Further information available on Market Forces' website via the below links.

Resolution and supporting statement: https://publications.marketforces.org.au/link/792976/

Whitehaven Coal valuation model findings: https://investorbriefings.marketforces.org.au/link/24193/

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Resolution supporting statement

Whitehaven states it supports the aims of the Paris Agreement and is prioritising capital discipline.[1] [2] Shareholders are concerned that the Company's disclosures do not demonstrate adequate consideration of the significant transition risk facing the business, leaving unanswered questions as to the resilience of major capital allocation decisions under plausible low coal demand and price scenarios consistent with global climate goals.

This resolution simply asks the Company to close a disclosure gap by describing how it makes critical choices between shareholder returns and progressing development projects under its capital allocation framework on a regular basis.

Crucial gaps in resilience testing

In its 2025 Sustainability Report, Whitehaven published the results of resilience testing of its operating portfolio under two International Energy Agency (IEA) scenarios: the 2.4°C Stated Policies (STEPS) and the 1.5°C Net Zero by 2050 (NZE) scenarios.[3]

Whitehaven's analysis does not adequately inform investors about company-wide risk. It contains two critical shortcomings:

1. It excludes development (growth) projects, thereby ignoring a large portion of the business.
2. The published conclusions are qualitative – assessing only whether free cash flow is positive – rather than testing it against the Company's 15% to 25% hurdle rate for long-term growth projects, or against dividend sustainability.

Quality scenario analysis would allow shareholders to assess:

• Whether development project returns clear the Company's hurdle rate under pathways aligned with global climate goals.
• Whether Whitehaven can sustain its distributions under those pathways.
• How returns on planned growth capital expenditure compare with accelerated distributions.

While Whitehaven claims to conduct climate scenario analysis at the point of final investment decision (FID) for “new mining projects,”[4] this is far too late to be useful for investors’ assessment of strategy risks and leaves investors with little oversight of major capital allocation decision-making processes and assumptions.

Whitehaven’s price deck sits well above external benchmarks

Whitehaven's base case coal price forecast, provided by coal industry consultancy Commodity Insights, sits well above external benchmarks.[5] Whitehaven’s 2030 base case thermal coal price is:

• 22% higher than IEA STEPS.
• 28% higher than the Australian Government.
• 38% higher than median analyst consensus estimates.
• 41% higher than IEA NZE.

Price is one of the largest inputs to project economics, and a price deck significantly above credible external benchmarks inflates every investment case built on it. The considerable risk to shareholders is that Whitehaven approves development projects based on overly optimistic assumptions, locking in capital that delivers sub-par returns as the world moves away from coal.

Modelling highlights development project risks

Market Forces commissioned a detailed discounted cash flow model of Whitehaven's development assets using publicly disclosed information.[6] This modelling found:

• Under STEPS pricing, most development projects fail to create value even on a very conservative 2.5% production cost inflation assumption. When Whitehaven's 10-year average production cost inflation rate (8.6%) is applied, every development project is value-destructive.
• Most development projects require coal prices well above STEPS to meet the Company's own 20% hurdle rate[7] — that is, they only clear the hurdle in a world where existing climate policies fail to be delivered and warming exceeds 2.4°C, driving unacceptable social and economic risks.[8]
• Under NZE pricing, free cash flow turns negative before 2030 for the existing operating portfolio. This is despite Whitehaven claiming its portfolio is “resilient until the mid-2030s” under the NZE.[9]

Greater coal expansion generates less shareholder value

The modelling concludes that Whitehaven would generate nearly three times more net present value (NPV) per share by operating its existing assets and enhancing distributions, rather than progressing its coal growth strategy. Progressing all of its expansion projects would result in $4.21 less NPV per share compared with operating existing assets to end of life.

Realising the Vickery Extension, Winchester South and Blackwater South projects would require an estimated $5 billion (nominal) in upfront capital expenditure. While spending this capital on the projects themselves would be value destructive, redirecting it to an accelerated share buyback could generate around $2.90 per share of NPV upside. A buyback of this kind is expressly encouraged under Whitehaven's capital allocation framework.[10]

Carbon cost posing growing resilience risk

The Company states that its FY25 on-site abatement "did not fully satisfy the obligations under the Safeguard Mechanism," and that carbon credits will remain "a key lever" in meeting those obligations "for the foreseeable future."[11]

If all development projects were to proceed, carbon costs are projected to reach 6% of EBITDA by 2040 on EY's central Australian carbon credit unit case, and 10% on EY's high price case. Abatement activity would reduce the Company’s carbon liability, but would add to already-high unit production costs.[12]

Whitehaven must justify growth spend over shareholder distributions

Whitehaven has not provided adequate evidence that progressing its growth projects is a good use of capital. The Company’s capital allocation framework states that the “payout ratio may exceed target if returning surplus capital is more compelling than growth.”[13] There is a compelling case for payouts rather than growth across a range of plausible scenarios.[14]

To have confidence present value is being maximised, shareholders would need evidence that maintaining growth plans makes sense today under a range of scenarios. Testing that occurs only as capital is committed, on assumptions shareholders never see, offers no such confidence.

What the resolution is seeking

This resolution asks the Company to provide additional disclosure addressing the gaps in its capital allocation process and portfolio resilience testing, which are material to investors' assessment of strategy risk and value. Specifically, shareholders ask the Company to describe its process for assessing capital allocation decisions between shareholder returns and development projects, including any resilience testing against plausible low demand and low price scenarios, along with the key assumptions and sources underpinning those assessments.

Shareholders are urged to support this resolution.

Footnotes:
[1] https://whitehavencoal.com.au/wp-content/uploads/2025/09/WHC_SR2025_FINAL2_WEB.pdf
[2] https://whitehavencoal.com.au/wp-content/uploads/2026/05/Q3-FY26-Transcript.pdf, https://whitehavencoal.com.au/dividends-capital-management/
[3] https://whitehavencoal.com.au/wp-content/uploads/2025/09/WHC_SR2025_FINAL2_WEB.pdf
[4] Ibid.
[5] https://investorbriefings.marketforces.org.au/link/365882/
[6] Ibid.
[7] Mid-point of Whitehaven’s disclosed 15-25% long-term growth project hurdle rate. https://whitehavencoal.com.au/wp-content/uploads/2025/09/WHC_2025_Annual_Report.pdf
[8] https://www.acs.gov.au/pages/national-climate-risk-assessment
[9] https://whitehavencoal.com.au/wp-content/uploads/2025/09/WHC_SR2025_FINAL2_WEB.pdf
[10] https://whitehavencoal.com.au/dividends-capital-management/
[11] https://whitehavencoal.com.au/wp-content/uploads/2025/09/WHC_SR2025_FINAL2_WEB.pdf
[12] https://investorbriefings.marketforces.org.au/link/365882/
[13] https://whitehavencoal.com.au/dividends-capital-management/
[14] https://investorbriefings.marketforces.org.au/link/365882/