Coronado Global Resources Inc. Form 10-K December 31,
2024
165
ITEM 16.
FORM 10-K SUMMARY
None.
Coronado Global Resources Inc. Form 10-K December 31,
2024
166
SIGNATURES
Pursuant to the
requirements of
Section 13
or 15(d) of
the Securities
Exchange Act
of 1934, the
registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Coronado Global Resources Inc.
(Registrant)
By:
/s/ Douglas Thompson
Douglas Thompson
Managing Director and Chief Executive Officer (as
duly
authorized officer and as principal executive officer
of
the registrant)
Date: February 19,
2025
Pursuant to the requirements
of the Securities Exchange
Act of 1934, this
report has been
signed below by
the
following persons, on behalf of the registrant and in the
capacities and on the dates indicated.
Name
Title
Date
/s/ Douglas Thompson
Managing
Director
and
Chief
Executive
Officer (Principal Executive Officer)
February 19, 2025
Douglas Thompson
/s/ Sandeep Deoji
Vice
President
Group
Financial
Control
(Interim Principal Financial Officer)
February 19, 2025
Sandeep Deoji
/s/ Garold Spindler
Director
February 19, 2025
Garold Spindler
/s/ William Koeck
Director
February 19, 2025
William Koeck
/s/ Philip Christensen
Director
February 19, 2025
Philip Christensen
/s/ Greg Pritchard
Director
February 19, 2025
Greg Pritchard
/s/ Laura Tyson
Director
February 19, 2025
Laura Tyson
/s/ Aimee R. Allen
Director
February 19, 2025
Aimee R. Allen
/s/ Jan C. Wilson
Director
February 19, 2025
Jan C. Wilson
TABLE OF CONTENTS
Part I, Item 1A. Risk Factors Risks Related To The Supply Deed with Stanwell May Adversely Affect Our FinancialItem 8. Financial Statements and Supplementary DataNote 14. Interest Bearing LiabilitiesItem 9. Changes in and Disagreements with Accountants on Accounting and FinancialItem 9A. Controls and ProceduresItem 9B. Other InformationItem 9C. Disclosure Regarding Foreign Jurisdictions That Prevent InspectionsPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management andItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesItem 15. Exhibits and Financial Statement SchedulesItem 16. Form 10-k Summary