Coronado Global Resources Inc. - Annual Report: 2022 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM
10-K
___________________________________________________
(Mark One)
☒
OF 1934
For the fiscal year ended
December 31, 2022
OR
☐
ACT OF 1934
For the transition period from to
Commission File Number:
000-56044
___________________________________________________
Coronado Global Resources Inc.
(Exact name of registrant as specified in its charter)
___________________________________________________
Delaware
83-1780608
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Level 33, Central Plaza One
,
345 Queen Street
Brisbane, Queensland
,
Australia
,
4000
(Address of principal executive offices) (Zip Code)
(
61
)
7 3031 7777
(Registrant’s telephone number, including area code)
___________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
Securities registered pursuant to Section 12(g) of the Act:
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Common stock, par value $0.01 per share
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
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Yes
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files).
Yes
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer
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Smaller reporting company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by
the registered public accounting firm that prepared or issued its audit report.
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registrant included in the filing reflect the correction of an error to previously issued financial statements.
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based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b).
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
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The registrant’s common stock is publicly traded on the Australian Securities Exchange in the form of CHESS Depositary Interests,
or CDIs, convertible at the option of the holders into shares of the registrant’s common stock on a 10-for-1 basis. The aggregate
market value of the registrant’s common stock, par value $0.01 per share, in the form of CDIs, held by non-affiliates of the registrant
(without admitting that any person whose shares are not included in such calculation is an affiliate), computed by reference to the
price at which the CDIs were last sold on June 30, 2022, the last business day of the registrant’s most recently completed second
fiscal quarter, as reported on the Australian Securities Exchange, was $
945,033,096
.
The total number of shares of the registrant’s common stock, par value $0.01 per share, outstanding on December 31, 2022, including
shares of common stock underlying the issued and outstanding CDIs, was
167,645,373
.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the registrants
2023 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Documents
incorporated by reference in this report are listed in the Exhibit Index of this Annual Report on Form 10-K.
Steel starts
here.
Annual Report on Form 10-K for the year ended December 31, 2022.
TABLE OF CONTENTS
Page
Number
PART I
8
42
75
76
96
97
PART II
98
99
100
116
119
161
162
164
164
PART III
165
165
165
165
165
PART IV
166
170
171
Coronado Global Resources Inc. Form 10-K December 31, 2022 5
EXPLANATORY NOTE
Unless otherwise noted, references in this Annual Report on Form 10-K to “we,” “us,” “our,” “Company,” or
“Coronado” refer to Coronado Global Resources Inc. and its consolidated subsidiaries and associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Annual Report on Form 10-K are expressed in metric tons, or
Mt, millions of metric tons, or MMt, or millions of metric tons per annum, or MMtpa, except where otherwise
stated. One Mt (1,000 kilograms) is equal to 2,204.62 pounds and is equivalent to 1.10231 short tons. A net ton
is equivalent to a short ton, or 2,000 pounds. In addition, all dollar amounts contained herein are expressed in
United States dollars, or US$, 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 the Russia
and Ukraine war, as well as risks related to government actions with respect to trade agreements,
treaties or policies;
• a decrease in the availability or increase in costs of key supplies, capital equipment or commodities,
such as diesel fuel, steel, explosives and tires;
• the extensive forms of taxation that our mining operations are subject to, and for future tax regulations
and developments. For example, the amendments to the coal royalty regime implemented by the
Queensland State Government in Australia introducing higher tiers to the coal royalty rates applicable
to our Australian Operations;
• severe financial hardship, bankruptcy, temporary or permanent shut downs or operational
challenges, due to future public health crisis (such as COVID-19 pandemic) 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;
• 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;
Coronado Global Resources Inc. Form 10-K December 31, 2022 6
• 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;
• risks unique to international mining and trading operations, including tariffs and other barriers to
trade;
• 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;
• concerns about the environmental impacts of coal combustion, including possible impacts on global
climate issues, which could result in increased regulation of coal combustion and requirements to
reduce greenhouse gas, or GHG, emissions in many jurisdictions, which could significantly affect
demand for our products or our securities and reduced access to capital and insurance;
• 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, 2022 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. You should not interpret the disclosure of any risk to imply that the risk has not already materialized.
Furthermore, 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, 2022 8
PART I
ITEM 1. BUSINESS.
Overview
We are a leading producer, global marketer and exporter of a full range of Met coals. We own a portfolio of
operating mines and development projects in Queensland in Australia, and in Virginia, West Virginia and
Pennsylvania in the United States. We are one of the largest Met coal producers globally by export volume,
serving customers on five continents.
Our operations in Australia, or our Australian Operations, consist of the 100%-owned Curragh producing mining
property located in the Bowen Basin of Australia. Our operations in the United States, or our U.S. Operations,
consist of two producing mining properties (Buchanan and Logan), one temporarily idled mining property
(Greenbrier) and two development mining properties (Mon Valley, and Russell County), primarily located in the
Central Appalachian region of the United States, or CAPP, all of which are 100%-owned. Our U.S. Operations
and Australian Operations are strategically located for access to transportation infrastructure. In addition to Met
coal, our Australian Operations sell thermal coal under a long-term legacy contract assumed in the acquisition of
Curragh, which is used to generate electricity, 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
Our core business strategy focuses on the production of Met coal for the North American and seaborne export
markets. Met coal is a key ingredient in the production of steel using blast furnaces, and approximately 770
kilograms of Met coal is required to produce one ton of steel.
We have a geographically diverse customer base across a range of global markets. Major consumers of our
seaborne Met coal in 2022 were located in high-growth Asian markets, Brazil and Europe. These consumers are
all major global steel or Met coke producers. 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 56.9% of our total revenue,
including Tata Steel Limited, or Tata Steel, which accounted for 19.4% of total revenue, in 2022.
The charts below show our direct sales by geographic region in 2022 and our sales volume by export and
domestic coal sales in 2020, 2021 and 2022.
Coronado Global Resources Inc. Form 10-K December 31, 2022 9
23%
18%
12%
15%
10%
14%
5%
4%
Customer -FY2022 direct sales by coal revenue
Japan
India
South Korea
North America
South America
Europe
Australia
Other Asia countries
75%
25%
FY2020
Export
Domestic
75%
25%
FY2021
Export
Domestic
66%
34%
FY2022
Export
Domestic
Sales volume by export and domestic coal sales
To support our operations, we have proven and probable coal reserves totaling 539 MMt as of December 31,
2022, 205 MMt and 334 MMt of which are in Australia and the United States, respectively. For more information
regarding our coal reserves, see Item 2. “Properties.”
History and Australian Public Offering
We were founded in 2011 by our current Chief Executive Officer, 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.
Prior to the initial public offering, Coronado Global Resources Inc., was a wholly-owned subsidiary of Coronado
Group LLC, which is currently owned by funds managed by EMG, which we refer to, collectively, as the EMG
Group, and certain members of our management.
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.
As of December 31, 2022, the EMG Group and management beneficially owned approximately 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. In addition, Coronado
Group LLC holds one share of preferred stock Series A, par value $0.01 per share, of the Company, or the
Series A Share, which is the only share of preferred stock issued and outstanding. The holder of the Series
A
Coronado Global Resources Inc. Form 10-K December 31, 2022 10
Share is permitted to nominate and elect members of our Board of Directors in relation to the amount of the
holder’s aggregate beneficial ownership of shares of our common stock.
Organizational Structure
The following chart shows our current organizational structure:
* Coronado Global Resources Inc. holds 100% ownership interest in its subsidiaries, unless otherwise stated.
Overview of Operations
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 blast furnace as a replacement for coke.
Sales of Met coal represented approximately 95.3%
of our total coal revenues for the year ended December 31,
2022. 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 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. We compete based on coal quality and characteristics, price, customer
service and support and reliability of supply. 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 United States, Russia, Canada and
Mongolia, among others.
In 2022, the seaborne Met coal market was considerably volatile, driven by supply
concerns in key Met coal markets and continued trade flow disruptions due to sanctions imposed on Russian
coal imports following the Russian invasion of Ukraine.
Thermal Coal
Sales of thermal coal represented approximately 4.7% of our total coal revenues for the year ended December
31, 2022. The thermal coal we produce is predominantly a byproduct of mining Met coal. The thermal coal we
Coronado Global Resources Inc. Form 10-K December 31, 2022 11
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 products 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 products primarily compete 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.
The Russian invasion of Ukraine impacted global supply dynamics resulting in Met
coal crossover trades into the thermal market caused by increased thermal coal pricing.
Segments
In accordance with Accounting Standards Codification, or ASC, Topic 280,
Segment Reporting
, we have adopted
the following reporting segments:
• Australia; and
• United States.
In addition, “Other and Corporate” is not determined to be a reporting segment but 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 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.
Diversification
We have 100% ownership over all of our operating mines, allowing us full control over all operating decisions.
This control is critical during times of crisis and allows us to react swiftly and decisively to changes in global
market demands.
We benefit from a geographically diverse asset base, in Australia and the United States, with access to multiple
transportation infrastructure options, including key rail and port infrastructure, providing access to both 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.
Sanctions and bans on Russian coal resulted in European countries seeking alternative sources which also
resulted in Met coal cross trades in the thermal markets, as producers looked to benefit from the price arbitrage.
The low cost nature of our assets is a function of the quality of the assets and the available mine infrastructure
to extract our reserves efficiently. Being geographically diverse allows us to sell products to our customers in a
number of countries. This allows the sales team to leverage these relationships to provide value added solutions
such as blends with third parties, which is margin accretive.
Our Met coal production is diversified across high quality products, such as hard coking coal, or HCC, semi coking
coals, or SCC, and pulverized coal injection, or PCI, coal from our Australian Operations, and significant
production of HCC, comprising high volatile content, or High-Vol, (including sub-category A of High-Vol , or HVA,
and sub-category B of High-Vol, or HVB), coal with medium volatile content, or Mid-Vol, and coal with low volatile
content, or Low-Vol, coals from our U.S. Operations. This broad product range supports a wide variety of
customer requirements and various blending opportunities, being valued for its attractive coke-making
characteristics.
The below charts show Met product ranges for our Australian Operations and our U.S. Operations for the year
ended December 31, 2022.
Coronado Global Resources Inc. Form 10-K December 31, 2022 12
58%
8%
34%
Australia
HCC
SCC
PCI
68%
30%
2%
U.S.
Low Vol
High Vol
Mid Vol
We have a dedicated global marketing team that generates direct sales for our Met coal. 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 globally. Many of our core customers have been our longstanding
customers for over 20 years, and source our products as essential base load, which translates into a long history
of contract renewal for such customers. We are a major supplier to tier one steel mills in Japan, South Korea,
Taiwan, India, Europe, Brazil, North America and China. 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.
2022 Coronado’s coal trade flows
Overview of 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 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 sulphur 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 being exported.
Coronado Global Resources Inc. Form 10-K December 31, 2022 13
94.7%
5.3%
FY22 Coal revenue mix -Australian
Operations
Met
Thermal
Revenues from our Australian Operations represented 59.3% of our total revenue for the year ended December
31, 2022. See Item 2. “Properties” for more information regarding Curragh.
For the year ended December 31, 2022, 65.3% of the total volume of coal sold by our Australian Operations was
Met coal and 34.7% of the total volume of coal sold by our Australian Operations was thermal coal, the majority
of which is sold to Stanwell. For the year ended December 31, 2022, Curragh sold 6.3
MMt of Met coal into the
seaborne coal markets. The majority of customers purchase multiple grades or 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 Australian Operations’ sales managers, 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 2022, substantially all of Curragh’s Met coal export
sales were made under term contracts.
Overview of U.S. Operations—Buchanan and Logan
Our producing mining properties in the United States are located in the CAPP region, specifically in Virginia and
West Virginia, which is a highly-developed, 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 predominantly to global export
markets, as well as within North America.
We believe that many 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
sulphur content. Our U.S. Operations offer a range of Met coal products, with significant production of HCC,
comprising coal wth High-Vol (including HVA and HVB), coal with Mid-Vol, and coal with Low-Vol.
Sales from our U.S. Operations to export markets are typically priced with reference to a benchmark index. We
generally sell our seaborne coal through intermediaries Free on Rail (Incoterms 2010), or FOR, and, therefore,
our realized price on FOR sales does not include transportation to the seaborne port or costs to transload into a
vessel. Consistent with seaborne sales, sales to North American customers are generally sold on a FOR basis
where the customer arrangers 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 benchmark index.
For 2023, we have entered into annual contracts to sell approximately 1.6 MMt 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 40.7%
of our total revenue for the year ended December 31, 2022. See Item 2. “Properties” for more
information regarding Buchanan, Logan and the other mining properties that compose our U.S. Operations.
Coronado Global Resources Inc. Form 10-K December 31, 2022 14
96.3%
3.7%
FY22 Coal revenue mix -U.S.
Operations
Met
Thermal
0%
10%
20%
30%
40%
50%
60%
70%
80%
Xcoal
Tata
Top 5
Top 10
Top
Customers
by coal revenues
FY 22
FY 21
For the year ended December 31, 2022, 95.7% of the total volume of coal sold by our U.S. Operations was Met
coal and 4.3% was thermal coal. We sold 61.7% of total Met coal from our U.S. Operations into the seaborne
Met coal markets for the year ended December 31, 2022.
Customers
We sell most of our coal to steel producers, either directly or through intermediaries, such as brokers. We also
sell thermal coal to electricity generators either directly or through intermediaries such as brokers. Major
consumers of our seaborne Met coal in 2022 were located in India, China, Japan, South Korea, Taiwan, Brazil
and Europe. These consumers are all major global steel or Met coke producers. The majority of our sales are
made under contracts with terms of typically one year or on a spot basis.
Tata Steel
Our U.S. Operations and Australian Operations are parties to Long Term Coal Sale and Purchase Agreements
with TS Global Procurement Company Pte Ltd, or Tata Steel, with ending March 31, 2025. These Long Term
Agreements provide for the sale of a minimum aggregate total of 2.25 MMt of coal per contract year across the
Group, consisting of certain specific quantities of HCC, and pulverized coal injection, or PCI, Coal. The coal is
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 15
Xcoal
In 2022, we sold 1.9 MMt of coal to Xcoal Energy Resources LLC, or Xcoal, from our U.S. Operations. Coal
revenues from Xcoal represented 28.4%
of coal revenues from our U.S. Operations. Purchase orders with Xcoal
are entered into primarily on an ad hoc (shipment-by-shipment) basis. Xcoal, as well as most other customers,
typically take ownership of coal upon loading into the rail car (FOR) and are responsible for handling
transportation logistics to the port and beyond.
Stanwell
We are party to contractual arrangements with Stanwell, including a Coal Supply Agreement, or the CSA, and
the Curragh Mine New Coal Supply Deed, dated August 14, 2018, or the Supply Deed.
Under the CSA, 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, 2022 and for prior years.
Under the CSA, we also share part of the revenue earned from export Met 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, as follows:
• For the first 7.0 MMtpa of export coal sales: when the 12-month trailing, weighted-average realized export
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.
• For export coal sales above 7.0 MMtpa: when the 12-month trailing, weighted-average realized export
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.
The CSA also provides for:
• a tonnage rebate to Stanwell per Mt on the first 7.0 MMtpa of export coal sales and on export coal sales
above 7.0 MMtpa; and
• a rebate on run-of-mine, or ROM, coal mined in the Curragh “Pit U East Area.”
The total Stanwell rebate for the year ended December 31, 2022, was $166.0
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 agreed to certain amendments to the CSA and to enter into a New Coal Supply Agreement, or the
NCSA upon the expiration of the CSA (which is expected to occur in 2027). On July 12, 2019, we entered into
the NCSA with Stanwell. From the earlier of the expiry of the CSA, the date of termination of the CSA, and
January 1, 2029, we will continue to supply thermal coal to Stanwell under the NCSA. The term of the NCSA is
expected to be 10 years, and Coronado will supply to Stanwell 2 million ‘Tonnes Equivalent’ of thermal coal 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 export rebates which were payable under the CSA are not payable during the term of 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 expiry date 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 $243.2
million as of December 31, 2022. On January 18, 2021, the Option Coal Supply
Agreement, or the OCSA, contemplated by clause 5 of the NCSA was entered into, in respect of the supply of
certain additional coal to Stanwell during the term of the NCSA.
Coronado Global Resources Inc. Form 10-K December 31, 2022 16
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 United States. 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
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, or CQCN, an integrated
coal haulage rail system owned and operated by Aurizon Network Pty Ltd., or Aurizon Network. Curragh has
secured annual rail haulage capacity of up to 12.0
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 2.5
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). This 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 WICET Pty Ltd, 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 WICET Pty Ltd 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
WICET Pty Ltd’s external debt facilities. Our take-or-pay agreement with WICET Pty Ltd, or the WICET
Coronado Global Resources Inc. Form 10-K December 31, 2022 17
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 WICET Pty Ltd 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 WICET Pty Ltd’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 WICET Pty Ltd
if our share of WICET Pty Ltd’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 WICET Pty Ltd’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
WICET Pty Ltd. The termination payment effectively represents our proportion of WICET Pty Ltd’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, four WICET Holdings Pty Ltd shareholders have entered into administration and Take -or-Pay
Agreements subsequently terminated, resulting in the aggregate contracted tonnage of shippers decreasing from
27 MMtpa to 15.5 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, WICET Pty Ltd 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.
export sales are made through Xcoal and other intermediaries. For these sales, Xcoal or the intermediary typically
take 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 Northfork Southern and CSX Transportation railroads. In 2022, we shipped
approximately 94.7% of our total shipments via rail from our U.S. mining properties.
Northfork 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 and Greenbrier mining properties. CSX transports Logan and
Greenbrier’s coal to Kinder Morgan 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 18
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. Kinder Morgan’s 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 have dedicated inventory capacity and a take-or-pay obligation to transload one million net
tons per year through Kinder Morgan’s Pier IX Terminal to the end of March 2024. On March 1, 2022, we re-
assigned 700,000 net tons per year to Xcoal for a consideration, reducing our dedicated capacity at Kinder
Morgan’s Pier IX Terminal to 300,000 net tons per year to March 2024. On November 1, 2022, we extended our
arrangement with Kinder Morgan from April 2024 to March 2027, with an option to extend for an additional three
years, for a dedicated inventory capacity and take-or-pay obligation to transload 650,000 net tons per year. 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 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, 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 in order 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 use contractors and other third parties for exploration, mining and other services, generally, and rely on a
number of third parties for the success of our current operations and the advancement of our development
projects. See Item 1A. “Risk Factors—Our profitability could be affected adversely by the failure of suppliers
and/or outside contractors to perform.”
Competition
We operate in a competitive environment. We compete with domestic and international coal producers, traders
and brokers. We compete on price, coal quality, transportation, optionality, reputation and reliability. 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;
• industrial production levels;
• short-term constraints, including weather incidents;
• 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;
Coronado Global Resources Inc. Form 10-K December 31, 2022 19
• government regulations which restrict, or increase the cost of, using coal;
• tariffs imposed by countries, including the United States and Australia, on the import of certain steel
products and any retaliatory tariffs by other countries ; 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- 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 United States, Canada,
Russia, Mongolia and other coal producing countries. See Item 1A. “Risk Factors—We face significant
competition, which could adversely affect profitability.”
Environmental Sustainability
We are focused on extracting high quality Met coal in an environmentally responsible way. Coal mining is one of
the most environmentally regulated industries in the world, and it is vital that we consistently meet or exceed
relevant regulatory standards.
We are subject to various environmental laws, regulations and public policies in Australia and the United States.
Managing our environment and climate change risks is a key component of our corporate strategy and it is
integrated into all stages and areas or our daily operations. We seek to minimize our environmental impact and
ensure we meet or exceed our legislative and regulatory environmental obligations.
Coronado’s environmental sustainability initiatives and strategy are discussed further in our 2021 Sustainability
Report published on May 10, 2022, which can be found on our website at
www.coronadoglobal.com/sustainability/ . Nothing on our website, including our 2021 Sustainability Report or
sections thereof, shall be deemed incorporated by reference into this Annual Report on Form 10-K. Our 2022
Sustainability Report is expected to be available in May 2023.
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 Greenhouse Gas (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.
Our Australian Operations operate under an Environmental Management System, or EMS, in accordance with
ISO 14001 that contains set plans and procedures to ensure all environmental commitments are met. The EMS
is used as a tool to uphold our Australian Operations’ Environmental Policy and integrate environmental
compliance into all facets of the business. Our Australian Operations disclose GHG Scope 1 and 2 emissions
annually to the Clean Energy Regulator under the National Greenhouse and Energy Reporting Scheme.
Coronado Global Resources Inc. Form 10-K December 31, 2022 20
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.
Our operations are currently focused on implementing reporting improvements, identifying opportunities for
reducing emissions on a per ton of production basis and benchmarking ourselves against our peer group.
Coronado launched its first set of GHG targets in 2022 and has committed to targeting reductions in its Scope 1
and 2 emissions by 30% by 2030.
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 in 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.
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. For example, we
began a project to understand and define gas reservoirs at Curragh with gas production drilling that commenced
in the fourth quarter of 2022. This project will continue into 2023 with well completion and an anticipated
downstream trial of running gas converted haul trucks using the incidental coal seam gas from our operations as
a diesel substitute.
Similarly, on July 27, 2022, we officially 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. The goal of this project is to reduce the Buchanan mine methane
emissions by approximately 22 times and reduce total emissions from the mine by 61% by 2030. The initial
performance from the VAM unit is encouraging with the project achieving 94% emission reduction efficiency.
While Coronado is also exploring other projects to reduce its carbon footprint, if the VAM projections are achieved,
it may alone result in the Company meeting their target reduction by 2030.
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 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 results of operations.
Increasingly, both foreign and domestic banks, insurance companies and large investors are curtailing or ending
their financial relationships with fossil fuel-related companies. This has or is likely to continue to have adverse
impacts on the liquidity and operations of coal producers.
Additionally, federal, state and international GHG and climate change initiatives, associated regulations or other
voluntary commitments to reduce GHG emissions 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.
On November 20, 2022, the Sharm el-Sheik Conference of Parties 27, or COP27, maintained language around
fossil fuels from Glasgow Conference of Parties 26, which called on governments to accelerate the dissemination
of technologies, and the adoption of policies, to transition toward a low-emission energy system, including by
accelerating the phasedown of unabated coal power, that is coal power that does not include the capture and
storage of carbon dioxide emission and phase-out inefficient fossil fuel subsidies.
Coronado Global Resources Inc. Form 10-K December 31, 2022 21
Human Capital Disclosures
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 United States, 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.
In 2022, a number of initiatives were undertaken to enhance our culture, increase our ability to attract and retain
the workforce we need, and to continue to drive our desire to build safe, high-performing teams. This has included
extensive efforts to gather feedback from our employees and contracting partners through surveys, focus groups
and team empowerment sessions. Following analysis of the feedback, priorities were identified, and cultural
programs designed to bridge gaps between current and desired cultural states were developed and implemented.
Worldwide we had 1,735
employees as of December 31, 2022. In addition, as of December 31, 2022, there were
2,326 contractors supplementing the permanent workforce, primarily at Curragh.
As of December 31, 2022, approximately 11.5% 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. In May 2019, the Australian Fair Work Commission approved the Curragh Mine
Enterprise Agreement 2019. This EA has a nominal expiration date of May 26, 2022 and will remain in place until
replaced or terminated by the Fair Work Commission. We have been negotiating with employee bargaining
representatives for a replacement EA since March 2022. Those negotiations continue in good faith with the intent
of reaching an agreement as soon as practicable. Our U.S. Operations employ a 100% non-union labor force.
Safety
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 in full compliance with the legal and regulatory frameworks of both the United
States 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 (“TRIFR”) as of December 31, 2022 for
our Australian Operations was 3.92 and the Total Reportable Incident Rate (“TRIR”) for 12-month rolling average
as of December 31, 2022 for our U.S. Operations was 2.42. As indicated in the graphs below, our Australian
Operations outperformed the Queensland industry average in 2021 and 2022 and our U.S. Operations
outperformed the U.S. national average in 2021 and 2022. We strive to ensure that we continue to provide a safe
operating environment for all employees and contractors.
Coronado Global Resources Inc. Form 10-K December 31, 2022 22
0
4
8
12
2022 Australian Operations (TRIFR)
Australian Operations
Industry
1
2.5
4
2022 U.S. Operations (TRIR)
U.S. Operations
Industry
Workforce composition and diversity
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 a diverse and inclusive workforce, where unique
viewpoints are heard, valued and respected. We believe this directly impacts the safety and productivity of our
people. Our employees are trained to recognize and mitigate potential biases towards others.
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 at December 31, 2022:
• in the United States, just over 6% of Senior Managers were female.
• in Australia, almost 30% of employees at a General Manager, Senior Manager and Senior Professional
level were female, an increase of approximately 2% from December 31, 2021.
• 7% of our global workforce was female.
• 58.8% of all employees were between the ages of 30 and 50 years old.
Attracting and retaining the right people
We continued to focus our efforts on recruiting trainees and other entry level roles. We have also implemented
the following initiatives:
• Comprehensive training, performance and leadership development programs.
• Competitive and flexible remuneration structure.
In 2022, our total rolling turnover rate was 16.0% and 16.7% in Australia and the U.S., respectively, and our
voluntary departure rolling turnover rate was 14.5% in both Australia and the U.S. In 2021, our total rolling
turnover rate was 27.9% and 18.4% and our voluntary departure rolling turnover rate was 17.3% and 15.4%, 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
Coronado Global Resources Inc. Form 10-K December 31, 2022 23
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) 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 Mineral
Resources Act 1989 (Qld) 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 Mineral Resources Act 1989
(Qld) 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 Mineral Resources Act 1989 (Qld) imposes general conditions on a ML.
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 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 new tiers applicable in calculating the royalty payable for our Australian Operations from 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 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.
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 Royalty Ruling MRA001.1 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. Where there is a change in legislation or case law that affects the content of a
royalty ruling, the change in the law overrides the royalty ruling—i.e., the Commissioner will determine the royalty
liability in accordance with the changed law. 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 Environment and
Science, or the DES, sources funds to rehabilitate and remediate land subject to mining.
Coronado Global Resources Inc. Form 10-K December 31, 2022 24
Under the Financial Provisioning Act, all mine operators are required to make a submission to the DES in respect
of an Estimated Rehabilitation Cost, or ERC, for the mine site. The ERC is determined using the DES-approved
ERC calculator. Using this information, the DES sets the ERC for the mine. The DES 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. 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. 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) ERC < A$100,000 - cash surety or bank guarantees
2) ERC = A$100,000 – A$450 million - pay a cash contribution into the Scheme
3) ERC > A$450 million - pay a cash contribution into the Scheme and provide bank guarantees.
Curragh has 2 environmental authorities, or EAs, which are covered by the Scheme, namely EA number
EPML00643713 and EA number EPVX00635313. In October 2022, the Scheme Manager completed the
assessment of the Annual Review Allocation for environmental authority 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 2023, the Scheme Manager completed an
assessment of the Annual Review Allocation for Environmental Authority Number 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 Environmental Authority Number EPVX00635313.
The Financial Provisioning Act also requires for a Progressive Rehabilitation and Closure Plan, or a PRCP, with
respect to mined land. This requirement will be 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. The Financial
Provisioning Act provided transitional arrangements for three years for the application of the PRCP requirement
to existing mines. The requirement for a PRCP commenced on November 1, 2019, or the PRCP start date,
however all existing mining operations only transition into the PRCP framework once a transition notice is issued
by the relevant government department. Curragh was issued with a transition notice with respect to its PRCP. Its
application for a proposed PRCP was received by the administering authority on October 20, 2022.
The
administering authority has requested the Company provide further information to assess the application by
August 28, 2023.
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;
Coronado Global Resources Inc. Form 10-K December 31, 2022 25
• depositing proscribed 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.
We hold EA EPML00643713, which authorizes the 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 and watercourse diversion.
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
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.
We have been granted a regional interest development approval for the “Curragh Expansion Project” (for
ML700006, ML 700007 and ML700008), 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 26
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 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;
• 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 27
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 a suite of
related 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, greenhouse gas, or GHG, emissions 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.
In accordance with Safeguard Mechanism under this legislation, Curragh has been a assigned a baseline for its
covered emissions (Scope 1) and we must take steps to keep our emissions at or below the baseline or face
penalties. The Australian federal government is currently reviewing the Safeguard Mechanism and proposed
reforms are under public consultation.
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
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, Australia’s national workplace relations tribunal. See “—
Human Capital Disclosures” above.
Regulatory Matters—United States
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. The summary below is a non-exhaustive summary of material legislation that applies to our
U.S. Operations. Although this summary focuses on federal laws, most states (including Virginia, West Virginia
and Pennsylvania) have their own regulatory schemes that either mirror federal laws 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 bo th directly and indirectly.
Coronado Global Resources Inc. Form 10-K December 31, 2022 28
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 emissions 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, greenhouse gases, 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
coal-burning industries, especially the power generation sector. While the EPA under the Trump Administration
moved toward repealing or loosening some of those regulations, the Biden Administration has moved to restore
some regulations, such as those governing mercury emissions . This is particularly the case for greenhouse gas
emissions from coal-fired electric generating facilities, as President Biden has called for bringing the U.S. power
sector to zero greenhouse gas emissions by 2035. However, in 2022, the United States Supreme Court limited
the ability of EPA to regulate air emissions through “beyond the fence line” regulations. 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 EPA on December 18, 2020. On June 10, 2021, EPA announced that it would
reconsider this decision in light of scientific evidence pointing to health issues caused by exposure to PM. EPA
expects to issue a proposed rule with more stringent standards for PM in Summer 2022 and a final rule in Spring
2023.
In 2015, the EPA issued a final rule reducing the primary ozone NAAQS from 75 to 70 parts per billion but
retaining the existing secondary ozone NAAQS. States with moderate or high nonattainment areas must submit
SIPs for the 2015 ozone NAAQS by October 2021. Environmental and industry groups challenged the 2015
ozone NAAQS in the U.S. Court of Appeals for the D.C. Circuit. On August 23, 2019, the court denied all the
petitions for review against the 2015 primary NAAQS but concluded that the EPA had not provided a sufficient
rationale for its decision on the 2015 secondary NAAQS and remanded that standard to the EPA. Prior to the
court’s decision, EPA initiated another periodic review of the ozone NAAQS. This most recent review culminated
in a final rule by the EPA on December 31, 2020 to retain all aspects of the 2015 ozone NAAQS, including the
secondary standard with additional rationale in response to the court’s 2019 decision. It remains to be seen
whether there will be legal challenges to the December 2020 final rule, or whether the EPA will reconsider the
rule under the new administration. More stringent ozone or PM NAAQS, if promulgated, would require new SIPs
to be developed and filed with the EPA and may trigger additional control technology for mining equipment or
coal-burning facilities, or result in additional challenges to permitting and expansion efforts. This could also be
the case with respect to the implementation of any new requirements triggered by any future, more stringent
NAAQS for nitrogen oxide and SO
2
, although the EPA promulgated a final rule on March 18, 2019 that retains,
without revision, the existing NAAQS for SO
2
Cross State Air Pollution Rule, or CSAPR.
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
Coronado Global Resources Inc. Form 10-K December 31, 2022 29
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.
EPA subsequently published the CSAPR Update Rule in 2016, seeking to impose nitrogen oxide emissions
reductions in 22 upwind states subject to CSAPR. Subsequently, in 2018, EPA published the CSAPR Close-
Out, which found that it would not it would not be feasible to impose cost-effective emissions on twenty upwind
states before 2023, which was two years after the CAA-mandated 2021 deadline for states to bring their areas
of “severe” nonattainment into compliance with the 2008 NAAQS. Both the CSAPR Update Rule and CSAPR
Close-Out were subject to legal challenges and each was ultimately vacated by the United States Court of
Appeals for the D.C. Circuit.
On March 15, 2021, 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, 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, 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. 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.
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. Although the MATS rule has been and continues to be the subject of EPA review and
litigation, it remains in effect and has contributed to the need for many coal-fired power plants to install addition
pollution controls, convert to natural gas, or retire.
Following issuance of the final MATS rule, numerous petitions for review were filed. After proceedings before
the U.S. Court of Appeals for the D.C. Circuit, the U.S. Supreme Court on June 29, 2015 held that EPA interpreted
the CAA unreasonably when it deemed cost irrelevant to the decision to regulate HAPs from new and existing
coal-fueled and oil-fueled power plants. The Supreme Court remanded the case to the D.C. Circuit, which
ultimately allowed the rule to remain in effect while EPA promulgated a series of supplemental findings on the
costs and benefits of the rule in response to the Supreme Court’s ruling.
Most recently, on May 22, 2020, the EPA finalized a supplemental finding, or Supplemental Cost Finding, that
health and environmental benefits not directly related to mercury pollution should not be included in the benefit
portion of the analysis. Using this framework EPA found that the costs of the MATS rule “grossly outweigh” any
possible benefits and, therefore, that that regulating HAPs from coal-fired and oil-fired power plants is not
“appropriate and necessary” under the CAA. However, EPA determined that while it could revise the cost-benefit
analysis for the MATS rule, it could not remove coal-fired plants from HAPs regulation. The MATS rule therefore
remains in effect. EPA also determined in the Supplemental Cost Finding that the MATS rule is adequately
protective of public health, as required by the CAA’s residual risk and technology review provisions.
Westmoreland Mining Holdings, a coal company, filed a petition with the D.C. Circuit in May 2020 challenging
the legality of the MATS rule. Health and medical groups and other industry groups filed a petition of review
opposing the Supplemental Cost Finding, and its reversal of the previous finding that it was “appropriate and
necessary” to regulate HAPs. Environmental groups also challenge the EPA’s residual risk and technology
review of the MATS rule, arguing that more stringent standards are necessary. This litigation remains ongoing.
While the vast majority of coal-fired power producers have already complied with the 2012 MATS rule standards,
any future reductions in the standards due to the ongoing litigation or additional EPA action could increase the
cost of coal-fired electric power generation and negatively impact the demand for coal.
Coronado Global Resources Inc. Form 10-K December 31, 2022 30
Clean Power Plan and Affordable Clean Energy, or ACE
. 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. A final version of the Clean Power Plan was adopted in August 2015. The Clean Power Plan aimed
to reduce carbon dioxide emissions from electrical power generation by 32% by 2030 relative to 2005 levels
through the reduction of emissions from coal-burning power plants and increased use of renewable energy and
energy conservation methods. Under the Clean Power Plan, states were free to reduce emissions by various
means and were to submit emissions reduction plans to the EPA by September 2016 or, with an approved
extension, September 2018. If a state had not submitted a plan by then, the Clean Power Plan authorized the
EPA to impose its own plan on that state. In order to determine a state’s goal, the EPA divided the country into
three regions based on connected regional electricity grids. States were to implement their plans by focusing on
(i) increasing the generation efficiency of existing fossil fuel plants, (ii) substituting lower carbon dioxide emitting
natural gas generation for coal-powered generation and (iii) substituting generation from new zero carbon dioxide
emitting renewable sources for fossil fuel powered generation. States were permitted to use regionally available
low carbon generation sources when substituting for in-state coal generation and to coordinate with other states
to develop multi-state plans.
Following adoption, in 2015 twenty-seven states sued the EPA in the D.C. Circuit, claiming that the EPA
overstepped its legal authority in adopting the Clean Power Plan. In February 2016, the U.S. Supreme Court
ordered the EPA to halt enforcement of the Clean Power Plan until the lower court ruled on the lawsuit and until
the Supreme Court determined whether or not to hear the case.
In a parallel litigation, twenty-five states and other parties filed lawsuits challenging the EPA’s final NSPS rules
for carbon dioxide emissions from new, modified, and reconstructed power plants under the CAA. One of the
primary issues in these lawsuits was the EPA’s establishment of standards of performance based on technologies
including carbon capture and sequestration, or CCS. New coal plants could not meet the new standards unless
they implement CCS. In conjunction with the EPA’s proposal to rescind the Clean Power Plan, the EPA also
requested a stay of the NSPS litigation. The D.C. Circuit granted the request.
In October 2017, the EPA commenced rulemaking proceedings to rescind the Clean Power Plan, and in
December 2017, the EPA published an Advanced Notice of Proposed Rulemaking announcing its intent to
commence a new rulemaking to replace the Clean Power Plan with an alternative framework for regulating carbon
dioxide. The rulemaking would culminate in the EPA replacing the Clean Power Plan with ACE. On September
17, 2019, the U.S. Court of Appeals for the D.C. Circuit dismissed the Clean Power Plan litigation and NSPS
litigation as moot in light of the ACE rule.
On June 19, 2019, the EPA finalized the ACE rule as a replacement for the Clean Power Plan. The ACE rule
establishes emission guidelines for states to develop plans to address greenhouse gas emissions from existing
coal-fired power plants. The ACE rule has several components: a determination of the best system of emission
reduction for greenhouse gas emissions from coal-fired power plants, a list of “candidate technologies” states
can use when developing their plans, and new implementing regulations for emission guidelines under Section
111(d) of the CAA. Unlike the Clean Power Plan, the ACE rule only includes as candidate technologies those
that increase the efficiency of individual emission units, also referred to as heat rate improvement measures; the
ACE rule does not include other methods such as co-firing with natural gas or adding renewable generation
facilities.
Upon finalization of the ACE rule, the rule was subject to a challenge in the D.C. Circuit in American Lung
Association et al. v. EPA, et al. On January 19, 2021, the D.C. Circuit vacated the ACE rule and remanded the
question of the “best system of emission reduction” for carbon dioxide emissions from existing power plants to
EPA for further consideration. In reaching its decision, the court found that ACE would not be the most effective
means of reducing emissions, and further rejected the idea that EPA is limited under the Clean Air Act to only
regulate emissions reductions at the source. On February 22, 2021, the D.C. Circuit Court granted EPA’s motion
to stay issuance of the mandate to repeal until EPA could respond to the remand in a new rulemaking action.
In addition to potential CAA regulatory changes, it is possible that other future international, federal and state
initiatives to control greenhouse gas 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. Future regulation in the United
States could occur pursuant to future treaty commitments, new domestic legislation or regulation by the EPA.
On February 19, 2021, the United States rejoined the international climate agreement reached at the United
Coronado Global Resources Inc. Form 10-K December 31, 2022 31
Nations Framework Convention on Climate Change in Paris, France during December 2015, also known as the
Paris Agreement. President Trump previously withdrew the United States from the Paris Agreement, beginning
a four-year exit process. In an executive order, President Biden directed that federal agencies review recent
actions that the President believes may interfere with the United States’ participation in the Paris Agreement.
While the Paris Agreement sets only voluntary pledges for reducing greenhouse gas emissions, the recent
executive actions signal a shift toward consideration of new or more stringent federal regulations to further reduce
greenhouse gas emissions in the United States. In addition, many states, regions and governmental bodies have
already adopted their own greenhouse gas emission reduction initiatives and have or are considering the
imposition of fees or taxes based on the such emission by certain facilities, including coal-fired electric generating
facilities. Others have announced their intent to increase the use of renewable energy sources, with the goal of
displacing coal and other fossil fuels. Federal legislation along these lines is also a possibility. Depending on
the particular regulatory programs or new laws enacted at the federal and state levels, the demand for coal could
be negatively impacted, which would have an adverse effect on our operations.
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 greenhouse gas 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 greenhouse gas emissions under future laws. In addition, several
permits issued to new coal-fueled power plants without greenhouse gas 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 United States 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
United States 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.
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. States were required to submit Regional Haze SIPs to the EPA in 2007; however, many states
did not meet that deadline. In 2016, the EPA finalized revisions to the Regional Haze Rule which addresses
requirements for the second planning period. In September 2019, the EPA issued final regional haze guidance
that indicates that a re-evaluation of sources already subject to best available retrofit technologies is likely
unnecessary. The guidance also encourages states to balance visibility benefits against other factors in selecting
the measures necessary to make “reasonable progress” toward natural visibility conditions. Finally, when
comparing various control options to determine which ones may be “cost-effective”, the final guidance
recommends comparing cost to visibility benefits. SIPs were required by July 31, 2021. On August 30, 2022 EPA
issued a final action finding that 15 states had failed to meet the July 31, 2021 deadline. Such failure triggers a
two year deadline for EPA to promulgate a Federal Implementation Plan unless the states submits and 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 32
The remaining litigation and uncertainty around the NSR program rules could impact demand for coal. In recent
years, EPA proposed and promulgated several revisions to its NSR regulations and policies concerning NSR
permitting. For example, one such change, known as the Project Emissions Accounting Rule on October 22,
2020, revises the NSR regulations to clarify that recent emission decreases can be considered in part of the NSR
applicability test. In addition, the EPA on November 14, 2018 issued a final rule that clarified the appropriate test
for determining whether two nominally separate modifications to existing facilities should be considered in a single
NSR applicability analysis. While these changes have the potential to reduce NSR permitting burdens for coal-
fired power plants and other coal-burning facilities, the Biden Administration has reversed some policies adopted
by the Trump Administration and may seek to tighten NSR regulations and guidance.
Coke Ovens.
categories regulated by the CAA. The initial technology-based standards for Coke Oven Batteries were
promulgated by EPA in 1993. In 2003, EPA issued technology-based standards for Coke Ovens: Pushing,
Quenching, and Battery Stacks. In 2005, EPA revised the technology -based standards and issued risk-based
standards following a residual risk review. On June 26, 2020, the United States District Court for the Northern
District of California found EPA had violated its statutory duty to perform a technology review of its initial
technology-based standards for Coke Ovens: Pushing, Quenching, and Battery Stacks and a residual risk review
of those standards. The court also found that EPA had violated its statutory duty to conduct a follow-up technology
review and second residual risk review of the standards for Coke Oven Batteries. The court held that EPA has
30 months to comply with its statutory duty for these two source categories. To the extent that EPA ultimately
promulgates more stringent technology-based standards as a result of the court-ordered technology and residual
risk reviews, it could affect our current and prospective customers and may affect long-term demand for coal.
On January 21, 2021, President Biden issued an executive order that ordered the review of certain environmental
regulations promulgat ed under the Trump administration. Those environmental regulations include ozone and
particulate matter NAAQS, the ACE rule, and other air emission rules potentially affecting coal-fired power plants
and other coal-burning facilities. It is unclear what affect this order will have on the 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 United States. CWA requirements may directly or indirectly affect U.S.
coal mining operations.
Water Discharge.
on discharges of wastewater into waters of the United States 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.
Dredge and Fill Permits.
impoundments, refuse fills, and other similar structures, may result in impacts to waters of the United States,
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
United States, 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 United States,
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
Coronado Global Resources Inc. Form 10-K December 31, 2022 33
proposed mining activities. The USACE may also issue individual permits for mining activities that do not qualify
for Nationwide Permit 21.
The CWR/Navigable Waters Protection, or NWPR. Recent regulatory actions and court decisions have created
some uncertainty over the scope of CWA jurisdiction. On June 29, 2015, the EPA and the USACE jointly
promulgated final rules, collectively known as the Clean Water Rule, or the CWR, redefining the scope of waters
protected under the CWA, revising regulations that had been in place for more than 25 years. These rules
expanded the scope of CWA jurisdiction, making discharges into more bodies of water subject to the CWA’s
permitting and other requirements. Following the CWR’s promulgation, numerous industry groups, states, and
environmental groups challenged the CWR. On October 9, 2015, the U.S. Court of Appeals for the Sixth Circuit
stayed the CWR’s implementation nationwide, pending further action in court. Further, on February 28, 2017,
President Trump signed an executive order directing the relevant executive agencies to review the CWR, and on
July 27, 2017, the EPA and the USACE published a proposed rule to rescind the CWR. On January 22, 2018,
the Supreme Court reversed the Sixth Circuit’s decision, ruling that jurisdiction over challenges to the CWR rests
with the federal district courts and not with the appellate courts, which was followed by the dissolution of the stay
by the Sixth Circuit, and on February 6, 2018, in response to the January 2018 Supreme Court decision, the EPA
and USACE published a final rule to postpone the adoption of CWR and maintain the status quo (the pre 2015
rule) through February 6, 2020 pending the agencies’ review of the CWR. Multiple states and environmental
groups have filed challenges to this delay. On August 16, 2018, the federal court in South Carolina enjoined the
February 6, 2018 rule, effectively reinstating the CWR in Virginia and Pennsylvania (where we have operations)
and in 24 other states.
On April 21, 2020, the EPA and the USACE published the Navigable Waters Protection Rules, or the NWPR.
The NWPR revises the definition of waters of the United States, replacing the CWR. The NWPR shrinks the
agencies’ jurisdiction, particularly as it relates to tributaries and adjacent waters. The NWPR went into effect on
June 22, 2020. The NWPR was enjoined in Colorado, but this decision was overturned by the Tenth Circuit Court
of Appeals. On January 18, 2023, the EPA and the USACE published a final rule redefining “waters of the United
States.” The new definition reflects certain aspects of the pre-2015 definition as well as consideration of recent
Supreme Court decisions. It enlarges the agencies’ jurisdiction over waters as compared to the NWPR.
On April 22, 2020, in an unrelated case the Supreme Court ruled that provisions of the CWA require an NPDES
permit when there is a direct discharge from a point source to navigable waters or the functionally equivalent
discharge to groundwater. The NWPR, however, had excluded groundwater from the agencies’ jurisdiction. On
January 21, 2021, EPA issued guidance applying the ruling of the Supreme Court to the NPDES permitting
program. Under the Biden Administration, the EPA rescinded this guidance memorandum, thus eliminating a
new factor that likely would have reduced clean water protections.
On January 24, 2022, the United States Supreme Court agreed to hear a case that could undermine key
provisions of the January 18, 2023 final rule. A decision is expected by June 2023. Litigation of the definition of
waters of the United States is likely to continue. Uncertainty surrounding the definition of waters of the United
States remains, including what impact it 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 April
12, 2019, the U.S. Court of Appeals for the Fifth Circuit agreed with environmental groups that the portions of the
rule regulating legacy wastewater and residual combustion leachate are unlawful and vacated those portions of
the rule.
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. With respect to BA, the EPA, among other things, eliminated a
strict no-discharge requirement and implemented a not-to-exceed ten-percent volumetric purge. We cannot at
this time predict how this rule will be enforced by the new Biden administration or if it will seek a revision.
Coronado Global Resources Inc. Form 10-K December 31, 2022 34
The Biden Administration’s January 20, 2021 executive order for review of environmental regulations indicated
the Biden Administration would review the NWPR amongst other CWA-related regulations.
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 United States.
Unlike the CAA and the CWA, SMCRA is primarily concerned with the holistic regulation of coal mining as an
industry. Its general environmental standards require surface operations to mine in such a way as to “maximize
the utilization and conservation” of coal while using the best technology currently available to minimize land
disturbance and adverse impacts on wildlife, fish, and environmental values. SMCRA requires operators to
accomplish these goals by restoring the land to its approximate pre-mining condition and contour.
The SMCRA implements its environmental standards through “cooperative federalism.” 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.
If a state has a surface mining regulatory scheme that is less stringent than the surface mining standards under
SMCRA and OSM regulations, or if mining on federal lands is involved, the OSM will impose federal regulations
on surface mining in that state. Each of Virginia, West Virginia and Pennsylvania, where our Buchanan, Logan,
Greenbrier 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);
• 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).
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.
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. Ownership and control reporting
requirements are designed to allow regulatory review of any entities or persons deemed to have ownership or
control of a coal mine, and bar the granting of a coal mining permit to any such entity or person (including any
“owner and controller”) who has had a mining permit revoked or suspended, or a bond or similar security forfeited
within the five-year period preceding a permit application or application for a permit revision. Similarly, regulatory
agencies also block the issuance of permits to applicants, their owners or their controlling persons, who have
outstanding permit violations that have not been timely abated.
Coronado Global Resources Inc. Form 10-K December 31, 2022 35
These regulations define certain relationships, such as owning over 50% of stock in an entity or having the
authority to determine the manner in which the entity conducts mining operations, as constituting ownership and
control. Certain other relationships are presumed to constitute ownership or control, including among others, the
following:
• being an officer or director of an entity;
• being the operator of the coal mining operation;
• having the ability to commit the financial or real property assets or working resources of the permittee or
operator; and
• owning of record 10% or more of the mining operator.
This presumption, in some cases, can be rebutted where the person or entity can demonstrate that it in fact does
not or did not have authority directly or indirectly to determine the manner in which the relevant coal mining
operation is conducted.
We must file an ownership and control notice each time an entity obtains a 10% or greater interest in us. If we or
entities or persons deemed to have ownership of control of us have unabated violations of SMCRA or its state
law counterparts, have a coal mining permit suspended or revoked, or forfeit a reclamation bond, we and our
owners and controllers may be prohibited from obtaining new coal mining permits, or amendments to existing
permits, until such violations or other matters are corrected. This is known as being “permit-blocked.” Additionally,
if an owner or controller of us is deemed an owner or controller of other mining companies, we could be
permit-blocked based upon the violations of, or permit-blocked status of, an owner or controller of such other
mining companies. If our owner or controller were to become permit blocked, this could adversely affect
production from our properties.
In recent years, the permitting required for coal mining has been 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. Public notice of the proposed permit is given for a comment period before a permit can be issued.
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. Monetary sanctions and, in certain circumstances, even criminal sanctions may be
imposed for failure to comply with the SMCRA permits. 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. A surety bond is
an indemnity agreement in a sum certain payable to the regulatory authority, executed by the permittee as
principal and which is supported by the performance guarantee of a surety corporation. A collateral bond can
take several forms, including cash, letters of credit, first lien security interest in property or other qualifying
investment securities. A self-bond is an indemnity agreement in a sum certain executed by the permittee or by
the permittee and any corporate guarantor made payable to the regulatory authority. 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 approximately $28.5
million
as of December 31, 2022. 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 United States. 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. Pursuant to the Tax Relief
and Health Care Act of 2006, from October 1, 2012 through September 30, 2021, the fee is $0.31 and $0.13 per
Mt of surface-mined and underground-mined coal, respectively. See Item 2. “Properties” for information regarding
reclamation and other taxes applicable to our U.S. mining properties.
Coronado Global Resources Inc. Form 10-K December 31, 2022 36
While SMCRA is a comprehensive statute, SMCRA does not supersede the need for compliance with other major
environmental statutes, including the Endangered Species Act of 1973, or the ESA, CAA, CWA, the Resource
Conservation and Recovery Act of 1976, or the RCRA, and the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, or CERCLA.
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 requires federal agencies to evaluate the environmental impact of all “major
federal actions” significantly affecting the quality of the human environment. 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. NEPA also defines the
processes for evaluating and communicating environmental consequences of federal decisions and actions, such
as the permitting of new mine development on federal lands. U.S. coal mining companies must provide
information to agencies with respect to proposed actions that will be under the authority of the federal
government. The NEPA process involves public participation and can involve lengthy timeframes. Ultimately,
federal agencies may require mitigation measures pursuant to their NEPA review.
On July 16, 2020, the White House Council on Environmental Quality, or the CEQ finalized a proposed rule,
which went into effect on September 14, 2020. The new rule made it easier to obtain approval for new projects,
including by eliminating the need to evaluate so-called cumulative impacts which could ultimately limit agencies’
consideration of climate change and greenhouse gas emissions. However, pursuant to Executive Order 13990,
CEQ began a comprehensive review of the 2020 rule and announced a phased approach to amending NEPA
regulations. An Interim Final Rule was issued June 29, 2021 which extended the deadline for Federal agencies
to develop or update their NEPA implementing procedures to conform to the CEQ regulations by two years.
Solid Waste Disposal Act of 1995 and Resource Conservation and Recovery Act of 1976
The Solid Waste Disposal Act of 1965, or SWDA, was the first federal act to target waste disposal technology.
The SWDA governs disposal of both municipal and industrial waste, promotes advancement of waste
management technology and sets waste management standards. The SWDA was amended by the Resource
Conservation and Recovery Act of 1976, or RCRA. 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. The 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
improperly disposed hazardous wastes. The RCRA also sets forth a framework for managing certain non-
hazardous solid wastes. Part or all of the RCRA program may be delegated to a state pursuant to a state
implementation plan if the state standards are at least as stringent as federal standards.
Subtitle C of the RCRA exempted fossil fuel combustion wastes from hazardous waste regulation until the EPA
completed a report to Congress and made a determination on whether the wastes should be regulated as
hazardous. On December 19, 2014, the EPA announced the final rule on disposal of coal combustion residuals,
or CCR or coal ash, by electric utilities and independent power producers. As finalized, the rule continues the
exemption of CCR from regulation as a hazardous waste, but does impose new requirements at existing CCR
surface impoundments and landfills that will need to be implemented over a number of different time-frames in
the coming months and years, as well as at new surface impoundments and landfills. 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
in response to some aspects of the court’s ruling, primarily to regulate unlined ponds but extend certain deadlines
for initiating their closure, and allowing site-specific alternate liner determinations.
The Biden Administration’s January 20, 2021 executive order for review of environmental regulations indicated
that the Biden Administration will review environmental regulations affecting the management and disposal of
CCR. On January 11, 2022, the EPA announced that it was taking steps to protect groundwater from coal ash
contamination, including plans to finalize a federal permitting program for the disposal of coal ash and establishing
regulations for legacy coal ash surface impoundments. We cannot predict at this time if and/or when such rules
will go into effect.
Coronado Global Resources Inc. Form 10-K December 31, 2022 37
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 Office of Surface Mining Reclamation and Enforcement or "OSMRE." After
proposing CCR regulations in 2007, the OSMRE suspended all rulemaking actions on CCRs, but could re-initiate
them in the future. In addition, while many mining wastes such as overburden and coal cleaning wastes are
exempt from RCRA hazardous waste regulations, certain wastes may be subject to the RCRA’s requirements.
The RCRA also governs underground storage tanks containing hazardous substances and petroleum products,
which are used in some coal mining operations, although we do not have underground storage tanks associated
with our U.S. Operations.
The Biden Administration’s January 20, 2021 executive order for review of environmental regulations indicated
that the Biden Administration will review environmental regulations affecting the management and disposal of
CCR. It is unclear what effect this order will have on the demand for coal.
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
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. In addition, CERCLA authorizes the federal government to order PRPs to conduct investigation and
cleanup of releases of hazardous substances at certain contaminated sites.
CERCLA requires that a list of contaminated sites, referred to as the National Priorities List, be compiled by EPA
using certain criteria to evaluate the potential relative risk to the public health and the environment from releases
or threatened releases of hazardous substances. Strict, joint and several and retroactive liability may be imposed
on hazardous substance generators and facility owners and operators, regardless of fault or the legality of the
original disposal activity. The failure to comply with a federal government order under CERCLA may result in civil
penalties, including fines and/or punitive damages, in addition to the costs incurred by the federal government
due to the party’s failure to comply with an order.
We could face liability under CERCLA and similar state laws for 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 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 United States, 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. Various states also have enacted their own new laws and regulations
addressing many of these same subjects. 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
Coronado Global Resources Inc. Form 10-K December 31, 2022 38
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. In the last several years, MSHA has also proposed regulations governing respirable silica, and the
exposure of miners to underground diesel exhaust fumes, and testing, evaluation, and approval of electric motor-
driven mine equipment and accessories. MSHA has issued guidance for employers and workers regarding how
to mitigate the risks of COVID-19 rather than mandatory standards. During a September 29, 2021 stakeholder
call, MSHA leadership indicated that it would not issue an Emergency Temporary Standard requiring COVID-19
vaccinations or testing at mine sites.
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
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, of up to $1.21 per Mt for
deep-mined coal and up to $0.61 per Mt for surface-mined coal, each limited to 4.4% of the gross sales price. In
2019, these tax rates were cut in half compared to the pre-2019 level, falling to $0.61 per Mt of
underground-mined coal or $0.31 per Mt of surface-mined coal, limited to 2% of the sales price. Our total excise
taxes paid to this trust fund in 2020 were $0.9 million. In December 2019, President Trump signed into law a
provision that restored the rate to its pre-2019 level through December 31, 2020. On December 27, 2020, then-
President Trump extended the trust fund excise tax through December 31, 2021 at the pre-2019 rate. 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 20
to the accompanying audited Consolidated Financial Statements for further
information of applicable insurance coverage.
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 United States, 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, recent
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.
Patient Protection and Affordable Care Act of 2010
The United States Patient Protection and Affordable Care Act, or the Affordable Care Act, was enacted in March
2010 and included substantial reforms to the U.S. health care system intended to increase affordability of health
insurance, expand the Medicaid program and support innovative health care delivery methods designed to lower
costs. The Affordable Care Act included a number of provisions designed to reduce Medicare expenditures and
the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage.
For example, the law prohibits insurers from refusing to cover preexisting conditions, requires coverage for certain
Coronado Global Resources Inc. Form 10-K December 31, 2022 39
types of care, and can subject certain large employers to a shared responsibility payment if they do not offer
health coverage to their full-time employees. The Affordable Care Act also created government-run, taxpayer-
funded health insurance marketplaces (known as “Exchanges”).
The Affordable Care Act impacts the coal mining industry’s costs of providing health care benefits to its eligible
active employees, with both short term and long term implications. It affects health care costs by, among other
things, setting the maximum age for covered dependents to receive benefits at 26, requiring certain benefits for
occupational disease related illnesses, and eliminating lifetime dollar limits on essential benefits per covered
individual and restrictions on annual dollar limits on essential benefits per covered individual. The Affordable Care
Act also included significant changes to the federal black lung program, including an automatic survivor benefit
paid upon death of a miner with an awarded black lung claim and the establishment of 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. The Affordable Care Act also provides lifetime benefits to certain dependents
who survive the death of a miner, if the miner had been receiving the benefits before death. For additional
information, please see above “––Black Lung (Coal Worker’s Pneumoconiosis).”
The Affordable Care Act has faced ongoing legal challenges, including litigation and legislation seeking to
invalidate or modify some or all of the law or the manner in which it has been implemented. For example, the
Further Consolidated Appropriations Act of 2020 repealed the “Cadillac tax,” which would have imposed a 40%
tax on high-cost employer plans starting in 2022. The constitutionality of the individual mandate, and the entire
Affordable Care Act, was challenged in the Fifth Circuit Court of Appeals, and is currently under review by the
Supreme Court. The outcome of these cases is uncertain, and any change they make to the Affordable Care Act
could have a significant impact on the U.S. health care industry and employers providing health coverage to their
workers. Further, the fact that implementation of certain aspects of the Affordable Care Act can be affected by
Executive Orders and regulations promulgated by federal governmental agencies that may change when a new
President takes office also contributes to the uncertainty as to how the law will affect the U.S. health care industry
and employers providing health coverage to their workers .
Safe Drinking Water Act of 1974
The Safe Drinking Water Act of 1974, or SDWA, is the federal law that protects public drinking water supplies
throughout the United States. Under the SDWA, the EPA sets federal health-based standards for drinking water
quality and implements technical and financial programs to ensure drinking water safety. The SDWA requires
regular monitoring and reporting of water quality. The SDWA is applicable to public water systems that have at
least 15 service connections or serve at least 25 people per day for 60 days of the year. Further, SDWA standards
apply to water systems based on their type and size. There are four categories: i) community water systems, ii)
non-community water systems, iii) non-transient, non-community water systems and iv) transient non-community
water systems.
The SDWA requires the EPA to establish National Primary Drinking Water Regulations for contaminants that
may cause adverse public health effects. These regulations include mandatory requirements and non-
enforceable health goals. The EPA sets regulations for drinking water system concentrations of certain organic
contaminants, inorganic contaminants, microbiological contaminants, disinfection byproducts, residual
disinfectant levels, and radionuclide levels. The EPA also sets filtration requirements for drinking water systems
that vary depending on the size of the population served by the system.
The SDWA also regulates the underground injection of fluids into porous formations or rocks through wells and
similar conveyance systems, and regulates the construction, operation, permitting and closure of such wells.
The SDWA can impact coal mining operations in the United States to the extent that the operations could impact
drinking water supplies.
National Historic Preservation Act of 1966
The National Historic Preservation Act of 1966, or NHPA, governs the preservation of historical properties
throughout the United States. The NHPA requires the Department of the Interior’s National Park Service to
implement the national policy to preserve for public use historic sites, buildings and objects of national
significance for the inspiration and benefit of the people of the United States. Alternatively, a state may carry out
this program with oversight from the Department of the Interior if the Department of the Interior approves the
Coronado Global Resources Inc. Form 10-K December 31, 2022 40
state’s historic preservation program. In executing this policy, the National Park Service identifies National
Historic Landmarks and places them on a National Register of Historic Places. The NHPA requires that each
federal agency prior to authorizing expenditure of federal funds on a federal or federally assisted undertaking, or
prior to issuing a federal license for such an undertaking, consider the effect of the undertaking on historic
resources and to provide the Advisory Council on Historic Preservation with a reasonable opportunity to comment
on the undertaking. Accordingly, the NHPA could create an additional level of scrutiny on a coal mining operation,
particularly during the permitting process, to the extent that a mining operation could come within the scope of a
historical site. The SMCRA also provides protection for historic resources that would be adversely affected by
mining operations by requiring the OSM to comply with the NHPA. If a property is listed on the National Register
of Historic Places, SMCRA requires consideration of the property’s historic values in determining issuance of a
surface coal mining permit.
Endangered Species Act of 1973
The Endangered Species Act of 1973, or ESA, governs the protection of endangered species in the United States
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. Under the ESA,
the responsibilities of these agencies include listing and delisting species, designating critical habitats, developing
recovery plans and conducting five-year reviews of listed species.
The Fish and Wildlife Service studies projects for possible effects to endangered species and then can
recommend alternatives or mitigation measures. The OSM and state regulators require mining companies to hire
a government-approved contractor to conduct surveys for potential endangered species, and the surveys require
approval from state and federal biologists who provide guidance on how to minimize mines’ potential effects on
endangered species. Certain endangered species are more typically at issue under the ESA with respect to
mining, including the long-eared bat and Guyandotte crayfish, which are found in the Central Appalachian region,
including parts of Virginia and West Virginia. Mitigation methods can cause increased costs to coal mining
operators. Changes in listings or requirements under these regulations could have a material adverse effect on
our costs or our ability to mine some of our properties in accordance with our current mining plans. The ESA
allows landowners to receive a special permit to take listed species in some circumstances, provided they have
developed a Habitat Conservation Plan approved by the Fish and Wildlife Service.
The U.S. Department of the Interior issued three proposed rules in July 2018 aiming to streamline and update
the ESA, and they became effective on September 26, 2019. The rules weaken the protections afforded species
listed as threatened, and make it more difficult to add species to the threatened and endangered species lists
and easier to delist species. However, on June 4, 2021, the Fish and Wildlife Service and the National Oceanic
and Atmospheric Administration's National Marine Fisheries Service announced a plan to strengthen the ESA
and revise or rescind regulations passed under the Trump Administration.
Migratory Bird Treaty Act of 1918
The Migratory Bird Treaty Act of 1918, or MBTA, as modified by the Migratory Bird Treaty Reform Act of 2004,
makes it unlawful without a waiver to pursue, hunt, take, capture, kill or sell migratory birds, or any part, nest or
egg of any migratory bird. A migratory bird species is included on the list of species protected by the MBTA if it
meets one or more of the following criteria: i) it occurs in the United States or U.S. territories as the result of
natural biological or ecological processes and is currently, or was previously listed as, a species or part of a family
protected by certain international treaties, or their amendments, entered into by the United States and Canada,
Mexico, Japan or Russia; ii) revised taxonomy results in it being split from a species that was previously on the
list, and the new species occurs in the United States or U.S. territories as the result of natural biological or
ecological processes; or iii) new evidence exists for its natural occurrence in the United States or U.S. territories
resulting from natural distributional changes and the species occurs in a protected family. The Migratory Bird
Treaty Reform Act of 2004 requires the Fish and Wildlife Service to publish an informational list of all nonnative,
human-introduced bird species to which MBTA does not apply. The most recent list of all nonnative, human-
introduced bird species was published on April 16, 2020.
Since coal mining is seen as an industry that can threaten bird populations, coal operators are required to ensure
that their operations do not negatively impact migratory birds, or to take mitigation measures. Violations of the
Coronado Global Resources Inc. Form 10-K December 31, 2022 41
MBTA are either misdemeanor or felonies punishable by a fine or imprisonment. Efforts in 2020 and 2021 to
narrow the applicability of the MBTA were unsuccessful.
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
addition to ATF regulation, the U.S. Department of Homeland Security is evaluating a proposed ammonium nitrate
security program rule. In 2015, the OSM also proposed a rulemaking addressing nitrogen oxide clouds from
blasting; on July 30, 2019, however, the OSM withdrew the proposed rulemaking.
Available Information
We file annual, quarterly and current reports and other documents with the SEC under the Exchange Act. 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.au/. 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, 2022 42
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 that we face. 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.
Some of these risks 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 significantly affect demand for our products or our securities and reduce access to capital and
insurance;
•
Demand for our Met coal is significantly dependent on the steel industry
;
•
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 ;
•
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;
•
Our business may be adversely affected by the impact on the global economy due to, among other events,
the ongoing military conflict between Russia and Ukraine or other significant geopolitical tensions
;
•
Our business, financial condition and results of operations may be adversely impacted by global pandemics,
including the COVID-19 pandemic, or other widespread public health concerns
;
•
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 face increasing competition, which could adversely affect profitability;
•
We may face restricted access to international markets in the future
;
•
If transportation for our coal becomes unavailable or uneconomic 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;
•
We may be unable to obtain, renew or maintain permits necessary for our operations, which would reduce
coal production, cash flows and profitability;
•
A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity
;
•
The existence (or claimed existence) of native title on land within our Australian tenements may impose
restrictions on the construction of our expansion activities and our continued operations;
•
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
;
Coronado Global Resources Inc. Form 10-K December 31, 2022 43
•
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 attacks, natural disasters, terrorist attacks and other similar crises or disruptions may
negatively affect our business, financial condition and results of operations;
•
Mining in the CAPP is more complex and involves more regulatory constraints than mining in other areas of
the U.S., which could affect our mining operations and cost structures in these areas;
•
The loss of, or significant reduction in, purchases by our largest customers could adversely affect our
revenues;
•
If a substantial number of our customers fail to perform under our contracts with them, our revenues and
operating profits could suffer;
•
If our ability to collect payments from customers is impaired, our revenues and operating profits could suffer;
•
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 $100.0 million,
or the ABL Facility (more fully discussed in the Management Discussion & Analysis Section at Item 7.
“Liquidity and Capital Resources), 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 affected adversely;
•
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 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;
Coronado Global Resources Inc. Form 10-K December 31, 2022 44
Environmental and 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 significantly affect demand for our products or our securities and reduce
access to capital and insurance.
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 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 and limit emissions of GHGs. In November 2014, an
agreement was announced between the United States and China to cut GHGs by more than 25% below 2005
levels by 2025. This agreement was followed by the UNFCCC, conference in Paris, France, in which an
agreement was adopted calling for voluntary emissions reductions contributions, or the Paris Agreement. The
Paris Agreement was entered into force on November 4, 2016 after ratification and execution by more than 55
countries, which account for at least 55% of global GHG emissions. The Paris Agreement was signed by
representatives from 195 countries and aims to hold back the increase in global temperatures, increase the ability
of countries to adapt to the adverse impacts of climate change and provide channels to finance projects that lead
to GHG reductions.
On November 20, 2022, the Sharm el-Sheik Conference of Parties 27, or COP27, continued discussions around
fossil fuels from Glasgow Conference of Parties 26, which called on governments to accelerate the dissemination
of technologies, and the adoption of policies, to transition toward a low-emission energy system, including by
accelerating the phasedown of unabated coal power, that is coal power that does not include the capture and
storage of carbon dioxide emission and phase-out of inefficient fossil fuel subsidies.
In addition, the growth of alternative energy options, such as renewables and disruptive power generation
technologies, changes in community or government attitudes to climate change, government measures to
subsidize renewable energy production while reducing subsidies for the fossil fuel industry, efforts to promote
divestment of fossil fuel equities and pressure from lenders to limit funding to fossil fuel companies could result
in further development of alternative energy industries and broader mainstream acceptance of alternative energy
options which could result in a material reduction in the demand for coal. It could also result in reduced access
to capital to fund our activities as lenders and investors divert capital to low emission sectors of the economy.
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. 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 in turn
adversely impact our business.
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, or if our ability to obtain capital for operations is materially reduced.
Coronado Global Resources Inc. Form 10-K December 31, 2022 45
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 reduced 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.”
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 blast furnaces 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
blast furnace 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 blast furnace 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. 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.
Additionally, tariffs imposed by the United States on the import of certain steel products may impact foreign steel
producers to the extent their production is imported into the United States. Future tariffs could further reduce
imports of steel and increase U.S. Met coal demand. This additional U.S. Met coal demand could be met by
reducing exports of Met coal and redirecting that volume to domestic consumption.
The tariffs established by the United States have prompted retaliatory tariffs from key trading partners, notably
Europe and China. Any further retaliatory tariffs by these or other countries to these tariffs may limit international
trade and adversely impact global economic conditions. We cannot ascertain the impact, if any, that similar tariffs
may have on demand for our Met coal. See “—We may face restricted access to international markets in the
future.”
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. If further serious safety
incidents were to 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 an
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.”
Coronado Global Resources Inc. Form 10-K December 31, 2022 46
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.
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 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. We have purchased the required water allocations for Curragh and entered into
a suite of related channel and pipeline infrastructure agreements and river supply agreements with SunWater Ltd
to regulate the supply of water pursuant to these allocations.
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 was reduced, the 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 operations and production.
Decreases in demand for coal-fired electricity and changes in thermal coal consumption patterns of the
United States and Australian electric power generators could adversely affect our business.
In addition to Met coal, our Australian Operations and U.S. Operations produce some thermal coal. Sales of
thermal coal represented 34.7%
of tons sold and 5.3%
of the total revenues of our Australian Operations for the
year ended December 31, 2022. The majority of the thermal coal produced by our Australian Operations is sold
on a long-term supply arrangement to Stanwell. Sales of thermal coal by our Australian Operations to domestic
and export buyers are exposed to fluctuations in the global demand for thermal coal or electricity. However, coal
sold to Stanwell is not directly exposed to fluctuations in the global demand for electricity or thermal coal. Under
the Stanwell supply contract, Stanwell can set volumes, and pricing is set at significantly below-market rates. Our
cost of supplying coal to Stanwell has been and may continue to be greater than the price paid by Stanwell. See
“—Risks related to the Supply Deed with Stanwell may adversely affect our financial condition and results of
operations.”
Coronado Global Resources Inc. Form 10-K December 31, 2022 47
For the year ended December 31, 2022, sales of thermal coal represented 4.3% of tons sold and 3.7% of the
total revenues our U.S. Operations for the year ended December 31, 2022. As such, any changes in coal
consumption by electric power generators in the United States could impact our business over the long term.
While power generation from thermal coal remains a cost-effective form of energy, the increasing focus on
renewable energy generation, competition from alternative fuel sources, such as natural gas, environmental
regulations and the consequential decline in electricity generation from fossil fuels, is expected to result in the
further decline of coal-fired electricity generation due to retirement of coal-fired capacity in favor of alternative
energy. The low price of natural gas has resulted in some U.S. electric power generators increasing natural gas
consumption while decreasing coal consumption.
Further reductions in the demand for coal-fired electricity generation and the growth of alternative energy options,
such as renewables, and alternate power generation technologies, as well as any reduction in demand for
electricity could materially reduce the demand for thermal coal, which may have a material adverse effect on our
financial condition and results of operations.
Economic, Competitive and Industry Risks
Our business may be adversely affected by the impact on the global economy due to, among other
events, the ongoing military conflict between Russia and Ukraine or other significant geopolitical
tensions.
Global markets are experiencing volatility and disruption following the geopolitical tensions and the military
invasion of Ukraine by Russia. This military conflict has led to, and may lead to additional, sanctions and other
penalties being levied by the United States, the European Union and other countries against Russia, Belarus,
the Crimea Region of Ukraine and the two separatist republics in the Donetsk and Luhansk regions of Ukraine,
including expansive bans on imports and exports of products to and from Russia.
We are unable to predict the extent and duration of the ongoing military conflict, which could lead to further market
disruptions, including significant volatility in commodity prices, including the coal we sell and 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. Further, sanctions, and any other measures, as well as the existing
and potential further responses from Russia or other countries to such sanctions, could adversely affect the global
economy and financial markets, which could in turn have an adverse impact on our financial condition and results
of operations or heighten other risks described in this Item 1A, “Risk Factors”.
Our business, financial condition and results of operations may be adversely impacted by global
pandemics, including the COVID-19 pandemic, or other widespread public health concerns.
Global pandemics, including the COVID-19 pandemic, or other widespread public health concerns could have an
adverse effect on our business, financial condition and results of operations.
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 restrictions could cause disruptions to mining operations, manufacturing operations and supply chains
around the world.
The extent and duration of the impact that global pandemics, including the COVID-19 pandemic, and other public
health concerns could have in our business and results of operations will depend on numerous factors out of our
control that we may not be able to accurately predict and could also heighten other risks described in this “Item
1A. Risk Factors” section, which could have a material adverse impact in our business and results of operations.
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 in North America 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 48
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;
• 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;
• weather conditions in our markets that affect the 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 the COVID-19 pandemic.
Met coal has been a volatile commodity over the past ten years. Recently, in the second quarter of 2022,
seaborne prices reached record levels with both the Australian and U.S. Met coal price indices exceeding $600
per Mt, largely as result of supply concerns in key Met coal markets and continued trade flow disruptions due to
sanctions imposed on Russia’s coal imports following Russian invasion of Ukraine. 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.
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, 2022 49
The consolidation of the global Met coal industry in recent years 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.
We may face restricted access to international markets in the future.
Access to international markets may be subject to ongoing interruptions and trade barriers due to policies and
tariffs of individual countries, and the actions of certain interest groups to restrict the import or export of certain
commodities. For example, the current imposition of tariffs and import quota restrictions by China on U.S. and
Australian coal imports respectively, including the ongoing suspension of imports of Australian coal into China,
may in the future have a negative impact on our profitability. The timing of any change to these measures remains
uncertain, and there can be no guarantee that other tariffs, import quota restrictions, bans or other trade barriers
will not be imposed (whether as a result of geopolitical tensions or for other reasons), either by China or in other
markets for our products. We may or may not be able to access alternate markets for our coal should additional
interruptions and trade barriers occur in the future. An inability for Met coal suppliers to access international
markets, including China, would likely 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.
If transportation for our coal becomes unavailable or uneconomic 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. 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, including the COVID-19 pandemic,
or other events.
Coronado Global Resources Inc. Form 10-K December 31, 2022 50
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.
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).
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 Limited and Pacific National Pty Ltd, to and export from the Port of
Gladstone via two main port terminals, RGTCT and WICET. At our U.S. Operations, we also have a take-or-pay
agreement in connection with the Kinder Morgan Pier IX Terminal in Hampton Roads, Virginia. 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, 2022.
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 increased significantly, or if a source
for these supplies or mining equipment was unavailable to meet our replacement demands, including as a result
of the COVID-19 pandemic or otherwise, our profitability could be reduced or we could experience a delay or halt
in our production.
Coronado Global Resources Inc. Form 10-K December 31, 2022 51
Prices for equipment, materials, supplies and employee labor contractor services increased during 2022, and
could continue to increase in 2023 and beyond. 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.
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 52
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 SMCRA, require that certain environmental standards be met before
a permit is issued. The public, including non-governmental organizations, anti-mining 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. In recent years, the permitting required for coal mining has
been 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 addition, in 2015, the EPA and the USACE issued the CWR, under the CWA
that would further expand the circumstances when a Section 404 permit is needed. The CWR is the subject of
extensive ongoing litigation and administrative proceedings, as a result of which the CWR has been enjoined in
certain states (including West Virginia) and reinstated in others (including Virginia and Pennsylvania), and its
current and future impact on our operations are the subject of significant uncertainty. On April 21, 2020, the EPA
and the USACE published the NWPR, replacing the CWR. The NWPR revises the definition of waters of the
United States and replaces the CWR. The NWPR shrinks the agencies’ jurisdiction, particularly as it relates to
tributaries and adjacent waters, such as wetlands, that were previously covered by the definition under the CWR.
The NWPR went into effect on June 22, 2020. States and environmental groups have filed challenges to the
NWPR in various federal district courts. We cannot at this time predict how this rule will be enforced in the future.
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 2017 nationwide permit program was recently
reissued in January 2017. If we are unable to use the nationwide permits and require an individual permit for
certain work, that could delay operations.
Coronado Global Resources Inc. Form 10-K December 31, 2022 53
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.
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 laborers, 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 (including, but not limited to, ongoing labor shortage at the
Logan operations which has impacted production at our U.S. Operations and as a result of the impact of COVID-
19 pandemic) could result in our 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.
The existence (or claimed existence) of native title on land within our Australian tenements may impose
restrictions on the construction of our expansion activities and our continued operations.
In Australia, mineral exploration and mining tenure (and many other forms of tenure or interests in land) may
cover land that is subject to a claim for native title or land where native title has already been determined to exist.
Native title is the communal, group or individual rights and interests of Aboriginal or Torres Strait Islander people
in relation to their traditional land or waters. The existence of native title in Australia is recognized and protected
in accordance with the Native Title Act 1993 (Cth), or the Native Title Act, and legislation in each State and
Territory. The common law of Australia recognizes a form of native title that, in circumstances where it has not
been extinguished, reflects the entitlement of the appropriate traditional owners to their lands, in accordance with
their traditional law and custom.
If native title is either determined to exist or there are registered, but undetermined, native title claims over any
part of the tenements and native title has not otherwise been extinguished with respect to that part, we may be
required to negotiate with, and pay compensation to, the native title holders for impairment, loss or diminution or
other effect of the proposed activities on their native title rights and interests. Compensation obligations may also
arise pursuant to agreements with native title claimants or native title holders in relation to any tenements we
acquire. The existence of native title or a registered native title claim may preclude or delay the granting of
exploration and mining tenements pending resolution of the statutory procedures imposed by the Native Title Act
and considerable expenses may be incurred in negotiating and resolving native title issues.
The risk of unforeseen native title claims also could affect existing operations as well as development projects.
Although native title will not prevent the exercise of any validly granted rights and interests under our tenements,
the Native Title Act and applicable State and Commonwealth legislation, together with the recognition of native
title at common law, may impact the continued operations under our tenements, development projects and the
construction of our expansion activities and/or give rise to liability for compensation.
The Aboriginal Cultural Heritage Act 2003 (Qld) and the Torres Strait Islander Cultural Heritage Act 2003 (Qld)
provide a framework for the protection of Aboriginal and Torres Strait Islander cultural heritage. The main
mechanism through which each act operates is a list of places and artifacts of heritage significance. The acts
also create offenses such as breach of the cultural heritage duty of care. This duty of care requires a person
carrying out an activity to take all reasonable and practicable measures to ensure the activity does not harm
Aboriginal cultural heritage.
In addition, it may also be necessary for us to enter into separate arrangements with the traditional owners of the
sites. This could be costly for us and potentially cause delays in our continued operational and expansion
activities.
Although the failure to resolve any issues associated with sites of indigenous heritage significance could
adversely impact our expansion activities and our continuing operations, there are no such current or anticipated
issues.
Coronado Global Resources Inc. Form 10-K December 31, 2022 54
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 the COVID-19 pandemic that has caused significant disruption
across nearly all industries and markets, including global supply chain shortages, the impact of which,
continues to be uncertain);
• 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;
• cyber-attacks that disrupt our operations or result in the dissemination of proprietary or confidential
information about us to our customers or other third parties; and
• 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, 2022 55
Our U.S. Operations are concentrated in a small number of mines in the CAPP and our Australian Operations
include one mine 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;
• political and country risk;
• 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, 2022 56
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, including:
• 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
cost, our financial condition and results of operations may be materially 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, Golding Contractors Pty Ltd, and Wolff Mining Pty Ltd.
Coronado Global Resources Inc. Form 10-K December 31, 2022 57
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, including the COVID-19
pandemic, 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.
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,
including the COVID-19 pandemic.
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.
The loss of key personnel and the failure to recruit sufficiently qualified staff could affect our future performance.
We have entered into employment contracts with a number of key personnel in Australia and the United States,
including our Managing Director and Chief Executive Officer, Garold Spindler, our Chief Operating Officer,
Australia, Douglas Thompson, our Group Chief Financial Officer, Gerhard Ziems, and Chief Operating Officer
U.S., Jeffrey Bitzer. On January 17, 2023, Coronado announced that Mr. Spindler will retire from his role as Chief
Executive Officer and transition to the position of Executive Chair of the Board of Directors, and the Company
also announced that Mr. Thompson will be appointed as Chief Executive Officer of the Company. Mr. Spindler’s
and Mr. Thompson’s new positions will be effective immediately following the Company’s 2023 Annual General
Meeting of Stockholders.
Coronado Global Resources Inc. Form 10-K December 31, 2022 58
Mr. Spindler’s, Mr. Thompson’s, Mr. Ziems’ and Mr. Bitzer’s expertise and experience in the mining industry are
important to the continued development and operation of our mining interests. However, there is no assurance
that such personnel will remain with us for the term of their employment contracts or beyond. In the United States,
we have not entered into employment contracts with any of our key personnel (other than Mr. Spindler and his
direct reports), meaning that we do not have the benefit of notice provisions or non-compete restraints with these
employees. There may be a limited number of persons with the requisite experience and skills to serve in our
senior management positions. We may not be able to locate or employ qualified executives on acceptable terms.
In addition, as our business develops and expands, we believe that our future success will depend greatly on our
continued ability to attract and retain highly skilled personnel with coal industry experience in Australia and the
United States. We may not be able to continue to employ key personnel or attract and retain qualified personnel
in the future. The loss of such key personnel or the failure to recruit sufficiently qualified employees may affect
our business and future performance.
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 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.
Cybersecurity attacks, natural disasters, terrorist attacks and other similar crises or disruptions may
negatively affect our business, financial condition and results of operations.
Our business may be impacted by disruptions such as cybersecurity attacks or failures, threats to physical
security, and extreme weather conditions or other natural disasters. Strategic targets, such as energy-related
assets, may be at greater risk of future terrorist or cybersecurity attacks than other targets in the United States
or Australia. These disruptions or any significant increases in energy prices that follow could result in
government-imposed price controls. Our insurance may not protect us against such occurrences. It is possible
that any of these occurrences, or a combination of them, 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 systems could adversely affect our business
operations and financial performance. We rely on the accuracy, capacity and security of our information
technology, or 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 could be breached or damaged by computer viruses, natural
or man-made incidents or disasters or unauthorized physical or electronic access. Though we have controls in
place, we cannot provide assurance that a cyber-attack 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. 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 59
Mining in the CAPP is more complex and involves more regulatory constraints than mining in other areas
of the U.S., which could affect our mining operations and cost structures in these areas.
Mining in the CAPP is more complex and involves more regulatory constraints than mining in other areas of the
United States, which could affect our mining operations and cost structures in these areas. The geological
characteristics of coal reserves in the CAPP, such as depth of overburden and coal seam thickness, make them
complex and costly to mine. As mines become depleted, replacement reserves may not be available or, if
available, may not be able to be mined at costs comparable to those of the depleting mines. In addition, compared
to mines in the other areas of the United States, permitting, licensing and other environmental and regulatory
requirements are more costly and time consuming to satisfy. These factors could materially adversely affect the
mining operations and cost structures of, and our customers’ ability to use coal produced by, our mining properties
in the CAPP.
Financial and Strategic Risks
The loss of, or significant reduction in, purchases by our largest customers could adversely affect our
revenues.
For the year ended December 31, 2022, our top ten customers comprised 73.1%
of our total revenue and our
top five customers comprised 52.6%
of our total revenue. For the year ended December 31, 2022, sales to Tata
Steel and Xcoal represented 19.4%
and 11.7%,
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, including the COVID-19 pandemic, or otherwise, may adversely affect our business, financial
condition and results of operations.
If a substantial number of our customers fail to perform under our contracts with them, our revenues and
operating profits could suffer.
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.
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.
If our customers do not honor contract commitments, or if they terminate agreements or exercise force majeure
provisions allowing for the temporary suspension of performance during specified events beyond the parties’
control, including the COVID-19 pandemic and we are unable to replace the contract, our financial condition and
results of operations could be materially and adversely affected.
Coronado Global Resources Inc. Form 10-K December 31, 2022 60
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 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 form of security, we maintain an insurance policy to cover for 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 $100.0 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, 2022, we had $242.3
million aggregate principal amount of our senior secured notes
outstanding. As of December 31, 2022, no amounts were outstanding, and no outstanding letters of credit issued
under the ABL Facility. As of December 31, 2022, the available borrowing capacity under this facility was $100.0
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.
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 61
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, in 2017, some financial institutions 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.
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
present levels or levels achieved prior to the COVID-19 pandemic 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 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 raise 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 or available borrowings
under our bank financing arrangements 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 62
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.
Our balance sheet includes a number of assets that are subject to impairment risk, particularly long-lived assets,
including property, plant and equipment, mining tenements, exploration and evaluation assets and intangible
assets (including goodwill). The values of these assets are generally derived from the fundamental valuation of
the underlying mining operations and, as such, are subject to many of the same risks to which our operations are
exposed, including decreases in coal prices, foreign currency exchange risks, operational and geological risks,
changes in coal production and changes in estimates of proven and probable coal reserves. Adverse changes in
these and other risk factors could lead to a reduction in the valuation of certain of our assets and result in an
impairment charge being recognized.
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, Wiggins Island Coal
Export Terminal Pty Ltd, or WICET Pty Ltd, 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 WICET Pty Ltd 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 WICET Pty Ltd’s external debt facilities.
Under our take-or-pay agreement with WICET Pty Ltd, or the 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 Pty Ltd
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 WICET Pty Ltd if WICET Pty Ltd’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 WICET Pty Ltd can charge us for recovery of
its finance costs, referred to as a finance cap. Since WICET began operating in April 2015, four 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 15.5 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
WICET Pty Ltd’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 WICET Pty Ltd 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.
In the event of WICET Pty Ltd defaulting on its external debt obligations, external lenders to WICET Pty Ltd 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 63
Risks related to the Supply Deed with Stanwell may adversely affect our financial condition and results
of operations.
Curragh has a CSA, as amended from time to time, with Stanwell to supply thermal coal to the Stanwell Power
Station. The CSA restricted Curragh from mining the SRA which was reserved for the benefit of Stanwell and
could not be mined without Stanwell’s consent. Under the CSA, in addition to supplying thermal coal at a price
below the cost to Curragh of mining and processing the coal, Curragh 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, Curragh entered into the Supply Deed with Stanwell. The Supply Deed grants Curragh the
right to mine the coal reserves in the SRA. In exchange for these rights, Curragh has agreed to certain
amendments to the CSA and to enter into the NCSA, which will commence on or around the expiration of the
CSA (currently expected to expire in 2027). On July 12, 2019, Curragh entered into the NCSA with Stanwell.
Curragh agreed that the total value of the discount received by Stanwell on coal supplied to it under the NCSA
should (by the expiry 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 $243.2 million (A$359.0 million) as of December 31, 2022.
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, 2022, we provided $34.9
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 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.
The Financial Provisioning Act:
• amended the financial assurance arrangements for resource activities under the EP Act with a new
financial provisioning scheme, and changed how the ERC for an environmental authority is calculated;
and
• amended the EP Act to introduce new requirements for the progressive rehabilitation and closure of
mined land.
Coronado Global Resources Inc. Form 10-K December 31, 2022 64
Since April 1, 2019, any financial assurance currently held for environmental approvals already held in Australia
are treated as surety under the Financial Provisioning Act. There was a transition period of three years that
commenced in early 2019 during which all miners in Queensland were assessed and received an initial risk
allocation decision based on a formulaic calculation of their ERC. Our ERC is the cost estimated by the
government department of rehabilitating the land on which our operation is carried out. This allocation put our
resource activity at Curragh into a risk category under the Financial Provisioning Act based on the regulator’s
assessment of both the amount of our ERC and our financial capacity to carry out and discharge the rehabilitation
liability and obligation at the time our mining operations cease. This risk assessment is reviewed annually, and
assessment fees are payable each time there is an allocation decision for our operations in Queensland.
The financial provisioning scheme is managed by the Scheme Manager and financial assurance is provided by
paying a contribution to the Scheme and/or the giving of surety to the Scheme Manager. Our contribution is
calculated as the prescribed percentage (dependent on risk allocation decision) of Curragh’s ERC. The
prescribed percentages for each category are: (1) Very low: 0.5%; (2) Low: 1.0%; and (3) Moderate: 2.75%. In
the event Curragh’s ERC is allocated a high risk allocation, we are required to negotiate the percentage of surety
to be provided with the Scheme Manager. The Scheme Manager is a statutory officer and manages the Scheme
contributions and the sureties on behalf of the Queensland State Government.
In October 2022, the Scheme Manager completed the assessment of the Annual Review Allocation for
environmental authority number EPML00643713 and issued an Annual Review Allocation of “Moderate”. The
moderate rating results in Curragh being obliged to make a financial contribution to the Scheme of 2.75% of the
ERC. In January 2023, the Scheme Manager completed an assessment of the Annual Review Allocation for
Environmental Authority Number 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
Environmental Authority Number EPVX00635313.
There can be no assurance that our risk category allocation will not change in future years.
Our financial assurance obligations may increase due to a number of factors, including but not limited to:
• any change that increases ERC or area of disturbance;
• any major Environmental Authority amendment;
• compliance with existing Environmental Authority obligations; and
• major changes to financial soundness of the EA Holder.
For more information on the Financial Provisioning Act, see Item 1. “Business—Regulatory Matters—Australia—
Environmental Protection Act 1994 (Qld).”
Mine closures entail substantial costs. If we prematurely close one or more of our mines, our operations
and financial performance would likely be affected adversely.
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. 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 65
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 Environmental Protection Act 1994 (Qld) 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 $138.5
million as of December 31, 2022,
based upon permit requirements and the historical experience at our operations, and depend on a number of
variables involving assumptions and estimation and therefore may be subject to change, including the estimated
future asset retirement costs and the timing of such costs, estimated proven reserves, assumptions involving
third-party contractors, inflation rates and discount rates. If these accruals are insufficient or our liability in a future
year is greater than currently anticipated, our future operating results and financial position could be adversely
affected. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Critical Accounting Policies and Estimates.”
We are subject to foreign exchange risks involving certain operations in multiple countries.
Loss sustained from adverse movements in currency exchange rates can impact our financial performance and
financial position and the level of additional funding required to support our businesses. Our financial results are
reported in US$ 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 borrowings. Our
interest rate risk primarily arises from fluctuations in LIBOR and the Australian Bank Bill Swap Yield, or BBSY, in
relation to US$- and A$-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.
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. For example, after 2021, the United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, no longer compelled banks to submit rates for
the calculation of non-U.S.-dollar LIBOR. U.S-dollar LIBOR must be replaced before June 30, 2023. The
Alternative Reference Rates Committee has proposed SOFR as its recommended alternative to LIBOR. At this
time, it is not possible to predict the effect that these developments, any discontinuance, modification or other
reforms to LIBOR or any other reference rate, or the establishment of alternative reference rates, including SOFR,
may have on LIBOR or other benchmarks, including LIBOR-based borrowings under our variable-rate bank
balances and variable-rate borrowings. Furthermore, the use of alternative reference rates or other reforms could
cause the market value of, the applicable interest rate on and the amount of interest paid on our benchmark-
based borrowings to be materially different than expected and could materially adversely impact our ability to
refinance such borrowings or raise future indebtedness on a cost effective basis.
Coronado Global Resources Inc. Form 10-K December 31, 2022 66
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.
Legal, Compliance and Sustainability Risks
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, 2022, we had 1,735 employees. In addition, as of December 31, 2022, there were 2,326
contractors supplementing the permanent workforce, primarily at Curragh. As of December 31, 2022,
approximately 11.5% of our total employees, all at our Australian Operations, were represented by organized
labor unions and covered by the EA. In May 2019, the Australian Fair Work Commission approved the Curragh
Mine Enterprise Agreement 2019. This EA has a nominal expiration date of May 26, 2022 and but remains in
place by operation of the Fair Work Act 2009 (Cth) until replaced or terminated by the Fair Work Commission.
We have been negotiating with employee bargaining representatives for a replacement EA since March 2022.
Those negotiations continue in good faith with the intent of reaching an agreement as soon as practicable. Our
U.S. Operations employ a 100% non-union labor force .
Coronado Global Resources Inc. Form 10-K December 31, 2022 67
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 Environmental
Protection Act 1994 (Qld), 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.
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. Of the five refuse areas among our U.S. mining properties, only two
impound slurry; the other facilities are combined refuse and do not impound slurry. Two of our impoundments in
the U.S. overlie mined out areas, which can pose a heightened risk of failure and the assessment of damages
arising out of such failure. If one of our impoundments 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 policy, regulation 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 68
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. 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.
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 will 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, we will 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.
For example, on September 27, 2022, we received from the Queensland Revenue Office, or QRO, an
assessment of the stamp duty payable on our acquisition of the Curragh mine in March 2018. The QRO assessed
the stamp duty on this acquisition at an amount of $55.4 million (A$82.2 million) plus unpaid tax interest of $8.2
million (A$12.1 million). On November 23, 2022, the Company filed an objection to the assessment and is
currently awaiting the outcome of this objection. The outcome of this objection is uncertain.
We have reviewed the assessment received and based on legal and valuation advice the Company continues to
maintain its position regarding the estimated accrual of $29.0 million (A$43.0 million) stamp duty payable on the
Curragh acquisition. During the period we made a partial payment reducing the estimated accrual to $11.7 million
(A$17.3 million) as at December 31, 2022, which is included within “Accrued Expenses and Other Current
Liabilities” in its Consolidated Balance sheet.
We cannot guarantee that the steps we take to defend our position on this matter will be successful, in which
case the amount assessed by the QRO and unpaid tax interest on the amount outstanding may become due and
payable.
Coronado Global Resources Inc. Form 10-K December 31, 2022 69
Additionally, in 2022, the Queensland State Government in Australia amended the Mineral Resources Regulation
2013 (Qld) introducing additional higher tiers to the coal royalty rates effective from July 1, 2022, increasing the
royalty payable by our Australian Operations.
The new tiers applicable in calculating the royalty payable for our Australian Operations from July 1, 2022, are
as set out below:
• 7% for average coal price per Mt sold up to and including A$ 100 per Mt;
• 12.5% for average coal price per Mt sold from 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.”
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.
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 bylaws and certificate of
incorporation impose various procedural and other requirements that could make it more difficult for stockholders
to effect certain corporate actions.
Coronado Global Resources Inc. Form 10-K December 31, 2022 70
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.
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, 2022, 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.”
Coronado Global Resources Inc. Form 10-K December 31, 2022 71
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.”
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 72
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
need to ensure continuous compliance with 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.
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, all of which could be magnified during the COVID-19 pandemic. 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;
Coronado Global Resources Inc. Form 10-K December 31, 2022 73
• 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 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 common stockholders.
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;
• changes in government regulation;
• potential or actual military conflicts or acts of terrorism;
• 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/ASX indices); and
• the nature of the markets in which we operate.
Coronado Global Resources Inc. Form 10-K December 31, 2022 74
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 the COVID-19 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 stock are dependent on a number of factors, and future
payments and repurchases cannot be assured.
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 governing our senior secured notes and covenants under the ABL Facility. Any future dividends
will be determined by our Board of Directors having regard to these factors, among others. There is no guarantee
that any dividend will be paid, or repurchases will be made, by us, or if paid, paid at previous levels. From time
to time, our Board of Directors may also cancel previously announced dividends.
Coronado Global Resources Inc. Form 10-K December 31, 2022 75
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
Coronado Global Resources Inc. Form 10-K December 31, 2022 76
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
producing mine complex. With respect to our U.S. Operations, Coronado owns a 100% interest in two producing mine
complexes (Buchanan and Logan) and a 100% interest in one temporarily idled, production-stage mine complex (Greenbrier)
and two development properties (Mon Valley Minerals (formerly called Pangburn-Shaner-Fallowfield) and Russell County).
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, 2022 77
14.7
10.5
25.2
13.6
12.8
26.4
12.4
13
25.3
Australia
United States
Group
ROM production (Mt)
FY20
FY21
FY22
12.0
5.1
17.0
11.1
6.3
17.4
9.8
6.2
16.0
Australia
United States
Group
Saleable production (Mt)
FY20
FY21
FY22
Figure 2: U.S. Operations:
The below charts show run-of-mine, or ROM, production and saleable production for our Australian Operations and our U.S.
Operations for the years ended December 31, 2022, 2021 and 2020.
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, 2022.
Coronado Global Resources Inc. Form 10-K December 31, 2022 78
Table 1. Summary 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
HCC, SCC,
PCI, Thermal
Various (Rangal
Coal Measures)
CPP1 - 1100 raw
Mt per hour;
CPP2 - 1200 raw
Mt per hour; Rail
Loadout
Buchanan
(Production)
25,852 hectares
leased
(3)
; 7,725
hectares owned
1 Permit
Underground
Low-Vol
Pocahontas #3
(Pocahontas
Formation)
CPP - 1270 raw
Mt per hour; Rail
Loadout
Logan
(Production)
13,183 hectares
leased
(3)
; 69
hectares owned
24 Permits
Surface &
Underground
HVA, HVB,
Thermal
Various
(Kanawha
Formation)
CPP – 1088 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
Greenbrier
(Production -
Idled)
18,907 hectares
leased
(3)
22 Permits
Surface &
Underground
Mid-Vol, PCI,
Thermal
Pocahontas #6,
#7, #8
(Pocahontas
Formation);
Various (New
River Formation)
CPP - 544 raw Mt
per hour; Rail
Loadout
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) We are not aware of any significant encumbrances or defects in title with respect to any of our mining properties. Certain credit
facilities of the Company are secured by a lien on substantially all of the Company’s assets, including mining properties.
(2) We believe we have secured all applicable environmental licenses and permits under applicable law and have all necessary permits
and licenses regarding cultural heritage, native title and various other social issues to support current mining operations.
(3) Subject to the exercise of our renewal rights thereunder, most of the leases at our U.S. mining properties expire upon exhaustion
of the relevant reserves.
(4) Proposed mine type.
Coronado Global Resources Inc. Form 10-K December 31, 2022 79
Table 2.
Summary Coal Resources Exclusive of Reserves at End of the Fiscal Year Ended December 31, 2022.
(1)
Coal Resources (In Situ, MMt)
(2)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
Australia
Curragh
328
184
512
142
19.5%
0.5%
18.4%
Total Australia
328
184
512
142
United States
Buchanan
34
6
40
—
25.0%
0.7%
16.0%
Logan
45
37
82
3
24.0%
1.0%
28.0%
Mon Valley
—
—
—
—
—
—
—
Greenbrier
19
14
33
—
31.0%
1.1%
20.0%
Russell County
40
4
44
—
29.0%
0.7%
23.0%
Total United States
138
61
199
4
Total
466
245
711
147
(1) For more information regarding price assumptions used in the calculation of coal resources as of December 31, 2022, 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, 2022.
(1)
Demonstrated Coal Reserves (Wet
Tons,
Washed or Direct Shipped, MMt)
(2)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
Australia
Curragh
188
18
205
10.7%
0.4%
19.0%
Total Australia
188
18
205
United States
Buchanan
88
5
93
6.0%
0.7%
19.0%
Logan
53
17
71
8.0%
0.9%
36.0%
Mon Valley
78
57
134
8.0%
1.2%
35.0%
Greenbrier
4
2
7
8.0%
1.0%
26.0%
Russell County
24
5
29
8.0%
0.9%
31.0%
Total United States
247
87
334
Total
435
105
539
(1) For more information regarding price assumptions used in the calculation of coal reserves as of December 31, 2022, see the
individual property disclosures below.
(2) For more information regarding moisture assumptions used in the calculation of coal reserves as of December 31, 2022, see the
individual property disclosures below.
(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.
Curragh
Curragh is a production-stage mining property that consists of two active, open-pit, surface mines (Curragh North and Curragh
Main). Coal mine development at the Curragh property is presently accomplished by surface mining methods and has been
so historically since the mine’s inception. 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 Curragh is shown in Figure 3.
Coronado Global Resources Inc. Form 10-K December 31, 2022 80
Figure 3. Coronado Curragh Mine Complex Property Location Map.
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 the RG Tanna Coal Terminal or Wiggins Island Coal Export Terminal 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 water to the
mine complex from the Fairbairn Dam via the Bedford Weir. The mine complex also recycles water from on-site dams—i.e.,
old open-cut pits 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, or MW, 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 CPP.
Coronado Global Resources Inc. Form 10-K December 31, 2022 81
The Mineral Resources Act 1989 (Qld), or MRA, and the Mineral and Energy Resources (Common Provisions) Act 2014
(Qld), or 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 an ML.
We control 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 mining and 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—Tenements” for additional information regarding Curragh mining tenements.
Property control and mining rights at Curragh are entirely expressed in the MLs and MDLs mentioned in Item 1. “Business—
Regulatory Matters—Australia—Tenements.” An overlapping petroleum tenure exists over the southern extents of the
Tenements. Under the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld), 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 new
regulated tiered structure introduced 1st July 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 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 12.0 MMt in 2020, 11.1 MMt in 2021 and 9.8 MMt in 2022.
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.
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 a fleet of smaller contractor excavators. Contractors are employed for the pre strip, post strip and coal
mining activities. Contract highwall mining operations has commenced at Curragh North during the 2022 calendar year.
Curragh has two coal preparation plants CPP1 and CPP2. CPP1 is the oldest of the two processing plants and has a
documented nameplate capacity of 1100 tph (as received). CPP2 has a documented nameplate capacity of 1200 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. All of the draglines have additional boom (stress) monitoring systems, which allow us to
increase their total suspended load capacities, and still achieve over 90% mechanical availability. Prior to our 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 we have continued since
acquiring the mine complex. This program helps us 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, 2022, the book value of Curragh and its associated plant and equipment was $761.8
million.
We are not aware of any significant encumbrances or defects in title with respect to the 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 82
Summaries of Curragh’s coal resources and reserves as of December 31, 2022 and 2021 are shown in Tables 4 and 5,
respectively.
Table 4. Curragh – Summary of Coal Resources Exclusive of Reserves at the End of the Fiscal Year Ended December
31, 2022 and 2021.
(1)
Coal Resources
(Wet Tons, In Situ, MMt)
(2)(3)(4)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2022
328
184
512
142
19.5%
0.50%
18.4%
December 31, 2021
328
184
512
142
19.5%
0.50%
18.4%
(1) Curragh splits the resource into areas that are above and below a 15:1 open cut stripping ratio and considers the lower ratio areas
as suitable for open cut mining at the higher ratio areas as suitable for underground mining. The average sales price for the
underground resources was estimated to be $147 per Mt (FOB). Pricing for resources is described in Section 11.5 of the Curragh
TRS.
(2) There are resources suitable for open cut mining outside of reserves. Pricing for resources is described in Section 11.5 of the
Curragh TRS. Based on assumed long-term average sales price of $143 per Mt (FOB) representing the long-term average price
forecast for Curragh based on independent price forecasts.
(3) Table 1-1 of the Curragh TRS provides a summary of Curragh resource tons inclusive of reserve tons as of December 31, 2021.
(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, 2022 and 2021.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2022
188
18
205
10.7%
0.4%
19.0%
December 31, 2021
198
18
215
10.7%
0.4%
19.0%
(1) Based on pricing data as provided by Coronado described in Section 16 of the Curragh TRS. The pricing data assumes average
realized price of $141 per Mt sold over the LOM.
(2) Reported on an 11.0% 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, 2021 to December 31, 2022, total reserves decreased by approximately 5%, from approximately 215.0
MMt to approximately 205.0 MMt. The decrease in total reserves is attributable to mining depletion.
Barry Lay, BSc Geology (Hons); MAusIMM of Resology Pty Ltd, and Paul Wood, B. Eng.; MAusIMM(CP), who is employed
full-time as the Senior Life of Mine Planner of our subsidiary, Coronado Curragh, whom we refer to 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 21, 2022, or the Curragh TRS, is filed as Exhibit 96.1
hereto. Neither Mr. Barry Lay nor Resology Pty Ltd is affiliated with Coronado.
The Australian QPs prepared the estimates of 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 the Property, 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 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 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 83
As summarized in Section 7.1 of the Curragh TRS, the concentration of exploration drill holes varies slightly across the
Property. The location of the drilling is shown on the maps included in Section 7. Points of observation include exploration
drill holes and mine measurements, which have been fully vetted and processed into a geologic model. The geologic 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 the viability of a coal deposit. As per Table 11-1 of the Curragh TRS, coal quality
conforms to international standards. These quality attributes aided in converting in-place tons to demonstrated coal reserves
(recoverable washed tons). Pricing data as provided by Coronado is described in Table 16-1 of the Curragh TRS. These are
weighted-average 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. Mine development and operation have not been optimized within the Curragh TRS. 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.
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 27 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 33,577 total hectares, of which 25,852 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 2044.
Coronado Global Resources Inc. Form 10-K December 31, 2022 84
Under the terms of the relevant leases, we are required to pay royalties ranging from 4% 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 3.4 MMt in 2020, 4.4 MMt in 2021 and 3.9 MMt in 2022.
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 1.58 meters within the mining area.
The Buchanan mine extracts coal using a single longwall system supported by six continuous miner sections, which develop
main entries and gate roads in preparation for the longwall. 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.
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, 2022, the book value of Buchanan and its associated plant and equipment was $387.6 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 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 85
Summaries of Buchanan’s coal resources and reserves as of December 31, 2022 and 2021 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, 2022 and 2021.
(1)
Coal Resources (Dry Tons, In Situ, MMt)
(2)(3)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2022
34
6
40
—
25.0%
0.7%
16.0%
December 31, 2021
11
4
15
—
25.0%
0.7%
16.0%
(1) Pricing for resources is described in Section 11.3.1 of the Buchanan TRS. Based on assumed long-term average price of $94 per
Mt (FOB loadout) for Buchanan resources as of December 31, 2021 and $110 per Mt (FOB loadout)for resources at December 31,
2022, 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, 2022.
(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.
Table 7. Buchanan – Summary of Coal Reserves (Marketable Sales Basis) at the End of the Fiscal Year Ended
December 31, 2022 and 2021.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2022
88
5
93
6.0%
0.7%
19.0%
December 31, 2021
87
11
98
6.0%
0.7%
19.0%
(1) Pricing data as provided by Coronado is described in Section 16.2 of the Buchanan TRS. For Buchanan reserves as of December
31, 2021, the pricing data assumes a weighted average domestic and international FOB-mine price of approximately $197 per Mt
for calendar year 2022; the weighted average price decreases to approximately $118 to $126 per Mt through year 2026 and
averages approximately $152 per Mt over the LOM. For Buchanan reserves as of December 31, 2022, the pricing data assumes
a weighted average domestic and international FOB-mine price of approximately $179 per Mt for calendar year 2023; the weighted
average price decreases to approximately $132 to $143 per Mt through year 2027 and averages approximately $153 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, 2021 to December 31, 2022, total reserves decreased by approximately 5%, from approximately 98.0
MMt to approximately 93.0 MMt. This net reduction of 5.0 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, 2021, was prepared in
February 2023 due to material differences in the key financial modifying factors, including coal sales price assumptions,
operating costs and capital costs from December 31, 2021 to December 31, 2022. 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, 2021 to
December 31, 2022. From December 31, 2021 to December 31, 2022, measured and indicated resources increased
significantly, by approximately 167%, due to evaluation of additional gas well data in the North where none had previously
been analyzed. 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 11.3.1 of the Buchanan TRS, did not have a material
impact on the measured and indicated resource estimates as of December 31, 2022, as compared to the measured and
indicated resource estimates as of December 31, 2021. Net increase resulted in an additional 25 MMt of in-place resources
in the North.
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, 2022 summarized in Tables 6 and 7. A copy of the U.S.
QPs’ TRS with respect to Buchanan, dated as of February 15, 2023, or the Buchanan TRS, is filed as Exhibit 96.2 hereto.
The U.S. QPs are not affiliated with Coronado.
Coronado Global Resources Inc. Form 10-K December 31, 2022 86
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.
As summarized in Section 7.1 in the Buchanan TRS, the U.S. QPs utilized 4,589 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. Historically, the United States has
assumed that coal within 0.4 kilometers of a point of observation represents a measured resource, whereas coal between 0.4
kilometers and 1.2 kilometers from a point of observation is classified as indicated. Inferred resources are commonly assumed
to be located between 1.2 kilometers and 4.8 kilometers from a point of observation. The U.S. QPs performed a geostatistical
analysis of the Buchanan data set using the Drill Hole Spacing Analysis, or DHSA, method. DHSA prescribes that measured,
indicated and inferred drill hole spacings be determined at the 10%, 20%, and 50% levels of relative error, respectively.
Comparing the results of the DHSA to the historical standards, it is evident that the historical standards are more conservative
than even the most conservative DHSA model with regards to determining measured resources. The Exponential model
included in the DHSA recommends using a radius of 0.67 kilometers for measured resources compared to the historical value
of 0.4 kilometers. With respect to indicated resources the DHSA falls in line closely with the historical standards. The
Exponential and Spherical models of the DHSA recommend using a radius of 1.08 kilometers from a point of observation for
indicated resources, while the Gaussian model included in the DHSA recommends a radius of 1.10 kilometers from a point
of observation for indicated resources. These values line up closely with the historical radius of 1.2 kilometers. 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 (North Fork
Winifrede, Lower War Eagle, Eagle No. 1 and Muddy Bridge) and supporting infrastructure that produce High-Volatile Met
coal using the room and pillar mining method and one active surface mine (Toney Fork) and supporting infrastructure that
produce both Met and thermal coal using the contour and highwall mining methods. The Logan complex life plan includes 12
proposed mines, consisting of nine 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 87
Figure 5. Coronado Logan Mine Complex Property Location Map.
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 13,183 total hectares, 13,114 of which are leased from private landholders under
approximately 15 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 2056. One lease expires in 2032; however, Coronado is projected to have
previously exhausted the 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 1.6 MMt in 2020, 1.9 MMt in 2021 and 2.1 MMt
in 2022.
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, most of which are situated below drainage; however, several Met coal seams are situated above drainage. Logan
also produces thermal coal from upper portions of the Kanawha Formation.
Coronado Global Resources Inc. Form 10-K December 31, 2022 88
Most of Logan’s Met coal production is attributable to its four active underground mines, Winifrede, Lower War Eagle, Eagle
No. 1 and Muddy Bridge, each of which uses the room and pillar mining method. The North Fork Winifrede mine utilizes one
continuous miner section to extract coal from the Upper Winifrede seam, which is situated above drainage throughout the
property and accessed by drift entry. The Lower War Eagle mine utilizes two continuous miner super sections to extract coal
from the Lower War Eagle seam, which is situated below drainage throughout the property and accessed by slope. The Eagle
No. 1 mine utilizes three continuous miner super sections to extract coal from the No. 2 Gas seam, which is situated above
drainage throughout the property and accessed by drift entry. The Muddy Bridge mine utilizes two continuous miner super
sections to extract coal from the No. 2 Gas seam, which is situated above drainage throughout the property and accessed by
drift entry.
A majority of the 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 or four roof bolters, three or six 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 Lower
War Eagle mine to a CPP. Trucks haul raw coal from the Eagle No. 1 and North Fork Winifrede mines 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 surface mine extracts Met and thermal coal using the area mining method. The current LOM plan for Toney
Fork also contemplates utilizing contour and highwall mining methods at various times during the life of the mine. The mine
uses a spread 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 to the CPP site for cleaning or to the loading site to be shipped directly to
customers.
Our current plans at Logan contemplate 12 proposed mines, consisting of nine underground mines and three surface mines,
including the five 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, 2022, the book value of Logan and its associated plant and equipment was $232.1
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 24 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 $0.28 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, 2022 and 2021 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, 2022 and 2021.
(1)
Coal Resources (Dry Tons, In Situ, MMt)
(2)(3)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2022
45
37
82
3
24.0%
1.0%
28.0%
December 31, 2021
46
37
83
3
24.0%
1.0%
28.0%
Coronado Global Resources Inc. Form 10-K December 31, 2022 89
(1) Pricing for resources is described in Section 11.3.1 of the Logan TRS. For Logan resources as of December 31, 2021, based on
assumed long-term average price of $130 per ton (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 $52 per Mt (FOB
loadout) based on estimated historical pricing for Coronado’s surface operations. For Logan resources as of December 31, 2022,
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.
(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, 2022.
(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.
Table 9. Logan – Summary of Coal Reserves (Marketable Sales Basis) at the End of the Fiscal Year Ended December
31, 2022 and 2021.
(1)
Demonstrated Coal Reserves (Wet
Tons,
Washed or Direct Shipped, MMt)
(2)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2022
53
17
71
8.0%
0.9%
36.0%
December 31, 2021
53
20
74
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,
2021, the pricing data assumes respective HVA, HVB, specialty markets and thermal FOB-mine prices of approximately $224,
$123, and $51 per Mt for calendar year 2022; HVA, HVB, and thermal prices decrease to approximately $145, $115, and $51 per
Mt, respectively, through year 2026, and then increase to $227, $189, and $51 per Mt, respectively, through year 2050 (after which
sales prices were held constant). For Logan reserves as of December 31, 2022, the pricing data assumes respective HVA, HVB
and thermal FOB-mine prices of approximately $192, $170, and $227 per Mt for calendar year 2023; HVA, HVB, and thermal prices
decrease to approximately $151, $132, and $83 per Mt, respectively, through year 2027, and then increase to $271, $237, and
$150 per Mt, respectively, through year 2056.
(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, 2021 to December 31, 2022, total reserves decreased by approximately 3.9%, from approximately 73.5
MMt to 70.6 MMt. This net reduction of 2.9 MMt of total reserves was attributable to a combination of updates to the mine
plans along with one year of mining depletion. 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, 2021, was prepared in February 2023 due
to material differences in the key financial modifying factors including coal sales price assumptions, operating costs and
capital costs from December 31, 2021, to December 31, 2022. 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 estimates as of December 31, 2022, as compared to the reserve
estimates as of December 31, 2021. From December 31, 2021, to December 31, 2022, measured and indicated resources
decreased by approximately 0.7%, from approximately 82.8 MMt to 82.2 MMt. This net reduction of 0.6 MMt of measured and
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, as discussed in Section 11.3.1 of the Logan TRS, did not have a material impact on the measured and indicated
resource estimates as of December 31, 2022, as compared to the measured and indicated resource estimates as of
December 31, 2021.
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, 2022 summarized in Tables 8 and 9. A copy of the U.S.
QPs’ TRS with respect to Logan, dated as of February 15, 2023, 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 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 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 90
As summarized in Section 7.1 in the Logan TRS, the U.S. QPs utilized 1,131 available core, rotary, and gas well drilling on
and around the Logan 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. Historically, the United States has assumed that coal within 0.4 kilometers of a point of
observation represents a measured resource whereas coal between 0.4 kilometers and 1.2 kilometers from a point of
observation is classified as indicated. Inferred resources are commonly assumed to be located between 1.2 kilometers and
4.8 kilometers from a point of observation. The U.S. QPs performed a geostatistical analysis of the Logan data set using the
DHSA method. DHSA prescribes measured, indicated, and inferred drill hole spacings be determined at the 10%, 20%, and
50% levels of relative error, respectively. Comparing the results of the DHSA to the historical standards, it is evident that the
historical standards are more conservative than even the most conservative DHSA model with regards to determining
measured resources. The Exponential and Spherical models recommend using a radius of 0.87 kilometers for measured
resources compared to the historical value of 0.4 kilometers. With respect to indicated resources the Spherical and
Exponential models recommend using a radius 1.53 kilometers. The historical radius of 1.2 kilometers is therefore also more
conservative than the DHSA results for indicated resources. 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 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 cutoff 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, 2022. Each mine is scheduled to operate one to three
production sections. A majority of the 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 91
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.
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. 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 2100.
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 2032, followed by the Shaner
mine in 2038 and, finally, the Fallowfield mine in 2057. 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, 2022, the book value of Mon Valley was $17.4 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, 2022 and 2021. Table 1-1 of the Mon Valley
TRS provides a summary of Mon Valley resource tons inclusive of reserve tons as of December 31, 2022.
A summary of Mon Valley’s coal reserves as of December 31, 2022 and 2021 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, 2022 and 2021.
(1)
Demonstrated Coal Reserves (Wet
Tons, Washed
or Direct Shipped, MMt)
(2)
Quality (Air-Dried Basis)
Proven
Probable
Total
Ash
Sulfur
Volatile
Matter
December 31, 2022
78
57
134
8.0%
1.2%
35.0%
December 31, 2021
78
57
134
8.0%
1.2%
35.0%
Coronado Global Resources Inc. Form 10-K December 31, 2022 92
(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, 2021, the pricing data assumes HVB domestic and export FOB-mine prices of approximately $137 and $120 per Mt,
respectively, for calendar year 2027; HVB domestic and export prices increase to approximately $221 and $193 per Mt,
respectively, through year 2050, and then increased by 1% annual inflation thereafter. For Mon Valley reserves as of December
31, 2022, the pricing data assumes HVB domestic and export FOB-mine prices of approximately $130 and $114 per Mt,
respectively, for calendar year 2028; HVB domestic and export prices increase to approximately $204 and $178 per Mt,
respectively, through year 2050, and then increased by 2% annual inflation thereafter.
(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.
Total reserves did not change from December 31, 2021, to December 31, 2022. 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,
2021, was prepared in February 2023 due to material differences in the key financial modifying factors including coal sales
price assumptions, operating costs and capital costs from December 31, 2021, to December 31, 2022. 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 15, 2023, 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 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. Historically, the United States has assumed that coal within 0.4 kilometers of a
point of observation represents a measured resource whereas coal between 0.4 kilometer and 1.2 kilometers from a point of
observation is classified as indicated. Inferred resources are commonly assumed to be located between 1.2 kilometers and
4.8 kilometers from a point of observation. The U.S. QPs performed a geostatistical analysis of the Pennsylvania data set
using the DHSA method. DHSA prescribes measured, indicated, and inferred drill hole spacings be determined at the 10-
percent, 20-percent, and 50-percent levels of relative error, respectively. Comparing the results of the DHSA to the historical
standards, it is evident that the historical standards are more conservative than even the most conservative DHSA model with
regards to determining measured resources. The Gaussian and Spherical models recommend using a radius of 0.72
kilometers for measured resources compared to the historical value of 0.4 kilometers. With respect to indicated resources
the DHSA falls in line closely with the historical standards. The Exponential model recommends using a radius 1.43
kilometers, while the Spherical and Gaussian models recommend a radius of 1.42 kilometers, respectively. These values
line up closely with the historical radius of 1.2 kilometers. 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 cutoff thickness, and recoveries. Pricing data as provided by Coronado is
described in Section 16.2 of the Mon Valley TRS.
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 93
Greenbrier (Non-Material Property)
The Greenbrier property has been idled since April 1, 2020. During the fourth quarter of 2020, the Company committed to a
plan to sell Greenbrier on the basis that it does not form part of the Company’s core business strategy. The Greenbrier
property is not considered material to Coronado’s business or financial conditions. Resources exclusive of reserves are based
on assumed long-term average price of $154 per Mt (FOB loadout) for all resources, representing the Company’s long-term
average price forecast for Greenbrier. The pricing data assumes respective Mid-Vol/Low-Vol and thermal/PCI FOB-mine
prices of approximately $152 and $80 per Mt for calendar year 2028. Mid-Vol/Low-Vol and thermal/PCI prices increase to
approximately $206 and $109 per Mt, respectively, through year 2043. The Greenbrier operations are projected to be fully
depleted in 2043. 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%.
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 in 2040. Resources
exclusive of reserves are based on assumed long-term average price of $143 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 $228 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
Coronado Global Resources Inc. Form 10-K December 31, 2022 94
• Risks and opportunities.
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.
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.
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.
the mining cost. Our geology department conducts the exploration program and provides geological models for the
life-of-mine 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.
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.
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.
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.
•
Transportation costs.
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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 95
•
Royalty costs.
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—
Australia Sales and Marketing—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.
coal sold domestically.
•
Exchange rates.
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, 2022 96
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, 2022 97
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
Global Resources.
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 Federal Mine Safety and Health Act of 1977, or 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, 2022 98
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, 2022, we had 167,645,373 shares of our common stock issued and outstanding with 7,513
holders of record. The holders included CHESS Depositary Nominees Pty Limited, which held 90,337,270 shares
of our common stock in the form of CDIs on behalf of the CDI holders; there were 7,512 registered owners of our
CDIs on December 31, 2022.
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 senior secured 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, 2022.
Purchases of Equity Securities by the Issuer and Affiliated Purchases
We had no repurchases of equity securities for the three months ended December 31, 2022.
Coronado Global Resources Inc. Form 10-K December 31, 2022 100
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, 2022, we produced 16.0
MMt and sold 16.4 MMt of coal. Met coal and thermal
coal sales represented 77.2% and 22.8%, respectively, of our total volume of coal sold and 95.3% and 4.7%,
respectively, of total coal revenues.
During the year ended December 31, 2022, seaborne index prices reached record highs globally, driven by the
continued impact of the Russian invasion of Ukraine, which removed Russian Met coal from key markets, Met
coal crossover trades into thermal market due to elevated demand for thermal coal and supply constraints caused
by wet weather and logistical issues.
Coronado has continued to take advantage of its unique geographical diversification as a Met coal supplier of
scale to meet the requirements of steel customers across the globe. Our U.S. Operations have taken advantage
of current unique market fundamentals created by the trade restrictions on Russian coal by switching coal sales
from China to Europe providing higher returns for our products. In addition to geographical diversification,
Coronado is well positioned to take advantage of price arbitrage between the Thermal and Met coal markets to
maximize price realizations.
Our results of operations for the year ended December 31, 2022 benefited from higher averaged realized Met
price per Mt sold, partially offset by (1) significant unprecedented wet weather events impacting production at our
Australian Operations, (2) inflationary pressure, including the higher cost of fuel and labor costs, (3) adverse
geological conditions and weather events at our U.S. Operations resulting in lower production and higher
equipment maintenance costs, (4) additional fleets mobilized at our Australian Operations to improve coal
recovery and (5) higher sales related costs (Stanwell rebate, royalties and freight costs).
Coal revenues of $3.5
billion
for the year ended December 31, 2022, increased by 67.3% compared to the same
period in 2021, was largely driven by higher market price of coal resulting in increased average realized Met coal
pricing of $265.8 per Mt sold, $127.8 per Mt sold higher than 2021. Sales volumes were lower for the year ended
December 31, 2022, compared to 2021 primarily due to lower production caused by significant wet weather
events at our Australian Operations and adverse geological conditions at our U.S. Operations.
Operating costs for the year ended December 31, 2022, were $680.5 million, or 41.6%, higher compared to the
corresponding period in 2021 driven by inflationary pressures on labor and supply costs, adverse geological
conditions in certain mines of our U.S. Operations, additional contractor fleets deployed at our Australian
Operations to accelerate overburden removal and increase coal availability, higher maintenance costs and higher
sales related costs, resulting in mining costs of $88.4 per Mt sold for the year ended December 31, 2022, 34.5%
higher than 2021.
Dividends
During the year ended December 31, 2022, Coronado paid total dividends of $700.2 million to stockholders and
CDI holders on the ASX, net of $1.4 million foreign exchange gain on payment of dividends to certain CDI holders
that elected to be paid in Australian dollars.
Liquidity
As of December 31, 2022, the Company’s net cash position was $92.1 million, consisting of cash (excluding
restricted cash) of $334.4 million and $242.3 million aggregate principal amount of Notes outstanding. Coronado
had available liquidity of $434.4 million as of December 31, 2022, comprising cash (excluding restricted cash)
and undrawn available borrowings $100.0 million under our ABL facility.
Notes redemption
During the year ended December 31, 2022, we redeemed $72.7 million of the Notes, $37.7 million of which were
in relation to offers made in connection with dividends paid during the period.
Coronado Global Resources Inc. Form 10-K December 31, 2022 101
Safety
For our Australian Operations, the twelve-month rolling average Total Reportable Injury Frequency Rate at
December 31, 2022 was 3.92 compared to 3.07 at the end of December 31, 2021. At our U.S. Operations, the
twelve-month rolling average Total Reportable Incident Rate, at December 31, 2022 was 2.42 compared to 2.51
at the end of December 31, 2021. Reportable rates for our Australian Operations and U.S. Operations were below
the relevant industry benchmarks.
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.
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
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; and (vi) average segment operating costs
per Mt sold, which we define as segment operating costs divided by sales volumes for the respective segment.
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. Sales to the export market from our U.S. Operations are generally
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 and mining costs,
which are financial measures not recognized in accordance with U.S. GAAP. Non-GAAP financial measures,
including Adjusted EBITDA, are used by investors to measure our operating performance.
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
Coronado Global Resources Inc. Form 10-K December 31, 2022 102
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, 2022 Compared to Year Ended December 31, 2021
Summary
The financial and operational highlights for the year ended December 31, 2022:
• Net income increased by $582.3 million, from a net income of $189.4 million for the year ended December
31, 2021, to a net income of $771.7 million for the year ended December 31, 2022. The increase was
driven by higher revenues, partially offset by higher operating costs and higher income tax expense.
• Supply concerns in key Met coal markets driven by wet weather, logistic issues, the ongoing impact of
the Russia and Ukraine war on global coal supply chain and Met coal crossover trades into the thermal
market caused considerable volatility in coal pricing, resulting in average realized Met price per Mt sold
of $265.8 for the year ended December 31, 2022, 92.6% higher
compared to $138.0 per Mt sold for the
year ended December 31, 2021.
• Total sales volume was 16.4 MMt for the year ended December 31, 2022, or 1.5 MMt lower than the year
ended December 31, 2021. The lower sales volumes were primarily driven by significant wet weather
events at our Australian Operations and adverse geological and weather events at one of our mine
complexes at our U.S. Operations.
• Adjusted EBITDA for the year ended December 31, 2022, totaled $1,215.6 million, an increase of $729.5
million, from Adjusted EBITDA of $486.1 million for the year ended December 31, 2021, driven by higher
coal revenues partially offset by higher operating costs.
• Cash provided by operating activities was $926.6 million for the year ended December 31, 2022, an
increase of $484.6 million compared to $442.0 million for the year ended December 31, 2021.
• As of December 31, 2022 the Company had total available liquidity of $434.4 million, consisting of $334.4
million of cash (excluding restricted cash) and $100.0 million of availability under the ABL Facility.
Coronado Global Resources Inc. Form 10-K December 31, 2022 103
For Year Ended December 31,
(US$ in thousands)
2022
2021
Change
%
Revenues:
Coal revenues
3,527,626
2,108,331
1,419,295
67.3%
Other revenues
43,916
40,140
3,776
9.4%
Total revenues
3,571,542
2,148,471
1,423,071
66.2%
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
1,515,585
1,195,250
320,335
26.8%
Depreciation, depletion and amortization
167,046
177,875
(10,829)
(6.1%)
Freight expenses
249,081
241,862
7,219
3.0%
Stanwell rebate
165,995
55,403
110,592
199.6%
Other royalties
385,065
142,751
242,314
169.7%
Selling, general, and administrative expenses
42,499
30,666
11,833
38.6%
Restructuring costs
—
2,300
(2,300)
(100.0%)
Total costs and expenses
2,525,271
1,846,107
679,164
36.8%
Other income (expenses):
Interest expense, net
(67,632)
(68,062)
430
(0.6%)
Loss on debt extinguishment
(5,336)
(8,477)
3,141
(37.1%)
(Increase) decrease in provision for discounting and
credit losses
(3,821)
8,042
(11,863)
(147.5%)
Gain on disposal of asset
—
14,845
(14,845)
(100.0%)
Other, net
33,795
(6,187)
39,982
(646.2%)
Total other expense, net
(42,994)
(59,839)
16,845
(28.2%)
Income before tax
1,003,277
242,525
760,752
313.7%
Income tax expense
(231,574)
(53,102)
(178,472)
336.1%
Net income
771,703
189,423
582,280
307.4%
Less: Net loss attributable to noncontrolling interest
—
(2)
2
(100.0%)
Net income attributable to Coronado Global
Resources Inc.
771,703
189,425
582,278
307.4%
Coal revenues
Coal revenues were $3,527.6 million for the year ended December 31, 2022, an increase of $1,419.3 million,
compared to $2,108.3 million for the year ended December 31, 2021. This increase was driven by favorable
market conditions and higher coal price indices, which resulted in a higher average realized Met price per Mt sold
for the year ended December 31, 2022 of $265.8, compared to $138.0 per Mt sold for the same period in 2021.
This increase was partially offset by 1.8 MMt lower Met coal sales volume compared to the year ended December
31,2021, primarily a result of above average rainfall impacting production at our Australian Operations.
Cost of coal revenues (exclusive of Items shown separately below)
Cost of coal revenues is 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 $1,515.6 million for the year ended December 31, 2022, an increase of $320.3
million, or 26.8%, compared to $1,195.3 million for the year ended December 31, 2021. Cost of coal revenues
for our U.S. Operations increased $171.3 million during the year ended December 31, 2022, driven by the impact
of inflation on labor and supply costs, adverse geological conditions in certain mines of our U.S. Operations
resulting in unplanned maintenance costs, and increased purchased coal transactions to meet certain sales
commitments. Cost of coal revenues for our Australian Operations for the year ended December 31, 2022
increased $149.1 million, largely due to additional fleets mobilized to accelerate overburden removal, inflationary
pressure on fuel pricing and labor costs and increased purchased coal transactions to meet sales commitments.
Higher costs were partially offset by a favorable average foreign exchange rate on translation of the Australian
Operations for the year ended December 31, 2022, of A$/US$: 0.70 compared to 0.75 for the same period in
2021.
Coronado Global Resources Inc. Form 10-K December 31, 2022 104
Depreciation, depletion and amortization
Depreciation, depletion and amortization were $167.0 million for the year ended December 31, 2022, a decrease
of $10.8 million, compared to $177.9 million for the year ended December 31, 2021. The decrease was
associated with a favorable average foreign exchange rate on translation of the Australian Operations, partially
offset by depreciation on equipment brought into service during the year ended December 31, 2022.
Freight expenses
Freight expenses of $249.1 million for the year ended December 31, 2022, increased by $7.2 million, compared
to $241.9 million for the year ended December 31, 2021. Our U.S. Operations contributed $15.9 million to the
increase, due to certain contracts for which we arrange and pay for transportation to port that did not exist to the
same extent in 2022 combined with higher rail freight rates due the impact of inflationary pressures in the market,
partially offset by the benefits of lower average foreign exchange rate on translation of freight cost from Australian
Operations.
Stanwell rebate
The Stanwell rebate was $166.0 million for the year ended December 31, 2022, an increase of $110.6 million,
compared to $55.4 million for the year ended December 31, 2021. The increase was largely driven by higher
realized export reference coal pricing for the prior twelve-month period used to calculate the rebate, partially
offset by the favorable average foreign exchange rate on translation of the Australian Operations.
Other royalties
Other royalties were $385.1 million for the year ended December 31, 2022, an increase of $242.3 million, as
compared to $142.8 million for the year ended December 31, 2021. Higher royalties were a product of higher
average realized export pricing and the adverse impact of the new Queensland Government royalty regime
applicable from July 1, 2022 to our Australian Operations.
Other, net
Other, net was a gain of $33.8 million in the year ended December 31, 2022, an increase of $40.0 million
compared to a net loss of $6.2 million for the year ended December 31, 2021. The increase largely relates to
foreign exchange gains recognized in the translation of short-term inter-entity balances in certain entities within
the Group that are denominated in currencies other than their respective functional currencies due to the
favorable average foreign exchange rate on translation.
Income tax expense
Income tax expense of $231.6 million for the year ended December 31, 2022, increased by $178.5 million, as
compared to $53.1 million for the year ended December 31, 2021.
The income tax expense for the year ended December 31, 2022 resulted in an annual effective tax rate of 23.8%,
an increase from 21.9% for the year ended December 31, 2021.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020
The Company’s comparison of 2021 results to 2020 results is included in the Company’s
, under Part II Item 7, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations”.
Coronado Global Resources Inc. Form 10-K December 31, 2022 105
Supplemental Segment Financial Data
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Australian Operations
For Year Ended December 31,
(US$ in thousands)
2022
2021
Change
%
Sales Volume (MMt)
10.0
11.3
(1.3)
(12.1)%
Total revenues ($)
2,116,555
1,315,851
800,704
60.9%
Coal revenues ($)
2,078,518
1,279,736
798,782
62.4%
Average realized price per Mt sold ($/Mt)
208.9
113.1
95.8
84.7%
Met sales volume (MMt)
6.5
8.2
(1.7)
(20.7)%
Met coal revenues ($)
1,968,173
1,171,869
796,304
68.0%
Average realized Met price per Mt sold ($/Mt)
303.1
143.1
160.0
111.8%
Mining costs ($)
864,616
736,782
127,834
17.4%
Mining costs per Mt sold ($/Mt)
89.5
67.6
21.9
32.4%
Operating costs ($)
1,575,786
1,111,248
464,538
41.8%
Operating costs per Mt sold ($/Mt)
158.3
98.2
60.1
61.2%
Segment Adjusted EBITDA ($)
541,208
204,992
336,216
164.0%
Coal revenues for Australian Operations for the year ended December 31, 2022, were $2,078.5 million, an
increase of $798.8 million, or 62.4%, compared to $1,279.7 million for the year ended December 31, 2021. This
increase was driven by higher average realized Met price of $303.1 per Mt, an increase of $160.0 per Mt,
compared to $143.1 per Mt sold during the same period in 2021. The higher realized price during the period was
primarily driven by disruption in supply dynamics caused by the conflict between Russia and Ukraine, as well as
supply constraints from key Met coal markets due to unseasonal wet weather and logistical issues. Sales volume
of 10.0 MMt was 1.3 MMt lower compared to 11.3 MMt for the year ended December 31, 2021, mainly driven by
significant unprecedented wet weather events experienced at the Curragh mine during 2022 which significantly
reduced mining activities and coal availability.
Operating costs increased by $464.5 million, or 41.8%, for the year ended December 31, 2022, compared to the
year ended December 31, 2021. The increase was driven by a higher mining costs, higher Stanwell rebate
(mainly due to higher realized coal pricing) and greater royalties, due to higher coal revenues and the adverse
impact of the amended royalty. Mining costs were $127.8 million, or 17.4%, higher for the year ended December
31, 2022 compared to the same period in 2021, primarily due to inflationary pressures and additional contractor
fleets mobilized during the first half of 2022 at our Australian Operations, partially offset by favorable average
foreign exchange on translation of our Australian Operations. Increased costs combined with lower sales volumes
resulted in higher Mining and Operating costs per Mt sold of $89.5 and $158.3, respectively, an increase of $21.9
and $60.1, respectively, compared to the same period in 2021.
For the year ended December 31, 2022, Segment Adjusted EBITDA was $541.2 million, an increase of $336.2
million compared to Segment Adjusted EBITDA of $205.0 million for the year ended December 31, 2021. This
increase was primarily driven by higher coal revenues partially offset by higher operating costs.
Coronado Global Resources Inc. Form 10-K December 31, 2022 106
United States
For Year Ended December 31,
(US$ in thousands)
2022
2021
Change
%
Sales Volume (MMt)
6.4
6.4
—
(0.1)%
Total revenues ($)
1,454,987
832,620
622,367
74.7%
Coal revenues ($)
1,449,108
828,595
620,513
74.9%
Average realized price per Mt sold ($/Mt)
225.2
128.6
96.6
75.1%
Met sales volume (MMt)
6.2
6.3
(0.1)
(1.7)%
Met coal revenues ($)
1,394,880
822,000
572,880
69.7%
Average realized Met price per Mt sold ($/Mt)
226.5
131.2
95.3
72.6%
Mining costs ($)
531,812
392,362
139,450
35.5%
Mining costs per Mt sold ($/Mt)
86.5
62.3
24.2
38.9%
Operating costs ($)
739,940
524,018
215,922
41.2%
Operating costs per Mt sold ($/Mt)
115.0
81.3
33.7
41.5%
Segment Adjusted EBITDA ($)
716,661
312,048
404,613
129.7%
Coal revenues increased by $620.5 million, or 74.9%, to $1,449,1 million for the year ended December 31, 2022,
as compared to $828.6 million for the year ended December 31, 2021. This increase was mainly driven by a
higher average realized Met price per Mt sold for the year ended December 31 , 2022 of $226.5 compared to
$131.2 per Mt sold for the same period in 2021. Higher average realized Met price benefited from strong demand
and supply shortage in the global seaborne export markets and high demand of U.S.-sourced coal into Europe
due to trade restrictions on Russian coal.
Operating costs
increased by $215.9 million, or 41.2%, to $739.9 million for the year ended December 31, 2022,
compared to operating costs of $524.0 million for the year ended December 31, 2021 driven by higher mining
costs, royalties, freight expenses and increase in purchase d coal to meet sales commitments. Higher operating
costs were largely driven by increase in mining costs of $139.5 million, or 35.5%. compared to the same period
in 2021, as a result of adverse geological conditions causing higher maintenance costs, higher subcontractor’s
costs due to labor shortages and overall inflationary pressures on labor, materials and supplies.
Segment Adjusted EBITDA of $716.7 million for the year ended December 31, 2022 increased by $404.6 million,
or
129.7%, compared to $312.0 million for the year ended December 31, 2021. This increase
was primarily driven
by a higher average realized Met price per Mt sold, partially offset by higher operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
For Year Ended December 31,
(US$ in thousands)
2022
2021
Change
%
Selling, general, and administrative expenses
42,499
30,666
11,833
38.6%
Other, net
(254)
241
(495)
(205.4)%
Total Corporate and Other Adjusted EBITDA
42,245
30,907
11,338
36.7%
Corporate and other costs increased $11.3 million to $42.2 million for the year ended December 31, 2022,
compared to $30.9 million for the year ended December 31, 2021. The increase in selling, general, and
administrative expenses was largely driven by inflationary pressures on corporate and labor costs, corporate
activities resuming to pre-COVID-19 pandemic levels and timing or certain corporate costs.
Coronado Global Resources Inc. Form 10-K December 31, 2022 107
Mining and operating costs for the Year Ended December 31, 2022 compared to Year December 31, 2021
A reconciliation of segment costs and expenses, segment operating costs, and segment mining costs is shown
below:
For Year Ended December 31, 2022
(US$ in thousands)
Australia
United States
Other /
Corporate
Total
Consolidated
Total costs and expenses
1,658,105
823,529
43,637
2,525,271
Less: Selling, general and administrative expense
(24)
—
(42,475)
(42,499)
Less: Depreciation, depletion and amortization
(82,295)
(83,589)
(1,162)
(167,046)
Total operating costs
1,575,786
739,940
—
2,315,726
Less: Other royalties
(330,503)
(54,562)
—
(385,065)
Less: Stanwell rebate
(165,995)
—
—
(165,995)
Less: Freight expenses
(153,068)
(96,013)
—
(249,081)
Less: Other non-mining costs
(61,604)
(57,553)
—
(119,157)
Total mining costs
864,616
531,812
—
1,396,428
Sales Volume excluding non-produced coal (MMt)
9.7
6.1
—
15.8
Mining cost per Mt sold ($/Mt)
89.5
86.5
—
88.4
For Year Ended December 31, 2021
(US$ in thousands)
Australia
United States
Other /
Corporate
Total
Consolidated
Total costs and expenses
1,202,807
611,611
31,689
1,846,107
Less: Selling, general and administrative expense
—
—
(30,666)
(30,666)
Less: Restructuring costs
(2,300)
—
—
(2,300)
Less: Depreciation, depletion and amortization
(89,259)
(87,593)
(1,023)
(177,875)
Total operating costs
1,111,248
524,018
—
1,635,266
Less: Other royalties
(117,001)
(25,750)
—
(142,751)
Less: Stanwell rebate
(55,403)
—
—
(55,403)
Less: Freight expenses
(161,703)
(80,159)
—
(241,862)
Less: Other non-mining costs
(40,359)
(25,747)
—
(66,106)
Total mining costs
736,782
392,362
—
1,129,144
Sales Volume excluding non-produced coal (MMt)
10.9
6.3
—
17.2
Mining cost per Mt sold ($/Mt)
67.6
62.3
—
65.7
Average realized Met price for the Year Ended December 31, 2022 compared to Year December 31, 2021
A reconciliation of the Company’s average realized Met coal revenue is shown below:
For Year Ended December 31,
(US$ in thousands)
2022
2021
Change
%
Met sales volume (MMt)
12.7
14.5
(1.8)
(12.4)%
Met coal revenues ($)
3,363,053
1,993,869
1,369,184
68.7%
Average realized met price per Mt sold ($/Mt)
265.8
138.0
127.8
92.6%
Coronado Global Resources Inc. Form 10-K December 31, 2022 108
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
For year ended December 31,
(US$ in thousands)
2022
2021
2020
Reconciliation to Adjusted EBITDA:
Net income (loss)
771,703
189,423
(226,537)
Add: Depreciation, depletion and amortization
167,046
177,875
191,189
Add: Interest expense, net
67,632
68,062
50,585
Add: Other foreign exchange (gains) losses
(32,259)
7,049
1,175
Add: Loss on debt extinguishment
5,336
8,477
—
Add: Income tax expense (benefit)
231,574
53,102
(60,016)
Add: Impairment of assets
—
—
78,111
Add: Restructuring costs
—
2,300
—
Add: Losses on idled assets held for sale
771
2,732
9,994
Add: Gain on disposal of asset held for sale
—
(14,845)
—
Add: Increase (decrease) in provision for discounting
and credit losses
3,821
(8,042)
9,298
Adjusted EBITDA
1,215,624
486,133
53,799
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 availability under the ABL Facility.
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, business or assets acquisitions and payment of
dividends. Based on our outlook for the next twelve months and beyond, which is subject to continually changing
demand from our customers, volatility in coal prices, ongoing interruptions and uncertainties surrounding China’s
import restrictions, such as trade barriers imposed by China on Australian sourced coal and the uncertainty of
impacts from the Russia and Ukraine war on the global supply chain, we believe expected cash generated from
operations together with available borrowing 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.
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 and competitive conditions and other risks
described in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K.
Liquidity as of December 31, 2022 and December 31, 2021 was as follows:
December 31,
(US$ in thousands)
2022
2021
Cash, excluding restricted cash
334,378
437,679
Availability under ABL Facility
(1)
100,000
100,000
Total
434,378
537,679
(1)
ABL Facility is less than $17.5 million for five consecutive business days or less than $15.0 million on any business day.
Coronado Global Resources Inc. Form 10-K December 31, 2022 109
Our total indebtedness as of December 31, 2022 and December 31, 2021 consisted of the following:
(US$ in thousands)
2022
2021
Interest bearing liabilities, excluding current installments
242,326
315,000
Current installments of other financial liabilities and finance lease obligations
4,585
8,634
Other financial liabilities and finance lease obligations, excluding current
installments
8,336
14,031
Total
255,247
337,665
Liquidity
As of December 31, 2022, available liquidity was $434.4 million, comprising of cash and cash equivalents
(excluding restricted cash) of $334.4 million and $100.0 million of available borrowings under our ABL Facility.
Coronado continues to actively review plans for reducing operating, corporate and capital expenditures to ensure
sufficient available liquidity during periods of uncertainty and volatility.
Cash
Cash is held in a 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 is invested in short-
term interest-bearing deposit accounts or used to repay interest bearing liabilities.
Senior Secured Notes
As of December 31, 2022, the outstanding principal amount of our 10.750% Senior Secured Notes due 2026, or
the Notes, was $242.3
million. Interest on the Notes is payable semi-annually in arrears on May 15 and November
15 of each year. The Notes mature on May 15, 2026 and are senior secured obligations of the Company.
The 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) a first-priority lien on
substantially all of the Company’s assets and the assets of the other Guarantors (other than accounts receivable
and other rights to payment, inventory, intercompany indebtedness, certain general intangibles and commercial
tort claims, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds
and products of each of the foregoing, or, collectively, the ABL Collateral), or the Notes Collateral, and (ii) a
second-priority lien on the ABL Collateral, which is junior to a first-priority lien, for the benefit of the lenders under
the ABL Facility.
The terms of the 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.
The Company may redeem some or all of the Notes at the redemption prices and on the terms specified in the
Indenture. In addition, the Company may, from time to time, seek to retire or purchase outstanding debt through
open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon
such terms and at such prices as the Company may determine, and will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other factors.
As of December 31, 2022, we were in compliance with all applicable covenants under the Indenture.
Partial Redemption of Notes
On November 23, 2022, the Company exercised its optional redemption rights and redeemed $35.0 million, or
10.0%, of the original aggregate principal amount of its Notes at a redemption price equal to 103% of the principal
amount of the Notes, plus accrued and unpaid interest on the Notes to, but not including, the date of redemption.
For the year ended December 31, 2022, in connection with the dividends paid in the period, we offered to
purchase the Notes pursuant to the terms of the Indenture. In connection with the above offers, we purchased
an aggregate principal amount, for accepted offers, of $37.7 million at a price equal to 104% of the principal
amount of the Notes, plus accrued and unpaid interest on the Notes to, but not including, the date of redemption.
Coronado Global Resources Inc. Form 10-K December 31, 2022 110
ABL Facility
The ABL Facility, dated May 12, 2021, is for an aggregate multi-currency lender commitment of up to $100.0
million, including a $30.0 million sublimit for the issuance of letters of credit and $5.0 million for swingline loans,
at any time outstanding, subject to borrowing base availability. The ABL Facility matures on May 12, 2024.
Borrowings under the ABL Facility bear interest at a rate equal to a BBSY rate plus an applicable margin.
As at December 31, 2022, no amounts were drawn and no letters of credit were outstanding under the ABL
Facility.
As of December 31, 2022, we were in compliance with all applicable covenants under the ABL Facility.
Bank Guarantees and Surety Bonds
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, we generally use surety bonds for
post-mining reclamation. We can also use bank letters of credit to collateralize certain other obligations. As of
December 31, 2022, we had outstanding surety bonds of $34.9 million and letters of credit of $16.8 million issued
from our available bank guarantees, to meet contractual obligations under workers compensation insurance and
to secure various obligations and commitments. Future regulatory changes relating to these obligations could
result in increased obligations, additional costs or additional collateral requirements.
For the Australian Operations, we had bank guarantees outstanding of $27.3 million at December 31, 2022,
primarily in respect of certain rail and port arrangements of the Company.
As of December 31, 2022, we had outstanding bank guarantees of $44.1 million to secure various obligations
and commitments. The Company provided cash, in the form of deposits, as collateral against these bank
guarantees.
Dividend
During the year ended December 31, 2022, we paid $700.2 million in dividends to stockholders or CDI holders
on the ASX, net of $1.4 million foreign exchange gain on payment of dividends to certain CDI holders that
elected to be paid in Australian dollars.
On February 21, 2023, our Board of Directors declared a bi-annual fully franked fixed ordinary dividend of $8.4
million, or 0.5 cents per CDI. The Company is not required to make an offer to purchase Notes in relation to this
dividend due to the available unaccepted portion of the offer to purchase Notes made in connection with special
dividends declared on October 30, 2022. The dividend will have a record date of March 15, 2023, Australia time,
and be payable on April 5, 2023, Australia time. The ordinary dividend will be funded from available cash.
Capital Requirements
Our main uses of cash have historically been the funding of our operations, working capital, capital expenditure,
the payment of interest and dividends. We intend to use cash to fund debt service payments on our Notes, the
ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, partial
redemption of the Notes, business or assets acquisitions and, if declared, payment of dividends.
Coronado Global Resources Inc. Form 10-K December 31, 2022 111
Historical Cash Flows
The following table summarizes our cash flows for the year ended December 31, 2022, 2021 and 2020 as
reported in the accompanying Consolidated Financial Statements:
Cash Flow
For Year Ended December 31,
(US$ in thousands)
2022
2021
2020
Net cash provided by (used in) operating activities
926,643
442,014
(3,000)
Net cash used in investing activities
(208,343)
(134,332)
(114,128)
Net cash (used in) provided by financing activities
(784,251)
80,836
137,526
Net change in cash and cash equivalents
(65,951)
388,518
20,398
Effect of exchange rate changes on cash and restricted cash
(37,351)
3,677
(1,215)
Cash and restricted cash at beginning of period
437,931
45,736
26,553
Cash and restricted cash at end of period
334,629
437,931
45,736
Operating activities
Net cash provided by operating activities was $926.6 million for the year ended December 31, 2022, compared
to a cash provided by in operating activities of $442.0 million for the year ended December 31, 2021. The increase
was primarily driven by higher coal revenues due to an increase in the average realized Met coal pricing partially
offset by higher operating costs and unfavorable working capital movement due to higher trade receivables and
inventories at December 31, 2022.
Net cash provided by operating activities was $442.0 million for the year ended December 31, 2021, compared
to a cash used in operating activities of $3.0 million for the year ended December 31, 2020. The increase in cash
provided by operating activities was driven by favorable movement in working capital and an increase in coal
revenues during the year partially offset by higher operating costs.
Investing activities
Net cash used in investing activities was $208.3 million for the year ended December 31, 2022, compared to
$134.3 million for the year ended December 31, 2021. Cash spent on capital expenditures for the year ended
December 31, 2022 was $199.7 million, of which $79. 4 million is related to the Australian Operations, $119.7
million is related to the U.S. Operations and the remaining $0.6 million for other and corporate. During the year
ended December 31, 2022, a net of $6.5 million of additional deposits were provided as collateral for our U.S.
workers compensation obligations and $2.4 million of the additional security deposit were provided by our
Australian Operations to satisfy contractual requirements in the normal course of business.
Net cash used in investing activities was $134.3 million for the year ended December 31, 2021, compared to
$114.1 million for the year ended December 31, 2020. Cash spent on capital expenditures for the year ended
December 31, 2021 was $89.7 million, of which $37.9 million is related to the Australian Operations, $50.1 million
related to the U.S. Operations and the remaining $1.6 million for other and corporate. During the year ended
December 31, 2021, a net of $73.7 million of additional deposits were provided as collateral for bank guarantees
and our U.S. workers compensation obligations. Partially offsetting the cash used, was net proceeds of $27.5
million generated during the year ended December 31, 2021 from the sale of Amonate.
Financing activities
Net cash used in financing activities was $784.3 million for the year ended December 31, 2022, compared to
cash provided by financing activities of $80.8 million for the year ended December 31, 2021. The net cash used
in financing activities for the year ended December 31, 2022, included dividend payments of $700.2
million, net
of a $1.4 million foreign exchange gain on settlement of dividends for shareholders who elected to be paid in
Australian dollars , $72.7 million of Notes redeemed and $2.6 million of premium paid on redemption, and the
remainder related to repayment of other financial liabilities.
Net cash provided by financing activities was $80.8 million for the year ended December 31, 2021, compared to
$137.5 million for the year ended December 31, 2021. Included in the net cash provided by financing activities
for the year ended December 31, 2021, were net proceeds from borrowings of $396.3 million, repayment of
borrowings of $413.2 million and net proceeds from the stock issuance of $97.7 million.
Coronado Global Resources Inc. Form 10-K December 31, 2022 112
Contractual Obligations
The following is a summary of our contractual obligations at December 31, 2022:
Payments Due By Year
Less than
1
‑
3
‑
More than
(US$ in thousands)
Total
1 Year
Years
Years
5 Years
Long
‑
term debt obligations
(1)
12,964
4,543
8,421
—
—
Senior secured notes
(2)
242,326
—
—
242,326
—
Mineral lease commitments
(3)
52,742
5,493
10,623
10,228
26,398
Operating and finance lease commitments
27,099
9,102
11,644
6,353
—
Unconditional purchase obligations
(4)
28,601
28,601
—
—
—
Take
‑
or
‑
pay contracts
(5)
932,701
96,734
203,116
206,564
426,287
Total contractual cash obligations
1,296,433
144,473
233,804
465,471
452,685
(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 Senior Secured Notes. Refer to 17 “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 27 “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 2023.
(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 $138.5 million as of December 31, 2022.
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, or Audit 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
Our non-financial assets valuations are primarily comprised of our determination of the estimated fair value
allocation of net tangible and intangible assets, our annual assessment of the recoverability of our goodwill and
our evaluation of the recoverability of our other long-lived assets upon certain triggering events.
Long-Lived Assets
We review the carrying value of intangible assets with definite lives and other 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 113
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,
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.
At December 31, 2022, we determined, based on our qualitative assessment, that no impairment indicators
existed.
Goodwill Impairment
We had a balance of goodwill of $28.0 million recorded at December 31, 2022, 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, 2022, we did not perform a quantitative impairment assessment as we determined,
based on our qualitative assessment, that no impairment indicators existed.
Assets held for sale
As of December 31, 2022, the assets and liabilities held for sale represent the fair value of the Greenbrier mining
asset, which may be realized through a potential sale within the next 12 months.
The fair value of the Greenbrier mining asset was primarily driven by indicative offers and Level 3 inputs such as
estimates of future cash flows which aligns to the Company’s best estimate of future market and operating
conditions, including its current life of mine plan. The life of mine plan includes assumptions in relation to coal
price forecasts, projected mine production volumes, operating costs, capital costs and discount rate.
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, 2022. In addition, state agencies monitor compliance with the mine
plans, including reclamation.
Coronado Global Resources Inc. Form 10-K December 31, 2022 114
We record the fair value of additions to our asset retirement obligations using the present value of projected
future cash flows discounted using a credit-adjusted risk-free rate, with an equivalent amount recorded as a
long-lived asset. 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.
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
Coronado Global Resources Inc. Form 10-K December 31, 2022 115
Financial Statements or tax returns for each taxing jurisdiction in which we operate. This process requires our
management to make judgments regarding the timing and probability of the ultimate tax impact of the various
agreements and transactions that we enter into. 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, 2022 116
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. Recently, in the second quarter of 2022, seaborne prices reached
record levels with both the Australian and U.S. Met coal price indices exceeding $600 per Mt, largely as result of
supply concerns in key Met coal markets and continued trade flow disruptions caused by geopolitical tensions
following Russian invasion of Ukraine. 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
Additionally, access to international markets may be subject to ongoing interruptions and trade barriers due to
policies and tariffs of individual countries. For example, the imposition of restrictions by China on Australian coal
into the Country, may in the future have a negative impact on our profitability. We may or may not be able to
access alternate markets for our coal should additional interruptions and trade barriers occur in the future. An
inability for Met coal suppliers to access international markets, including China, 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 in our Australian Operations 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, 2022, we had $13.7 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 $1.4
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, 2022 117
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). 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 fiscal year 2023 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 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, 2022, we had $255.2 million of fixed-rate borrowings and Notes and there were
no variable-rate borrowings outstanding.
We currently do not hedge against interest rate fluctuations.
Foreign Exchange Risk
A significant portion of our sales are denominated in US$. 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. In 2022, greater than 60% of expenses incurred at our Australian Operations were
denominated in A$. Approximately 40% of our Australian Operations’ purchases were made with reference to
US$, 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 have increased reported total costs and expenses by
approximately $99.0 million for the year ended December 31, 2022.
Under normal market conditions, we generally do not consider it necessary to hedge our exposure to this foreign
exchange risk. However, there may be specific commercial circumstances, such as the hedging of significant
capital expenditure, acquisitions, disposals and other financial transactions, where we may deem foreign
exchange hedging as appropriate and where a US$ 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.
Coronado Global Resources Inc. Form 10-K December 31, 2022 118
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.
As of December 31, 2022, we had financial assets of $838.8 million, comprising of cash and restricted cash,
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 $5.1 million was recorded as of December 31, 2022. See item 8. Financial Statements and
Supplementary Data—Note 9. Provision for Discounting and Credit Losses.
Coronado Global Resources Inc. Form 10-K December 31, 2022 119
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
Page
Number
120
121
122
123
124
1435
)
159
Coronado Global Resources Inc. Form 10-K December 31, 2022 120
Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
December 31,
2022
December 31,
2021
Current assets:
Cash and restricted cash
$
334,629
$
437,931
Trade receivables, net
8
409,979
271,923
Inventories
10
158,018
118,922
Other current assets
13
60,188
47,647
Assets held for sale
4
26,214
27,023
Total current assets
989,028
903,446
Non-current assets:
Property, plant and equipment, net
11
1,389,548
1,397,363
Right of use asset – operating leases, net
15
17,385
13,656
Goodwill
12
28,008
28,008
Intangible assets, net
12
3,311
3,514
Restricted deposits
28
89,062
80,981
Deferred income tax assets
24
—
14,716
Other non-current assets
13
33,585
19,728
Total assets
$
2,549,927
$
2,461,412
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
61,780
$
97,514
Accrued expenses and other current liabilities
14
343,691
270,942
Income tax payable
24
119,981
25,612
Asset retirement obligations
16
10,646
9,414
Contract obligations
19
40,343
39,961
Lease liabilities
15
7,720
8,452
Other current financial liabilities
18
4,458
8,508
Liabilities held for sale
4
12,241
12,113
Total current liabilities
600,860
472,516
Non-current liabilities:
Asset retirement obligations
16
127,844
110,863
Contract obligations
19
94,525
141,188
Deferred consideration liability
20
243,191
230,492
Interest bearing liabilities
17
232,953
300,169
Other financial liabilities
18
8,268
13,822
Lease liabilities
15
15,573
12,894
Deferred income tax liabilities
24
95,671
75,750
Other non-current liabilities
27,952
26,216
Total liabilities
$
1,446,837
$
1,383,910
Common stock $
0.01
1,000,000,000
167,645,373
December 31, 2021
1,677
1,677
Series A Preferred stock $
0.01
100,000,000
1
Share issued and outstanding as of December 31, 2022 and December 31,
2021
—
—
Additional paid-in capital
1,092,282
1,089,547
Accumulated other comprehensive losses
26
(91,423)
(44,228)
Retained earnings
100,554
30,506
Total stockholders’ equity
1,103,090
1,077,502
Total liabilities and stockholders’ equity
$
2,549,927
$
2,461,412
See accompanying notes to consolidated financial statements.
Coronado Global Resources Inc. Form 10-K December 31, 2022 121
Consolidated Statements of Operations and Comprehensive Income
(In US$ thousands, except share data)
Year ended December 31,
Note
2022
2021
2020
Revenues:
Coal revenues
$
3,527,626
$
2,010,996
$
1,289,010
Coal revenues from related parties
29
—
97,335
134,589
Other revenues
43,916
40,140
38,663
Total revenues
3
3,571,542
2,148,471
1,462,262
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
1,515,585
1,195,250
1,014,879
Depreciation, depletion and amortization
167,046
177,875
191,189
Freight expenses
249,081
241,862
185,863
Stanwell rebate
165,995
55,403
103,039
Other royalties
385,065
142,751
84,891
Selling, general, and administrative expenses
42,499
30,666
30,352
Restructuring costs
—
2,300
—
Total costs and expenses
2,525,271
1,846,107
1,610,213
Other income (expenses):
Interest expense, net
(67,632)
(68,062)
(50,585)
Loss on debt extinguishment
(5,336)
(8,477)
—
Impairment of assets
5
—
—
(78,111)
(Increase) decrease in provision for discounting and
credit losses
9
(3,821)
8,042
(9,298)
Gain on disposal of asset held for sale
4
—
14,845
—
Other, net
6
33,795
(6,187)
(608)
Total other expense, net
(42,994)
(59,839)
(138,602)
Income (loss) before tax
1,003,277
242,525
(286,553)
Income tax (expense) benefit
24
(231,574)
(53,102)
60,016
Net income (loss)
771,703
189,423
(226,537)
Less: Net loss attributable to noncontrolling
interest
—
(2)
(69)
Net income (loss) attributable to Coronado Global
Resources Inc.
$
771,703
$
189,425
$
(226,468)
Other comprehensive income, net of income taxes:
Foreign currency translation adjustment
26
(47,195)
(17,451)
21,488
Net gain (loss) on cash flow hedges, net of tax
26
—
2,029
(5,088)
Total other comprehensive (loss) income
(47,195)
(15,422)
16,400
Total comprehensive income (loss)
724,508
174,001
(210,137)
Less: Net loss attributable to noncontrolling
interest
—
(2)
(69)
Total comprehensive income (loss) attributable to
Coronado Global Resources Inc.
$
724,508
$
174,003
$
(210,068)
Earnings (loss) per share of common stock
Basic
7
4.60
1.21
(2.04)
Diluted
7
4.60
1.21
(2.04)
See accompanying notes to consolidated financial statements.
Coronado Global Resources Inc. Form 10-K December 31, 2022 122
Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
paid in
capital
Accumulated
other
comprehensive
losses
Retained
earnings
(Accumulated
losses)
Noncontrolling
interest
Total
stockholders'
equity
Shares
Amount
Series A
Amount
Balance December 31, 2019
96,651,692
$
967
1
$
—
$
820,247
$
(45,206)
$
91,712
$
221
$
867,941
Net loss
—
—
—
—
—
—
(226,468)
(69)
(226,537)
Other comprehensive income (net of
$
2,108
—
—
—
—
—
16,400
—
—
16,400
Total comprehensive income (loss)
—
—
—
—
—
16,400
(226,468)
(69)
(210,137)
Issuance of common stock, net
41,736,198
417
—
—
171,168
—
—
—
171,585
Stock-based compensation for equity
classified awards
—
—
—
—
1,637
—
—
—
1,637
Dividends
—
—
—
—
—
—
(24,163)
—
(24,163)
Balance December 31, 2020
138,387,890
$
1,384
1
$
—
$
993,052
$
(28,806)
$
(158,919)
$
152
$
806,863
Net income (loss)
—
—
—
—
—
—
189,425
(2)
189,423
Other comprehensive income (net of
$
870
—
—
—
—
—
(15,422)
—
—
(15,422)
Total comprehensive (loss) income
—
—
—
—
—
(15,422)
189,425
(2)
174,001
Issuance of common stock, net
29,257,483
293
—
—
97,448
—
—
—
97,741
Stock-based compensation for equity
classified awards
—
—
—
—
(250)
—
—
—
(250)
Acquisition of non-controlling interest
—
—
—
—
(703)
—
—
(150)
(853)
Balance December 31, 2021
167,645,373
$
1,677
1
$
—
$
1,089,547
$
(44,228)
$
30,506
$
—
$
1,077,502
Net income
—
—
—
—
—
—
771,703
—
771,703
Other comprehensive loss
—
—
—
—
—
(47,195)
—
—
(47,195)
Total comprehensive (loss) income
—
—
—
—
—
(47,195)
771,703
—
724,508
Stock-based compensation for equity
classified awards
—
—
—
—
2,735
—
—
—
2,735
Dividends
—
—
—
—
—
—
(701,655)
—
(701,655)
Balance December 31, 2022
167,645,373
$
1,677
1
$
—
$
1,092,282
$
(91,423)
$
100,554
$
—
$
1,103,090
See accompanying notes to consolidated financial statements
Coronado Global Resources Inc. Form 10-K December 31, 2022 123
Consolidated Statements of Cash Flows
(In US$ thousands)
Year Ended December 31,
2022
2021
2020
Cash flows from operating activities:
Net income (loss)
$
771,703
$
189,423
$
(226,537)
Adjustments to reconcile net income to cash and restricted cash provided by
operating activities:
Depreciation, depletion and amortization
165,503
175,814
197,162
Impairment of Assets
—
—
78,111
Amortization of right of use asset - operating leases
6,704
8,899
13,285
Amortization of deferred financing costs
1,933
3,133
5,546
Non-cash interest expense
31,362
29,120
22,410
Amortization of contract obligations
(36,519)
(33,967)
(33,172)
Loss on disposal of property, plant and equipment
855
415
131
Decrease in contingent royalty consideration
—
—
(1,543)
Gain on operating lease derecognition
—
—
(1,184)
Equity-based compensation expense (gain)
2,735
(250)
1,637
Loss on debt extinguishment
5,336
8,477
—
Deferred income taxes
40,423
24,417
(11,247)
Reclamation of asset retirement obligations
(4,543)
(4,273)
(2,859)
Change in estimate of asset retirement obligation
1,543
2,061
(5,973)
Gain on disposal of asset held for sale
—
(14,845)
—
Increase (decrease) in provision for discounting and credit losses
3,821
(8,042)
9,298
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables, net
(156,818)
(33,545)
(38,025)
Inventories
(41,243)
(9,637)
53,652
Other current assets
(12,365)
24,573
(1,921)
Accounts payable
(27,664)
24,166
6,833
Accrued expenses and other current liabilities
84,041
64,285
(27,829)
Operating lease liabilities
(8,244)
(10,986)
(15,329)
Income tax payable
96,326
—
—
Change in other liabilities
1,754
2,776
(25,446)
Net cash provided by (used in) operating activities
926,643
442,014
(3,000)
Cash flows from investing activities:
Capital expenditures
(199,716)
(89,661)
(117,856)
Proceeds from the disposal of property, plant, and equipment
318
1,594
—
Proceeds from disposal of assets held for sale
—
27,451
—
Purchase of restricted deposits
(9,761)
(103,997)
(2,302)
Redemption of restricted deposits
816
30,281
6,030
Net cash used in investing activities
(208,343)
(134,332)
(114,128)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial liabilities
—
411,524
216,953
Debt issuance costs and other financing costs
—
(15,263)
(2,955)
Principal payments on interest bearing liabilities and other financial liabilities
(81,310)
(412,046)
(221,414)
Call premiums paid on early redemption of debt
(2,557)
(1,050)
—
Principal payments on finance lease obligations
(140)
(70)
(2,481)
Dividends paid
(700,244)
—
(24,162)
Proceeds from stock issuance, net
—
97,741
171,585
Net cash (used in) provided by financing activities
(784,251)
80,836
137,526
Net (decrease) increase in cash and restricted cash
(65,951)
388,518
20,398
Effect of exchange rate changes on cash and restricted cash
(37,351)
3,677
(1,215)
Cash and restricted cash at beginning of period
437,931
45,736
26,553
Cash and restricted cash at end of period
$
334,629
$
437,931
$
45,736
Supplemental disclosure of cash flow information:
Cash payments for interest
$
36,728
$
33,462
$
23,538
Cash paid (refund) for taxes
$
90,888
$
(16,582)
$
1,955
See accompanying notes to consolidated financial statements
Coronado Global Resources Inc. Form 10-K December 31, 2022 124
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 7 “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 affiliates. 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. Interests in subsidiaries controlled by the Company are
consolidated with any outside stockholder interests reflected as noncontrolling interests. 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 on the Company’s
future operating results, purchase or investment opportunities in the coal mining industry.
Concentration of customers
The Company has a formal written 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 30 to 60 days after invoicing. Invoicing usually occurs after
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
10
% or more
of the Company’s total accounts receivable, or whose revenue individually represented
10
% or more of the
Company’s total revenue.
The following table summarizes any customer whose revenue individually represented
10
% or more of the
Company’s total revenue in the years ended December 31, 2022, 2021 and 2020.
Year Ended December 31,
2022
2021
2020
Xcoal
12%
11%
9%
Tata Steel
19%
17%
17%
For the year ended December 31, 2022, $
1,848.8
52.6
% of total revenues, were attributable to five
customers. In comparison, for the year ended December 31, 2021, $
971.6
46.3
% of total revenues
were attributable to five customers and for the year ended December 31, 2020, $
671.9
47.1
% of total
revenues were attributable to five customers. As of December 31, 2022, the Company had four customers that
accounted for $
212.5
51.6
%, of accounts receivable. As of December 31, 2021, the Company had
four customers that accounted for $
149.2
54.7
%, of accounts receivable.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 125
The following table presents revenues as a percent of total revenue from external customers by geographic
region:
Year Ended December 31,
2022
2021
2020
North America
12%
7%
13%
Australia
4%
6%
6%
Asia
46%
48%
50%
Europe
11%
12%
13%
South America
8%
6%
4%
Brokered sales
19%
21%
14%
Total
100%
100%
100%
The Company uses shipping destination as the basis for attributing revenue to individual countries. Because title
may transfer on brokered transactions at a point that does not reflect the end usage point, they are reflected as
exports, and attributed to an end delivery point if that knowledge is known to the Company.
Concentration of labor
Out of the Company’s total employees,
11.5
% are subject to the Curragh Mine Operations Enterprise Bargaining
Agreement 2019. This agreement covers work carried out by permanent, full-time, temporary, and casual coal
mining employees engaged by Curragh to fulfil production, maintenance and processing activities. Other than
the Curragh Mine Operations Enterprise Bargaining Agreement 2019, 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
During the period there have been no new Accounting Standards Updates issued by the Financial Accounting
Standards Board that had a material impact on the Company’s Consolidated Financial Statements
.
(b) Accounting Standards Not Yet Implemented
To date, there have been no 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 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; deferred income tax assets and liabilities;
values of coal properties; fair value of assets held for sale, workers’ compensation liability and other
contingencies.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 126
(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, Curragh and its immediate parent 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 U.S. dollar 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 $
47.6
1.7
3.2
years ended December 31, 2022, 2021 and 2020, respectively. The total impact of foreign currency transactions
related to U.S. dollar coal sales in Australia (included in the total above) was a net gain of $
15.0
8.7
million and a net loss of $
4.0
(e) Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents include cash at bank and short-term highly liquid investments with an original maturity
date of three months or less. At December 31, 2022 and 2021, the Company had
no
“Cash and Restricted Cash”, as disclosed in the accompanying Consolidated Balance Sheets includes $
0.3
million of restricted cash at December 31, 2022 and $
0.3
(f) Trade Accounts Receivables
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 Expected Credit Losses, or ECL.
For trade receivables carried at amortized cost, the Company determines ECL on a forward-looking basis. 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 Company recognizes the lifetime ECL. 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.
Factoring
The Company has agreements with financial institutions to sell selected trade receivables on a recurring, non-
recourse basis. Under these agreements, trade receivables sold do not allow for recourse for any credit risk
related to the Company’s customers if such receivables are not collected by the third-party financial institutions.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 127
The Company derecognizes the trade receivables sold under the factoring arrangement and the difference
between proceeds received and carrying amount of the trade receivables sold is recognized within “Interest, net”
in its Consolidated Statements of Operations and 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) Assets held for sale
Assets held for sale are measured at the lower of their carrying amount or fair value less costs to sell. The
Company classifies assets and liabilities as held for sale (disposal group) when management, having the authority
to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year and the
disposal group is available for sale in its present condition. The Company also considers whether an active
program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price
that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate
that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. An impairment
test is performed when a disposal group is classified as held for sale and an impairment charge is recorded when
the carrying amount of the disposal group exceeds its estimated fair value, less cost to sell. Depreciation and
amortization for assets classified as held for sale are ceased.
(i) 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
3
10
and transportation vehicles,
5
10
10
20
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, 2022 128
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. Refer to Note 5 “Impairment of Assets” for further disclosure .
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 $
28.0
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.
(j) 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.
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.
(k) 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
no
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 129
(l) Leases
From time to time, the Company enters into mining services contracts which may include embedded leases of
mining equipment and other contractual agreements to lease mining equipment and facilities. 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 Sheet. 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 Sheet. 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.
(m) Royalties
Lease rights to coal lands are often acquired in exchange for royalty payments. Royalties are payable monthly
as a percentage of the gross realization from the sale of the coal mined using surface mining methods and 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 $
6.8
5.5
respectively, included in “Other current assets” as of December 31, 2022 and 2021.
(n) Stanwell Rebate
The Stanwell rebate relates to a contractual arrangement entered into by Curragh with 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 130
(o) 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 are
no
performance obligations at December 31, 2022 and 2021.
Shipping and Handling
The Company accounts for shipping and handling activities on Free on Rail sales after the customer obtains
control of the good as an activity to fulfil the promise to transfer 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.
(p) 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 .
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 131
• enter into derivative financial instruments to hedge exposures to fuel price fluctuations.
There are
no
(q) 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 Curragh entities are treated as a branch for U.S. tax purposes and all
income flows through the ultimate parent (the Company).
(r) 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 categori zed in one of 3 levels of inputs.
Refer to Note 25 “Fair Value Measurement” for detailed information related to the Company’s fair value policies
and disclosures.
(s) Derivative accounting
The Company recognizes at fair value all contracts meeting the definition of a derivative as assets or liabilities in
the Consolidated Balance Sheet.
With respect to derivatives used in hedging activities, the Company assesses, both at inception and at least
quarterly thereafter, whether such derivatives are highly effective at offsetting the changes in the anticipated
exposure of the hedged item. The change in the fair value of derivatives designated as a cash flow hedge and
deemed highly effective is recorded in “Accumulated other comprehensive losses” until the hedged transaction
impacts reported earnings, at which time any gain or loss is reclassified to earnings. If the hedge ceases to qualify
for hedge accounting, the Company prospectively recognizes changes in the fair value of the instrument in
earnings in the period of the change. The potential for hedge ineffectiveness is present in the design of certain
of the Company’s cash flow hedge relationships.
The Company’s asset and liability derivative positions are offset on a counterparty-by-counterparty basis if the
contractual agreement provides for the net settlement of contracts with the counterparty in the event of default or
termination of any one contract.
There are
no
(t) 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
10.1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 132
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 23 “Stock-Based Compensation”
for detailed information related to the Company’s stock-based
compensation plans.
(
u) 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.
(v) Deferred Financing 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. 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.
For information on the unamortized balance of deferred financing fees related to outstanding debt, see Note 17
“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
two
complexes (Buchanan and Logan),
one
two
The Company operates its business along
two
organization of the
two
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, 2022 133
Reportable segment results for the years ended December 31, 2022, 2021 and 2020 are presented below:
(US$ thousands)
Australia
United
States
Other and
Corporate
Total
Year ended December 31, 2022
Total revenues
$
2,116,555
$
1,454,987
$
—
$
3,571,542
Adjusted EBITDA
541,208
716,661
(42,245)
1,215,624
Net income (loss)
328,632
486,817
(43,746)
771,703
Total assets
1,353,424
1,013,359
183,144
2,549,927
Capital expenditures
89,001
95,769
587
185,357
Year ended December 31, 2021
Total revenues
$
1,315,851
$
832,620
$
—
$
2,148,471
Adjusted EBITDA
204,992
312,048
(30,907)
486,133
Net income (loss)
64,278
220,975
(95,830)
189,423
Total assets
1,357,132
822,222
282,058
2,461,412
Capital expenditures
38,733
50,787
1,616
91,136
Year ended December 31, 2020
Total revenues
$
976,369
$
485,893
$
—
$
1,462,262
Adjusted EBITDA
(8,586)
92,801
(30,416)
53,799
Net loss
(66,645)
(77,853)
(82,039)
(226,537)
Total assets
1,307,745
908,361
(67,630)
2,148,476
Capital expenditures
47,456
74,881
1,519
123,856
The reconciliation of Adjusted EBITDA to net income attributable to the Company for the years ended December
31, 2022, 2021 and 2020 are as follows:
Year Ended December 31,
(US$ thousands)
2022
2021
2020
Net income (loss)
$
771,703
$
189,423
$
(226,537)
Depreciation, depletion and amortization
167,046
177,875
191,189
Interest expense, net
67,632
68,062
50,585
Other foreign exchange (gains) losses
(1)
(32,259)
7,049
1,175
Loss on debt extinguishment
5,336
8,477
—
Income tax expense (benefit)
231,574
53,102
(60,016)
Impairment of assets
—
—
78,111
Restructuring costs
—
2,300
—
Losses on idled assets held for sale
(2)
771
2,732
9,994
Gain on disposal of assets held for sale
—
(14,845)
—
Increase (decrease) in provision for discounting
3,821
(8,042)
9,298
Consolidated adjusted EBITDA
$
1,215,624
$
486,133
$
53,799
(1)
Refer to Note 6 “Other, net” for further discussion.
(2)
These losses relate to idled non-core assets that the Company has classified as held for sale with the view that these will be sold within the next
twelve months or were sold in prior periods.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 134
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, 2022, 2021 and
2020 are as follows:
Year Ended December 31,
(US$ thousands)
2022
2021
2020
Capital expenditures per Consolidated Statement of Cash
flows
$
199,716
$
89,661
$
117,856
Payment for capital acquired in prior period
(7,475)
(6,000)
—
Accruals for capital expenditures
11,243
7,475
6,000
Advance payment to acquire long lead capital items
(18,127)
—
—
Capital expenditures per segment detail
$
185,357
$
91,136
$
123,856
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.
Year ended December 31, 2022
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,968,173
$
1,394,880
$
3,363,053
Thermal coal
110,345
54,228
164,573
Total coal revenue
2,078,518
1,449,108
3,527,626
Other
(1)
38,037
5,879
43,916
Total
$
2,116,555
$
1,454,987
$
3,571,542
Year ended December 31, 2021
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,171,869
$
822,000
$
1,993,869
Thermal coal
107,867
6,595
114,462
Total coal revenue
1,279,736
828,595
2,108,331
Other
(1)
36,115
4,025
40,140
Total
$
1,315,851
$
832,620
$
2,148,471
Year ended December 31, 2020
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
836,545
$
476,222
$
1,312,767
Thermal coal
105,681
5,151
110,832
Total coal revenue
942,226
481,373
1,423,599
Other
(1)
34,143
4,520
38,663
Total
$
976,369
$
485,893
$
1,462,262
(1)
Included in Other is the amortization of Stanwell non-market coal supply agreement liability recognized on acquisition of Curragh. See further
discussion in Note 19 “Contract Obligations”.
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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 135
• 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, Logan and Greenbrier coal mine facilities
in Virginia and West Virginia, United States. It produces high, mid and low volatility hard coking coal.
4. Assets Held for Sale
During the fourth quarter of 2020, the Company committed to a plan to sell the Greenbrier asset and determined
that all of the criteria to classify assets and liabilities as held for sale were met. The asset is part of the Company’s
U.S. segment, located in the State of West Virginia, and does not form part of the Company’s core business
strategy. The Greenbrier mining asset has been idle since April 1, 2020.
The following table provides the major classes of assets and liabilities classified as held for sale as of December
31, 2022 and December 31, 2021:
December 31
2022
2021
Inventories, net
—
1,795
Other current assets
2,326
1,706
Property, plant and equipment, net
23,447
23,447
Other noncurrent assets
441
75
Total assets held for sale
$
26,214
$
27,023
Accounts payable
313
426
Accrued expenses and other current liabilities
813
1,344
Current asset retirement obligations
5,137
5,140
Noncurrent asset retirement obligations
5,978
5,203
Total liabilities held for sale
$
12,241
$
12,113
As of December 31, 2022, the assets and liabilities held for sale represent the fair value of the Greenbrier mining
asset, which will likely be realized through a sale within the next 12 months.
The fair value of the Greenbrier mining asset was primarily determined by reference to non-binding indicative
offers and Level 3 inputs such as estimates of future cash flows which aligns to the Company’s best estimate of
future market and operating conditions, including its current life of mine plan. The life of mine plan includes
assumptions in relation to coal price forecasts, projected mine production volumes, operating costs, capital costs
and discount rate.
Sale of the Amonate Mining Asset
On
December 2, 2021
, the Company sold Amonate, including related assets and liabilities, to Ramaco
Resources, Inc., a Delaware corporation, for a purchase price of $
30.0
$
14.8
2.6
Company’s Consolidated Statement of Operations and Comprehensive Income for the year ended December
31, 2021.
5. Impairment of Assets
The Company concluded that no impairment charges were required at any of the Company’s mining assets for
the years ended December 31, 2022 and 2021.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 136
During the year ended December 31, 2020, the Company performed an impairment assessment in accordance
with ASC 360 – Property, Plant and Equipment, and determined that the sum of the estimated undiscounted pre-
tax future cash flows of Greenbrier long-lived assets exceeded its carrying amount. As a result, an impairment
charge of $
78.1
value at that time, which did not include any associated ARO liabilities.
6. Other, net
Other, net consists of the following:
Year Ended December 31,
(US$ thousands)
2022
2021
2020
Other foreign exchange gains (losses)
(1)
$
32,259
$
(7,049)
$
(1,175)
Other income
1,536
862
567
Total Other, net
$
33,795
$
(6,187)
$
(608)
(1)
short-term inter-entity balances between certain entities within the Group that are denominated in currencies
other than their respective functional currencies.
7. Capital Structure
(a) Stockholders’ Equity
Authorized capital stock
The Company’s Articles of Incorporation, as amended, authorize the Company to issue
1,100,000,000
$
0.01
1,000,000,000
100,000,000
preferred stock.
Common Stock / CDIs
The common stock is publicly traded on the ASX under the ticker “CRN,” in the form of CHESS Depositary
Interests (“CDIs). CDIs are units of beneficial ownership in shares of common stock held by CHESS Depositary
Nominees Pty Limited (“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
one
10
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.
The following table summarizes Common Stock activity during the periods presented below:
Year Ended December 31,
2022
2021
2020
Shares outstanding at the beginning of the year
167,645,373
138,387,890
96,651,692
Shares issued during the year
-
29,257,483
41,736,198
Shares outstanding at the end of the year
167,645,373
167,645,373
138,387,890
Coronado Group LLC
As of December 31, 2022, Coronado Group LLC, the Company’s controlling stockholder, beneficially owns
845,061,399
84,506,140
50.4
%
of the total
1,676,453,730
167,645,373
outstanding. The remaining
831,392,331
83,139,233
common stock) are owned by investors in the form of CDIs publicly traded on the ASX.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 137
Refer to Note 23 “Stock-Based Compensation” for options to purchase common stock issued and outstanding as
of December 31, 2022 and 2021.
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 $
1.00
.
(b) Dividends
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, 2022, the Company declared:
• Dividends of $
150.9
0.09
0.90
• Dividends of $
200.1
0.119
1.19
• Dividends of $
125.7
0.075
0.75
and
• Dividends of $
225.0
0.134
1.34
The Company paid a total of $
700.2
1.4
foreign exchange gain on payment of dividends to certain CDI holders that elected to be paid in Australian dollars,
in relation to the above declared dividends.
During the year ended December 31, 2021, the Company did not declare or pay dividends.
During the year ended December 31, 2020, the Company declared a dividend to stockholders and CDI holders
on the ASX of $
24.2
0.025
0.25
March 31, 2020.
(c) Earnings per Share
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.
Basic and diluted earnings per share was calculated as follows (in thousands, except per share data):
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 138
Year Ended December 31,
(US$ thousands, except per share data)
2022
2021
2020
Numerator:
Net income (loss)
$
771,703
$
189,423
$
(226,537)
Less: Net (loss) attributable to Non-controlling interest
—
(2)
(69)
Net income (loss) attributable to Company stockholders
$
771,703
$
189,425
$
(226,468)
Denominator (in thousands):
Weighted-average shares of common stock outstanding
167,645
156,710
111,073
Effects of dilutive shares
201
132
—
Weighted average diluted shares of common stock outstanding
167,846
156,842
111,073
Earnings (Loss) Per Share (US$):
Basic
4.60
1.21
(2.04)
Dilutive
4.60
1.21
(2.04)
8. Trade Receivables, net
The Company extends trade credit to its customers in the ordinary course of business. Trade receivables are
recorded initially at fair value and subsequently at amortized cost, less any ECL.
December 31,
(US$ thousands)
2022
2021
Trade receivables - at amortized cost
$
414,490
$
272,657
Provision for discounting and credit losses (Note 9)
(4,511)
(734)
Trade receivables, net
$
409,979
$
271,923
Xcoal
At December 31, 2022, amounts outstanding from Xcoal in respect of coal sales were $
69.8
$
34.9
Subsequent to December 31, 2022, the Company has collected the Xcoal past due balance in full. The carrying
amount of trade receivables from Xcoal, net of provision for discounting and credit losses of $
2.9
recognized due to the uncertainty surrounding expected timing of collection, was $
65.7
At December 31, 2021, amounts outstanding from Xcoal in respect of coal sales were $
35.2
$
17.9
Subsequent to December 31, 2021, the Company collected Xcoal’s past due balance in full. The carrying amount
of trade receivables from Xcoal, net of provision for discounting and credit losses of $
0.4
34.8
million.
9. 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 and
related party
trade
receivables
Other
Assets
Total
As at January 1, 2021
$
9,298
$
—
$
9,298
Change in estimates during the current period
436
522
958
Unwind of provision for discounting and credit losses
(9,000)
—
(9,000)
As at December 31, 2021
734
522
1,256
Change in estimates during the current period
3,777
44
3,821
As at December 31, 2022
$
4,511
$
566
$
5,077
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 139
10. Inventories
December 31,
(US$ thousands)
2022
2021
Raw coal
$
50,604
$
17,334
Saleable coal
45,913
42,006
Total coal inventories
96,517
59,340
Supplies inventory
61,501
59,582
To
tal inventories
$
158,018
$
118,922
Coal inventories measured at its net realizable value were $
5.0
2.2
and 2021, respectively, and relates to coal designated for deliveries under the Stanwell non-market coal supply
agreement. See further discussion in Note 19 “Contract Obligations”.
11. 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)
2022
2021
Land
$
27,711
$
27,853
Buildings and improvements
91,336
88,079
Plant, machinery, mining equipment and transportation vehicles
1,012,844
963,272
Mineral rights and reserves
373,309
374,326
Office and computer equipment
9,488
8,718
Mine development
565,106
566,201
Asset retirement obligation asset
87,877
75,215
Construction in process
82,713
42,055
To
tal cost of property, plant and equipment
2,250,384
2,145,719
Less accumulated depreciation, depletion and amortization
860,836
748,356
Property, plant and equipment, net
$
1,389,548
$
1,397,363
The amount of depreciation and amortization expense for property, plant and equipment for the years ended
December 31, 2022, 2021 and 2020 was $
155.8
million, $
166.2
187.7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 140
12. Goodwill and Other Intangible Assets
(a) Acquired Intangible Assets
December 31, 2022
(US$ thousands)
Weighted
average
amortization
period (years)
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Intangible assets:
Amortizing intangible assets:
Mining permits - Logan
15
$
1,642
$
990
$
652
Mining permits - Buchanan
28
3,501
842
2,659
Total intangible assets
$
5,143
$
1,832
$
3,311
December 31, 2021
(US$ thousands)
Weighted
average
amortization
period (years)
Gross
carrying
amount
Accumulated
amortization
Net carrying
amount
Intangible assets:
Amortizing intangible assets:
Mining permits - Logan
15
$
1,642
$
912
$
730
Mining permits - Buchanan
28
3,501
717
2,784
Total intangible assets
$
5,143
$
1,629
$
3,514
Amortization expense is charged using the straight-line method over the useful lives of the respective intangible
asset. The aggregate amount of amortization expense for amortizing intangible assets for the years ended
December 31, 2022, 2021 and 2020, were
$
0.2
0.2
0.2
amortization expense for each of the next five years is $
0.2
(b)
Goodwill
In connection with the Buchanan acquisition on March 31, 2016, the Company recorded goodwill in the amount
of $
28.0
December 31, 2022 or 2021. Based upon the Company’s qualitative assessment, it is more likely than not that
the fair value of the reporting unit is greater than the carrying amount at December 31, 2022 and 2021. As a
result,
no
was
$
28.0
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 141
13. Other Assets
December 31,
(US$ thousands)
2022
2021
Other current assets:
$
26,831
$
24,226
7,884
9,136
4,183
4,440
21,290
9,845
Total other current assets
$
60,188
$
47,647
Other non-current assets:
$
3,448
$
3,645
2,463
4,310
585
550
7,269
11,223
18,126
—
1,694
—
Total other non-current assets
$
33,585
$
19,728
The Company has other assets which includes prepayments, favorable mineral leases, deferred debt issue costs,
long service leave receivable, equipment deposits and coalfield employment enhancement tax credit receivable.
The favorable mineral leases are amortized based on the coal tonnage removed from the lease property relative
to the total estimated reserves on that property.
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 deferred issue costs as of December 31, 2022 and 2021, were incurred to establish the ABL Facility (as
described in Note 17 “Interest Bearing Liabilities”) 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.
The tax credits receivable relates 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
85
% 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 142
14. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
December 31,
(US$ thousands)
2022
2021
Wages and employee benefits
$
38,687
$
41,187
Taxes other than income taxes
5,988
6,246
Accrued royalties
117,131
70,237
Accrued freight costs
44,496
27,754
Accrued mining fees
103,492
65,835
Acquisition related accruals
11,669
31,201
Other liabilities
22,228
28,482
$
343,691
$
270,942
Acquisition related accruals is an accrual for the remaining estimated stamp duty payable on the Curragh
acquisition of $
11.7
million (A$
17.3
15. Leases
Information related to Company’s right-of use assets and related lease liabilities are as follows:
Year ended December 31,
(US$ thousands)
2022
2021
Operating lease costs
$
8,088
$
10,863
Cash paid for operating lease liabilities
8,244
10,986
Finance lease costs:
Amortization of right of use assets
304
227
Interest on lease liabilities
20
14
Total finance lease costs
$
324
$
241
December 31,
(US$ thousands)
2022
2021
Operating leases:
Right of use asset – operating leases, net
$
17,385
$
13,656
Finance leases:
Property and equipment
371
404
Accumulated depreciation
(186)
(67)
Property and equipment, net
185
337
Current operating lease obligations
7,593
8,326
Non-current operating lease obligations
15,505
12,685
Total Operating lease liabilities
23,098
21,011
Current finance lease obligations
127
126
Non-current finance lease obligations
68
209
Total Finance lease liabilities
195
335
Current lease obligations
7,720
8,452
Non-current lease obligations
15,573
12,894
Total lease obligations
$
23,293
$
21,346
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 143
December 31,
2022
2021
Weighted Average Remaining Lease Term (Years)
Weighted average remaining lease term – finance leases
1.52
2.54
Weighted average remaining lease term – operating leases
4.11
2.59
Weighted Average Discount Rate
Weighted discount rate – finance lease
7.60%
7.60%
Weighted discount rate – operating lease
8.94%
7.95%
The Company’s leases have remaining lease terms of
1 year
5 years
, some of which include options to extend
the terms deemed reasonable to exercise. Maturities of lease liabilities are as follows:
(US$ thousands)
Operating
Lease
Finance
Lease
Year ending December 31,
2023
$
8,964
$
138
2024
6,112
138
2025
5,325
69
2026
5,214
—
Thereafter
1,139
—
Total lease payments
26,754
345
Less imputed interest
(3,656)
(150)
Total lease liability
$
23,098
$
195
16. 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, a significant amount of the
reclamation will take place in the future when operations cease. There were
no
for purposes of settling asset retirement obligations as of December 31, 2022 and 2021. 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, 2022 and December 31, 2021
were as follows:
(US$ thousands)
December 31,
2022
December 31,
2021
Total asset retirement obligations at beginning of the year
$
120,277
$
122,144
ARO liability additions
1,835
1,642
Accretion
9,066
9,353
Reclamation performed in the year
(3,270)
(3,322)
Gain on settlement of ARO
(53)
(601)
Change in estimate recorded to net income
(2)
1,195
Change in estimate recorded to assets
15,381
(5,444)
Foreign currency translation adjustment
(4,744)
(4,690)
Total Asset retirement obligations at end of the year
138,490
120,277
Less current portion
(10,646)
(9,414)
Asset retirement obligation, excluding current portion
$
127,844
$
110,863
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 144
17.Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities at December 31, 2022:
December 31,
2022
December 31,
2021
Weighted Average
Interest Rate at
December 31, 2022
Final
Maturity
10.75
% Senior Secured Notes
$
242,326
$
315,000
12.14
%
(2)
2026
ABL Facility
—
—
2024
Discount and debt issuance costs
(1)
(9,373)
(14,831)
Total interest bearing liabilities
$
232,953
$
300,169
(1)
Deferred debt issuance costs incurred on the establishment of the ABL Facility has been included within "Other non-current assets" on the
Consolidated Balance Sheets.
(2)
Senior Secured Notes
On May 12, 2021, the Company entered into an indenture, or the Indenture, among Coronado Finance Pty Ltd,
an Australian proprietary company, as the issuer or the Australian Borrower, the Company, as parent guarantor,
the other guarantors party thereto and Wilmington Trust, National Association, as trustee, and as priority lien
collateral trustee, relating to the issuance of
10.750
% Senior Secured Notes due 2026, or the Notes.
Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 of each year to record
holders of the Notes on the immediately preceding May 1 and November 1, as applicable. The Notes mature on
May 15, 2026
The 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) a first-priority lien on
substantially all of the Company’s assets and the assets of the other Guarantors (other than accounts receivable
and other rights to payment, inventory, intercompany indebtedness, certain general intangibles and commercial
tort claims, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds
and products of each of the foregoing, or, collectively, the ABL Collateral), or the Notes Collateral, and (ii) a
second-priority lien on the ABL Collateral, which is junior to a first-priority lien, for the benefit of the lenders under
the Company’s senior secured asset-based revolving credit agreement in an initial aggregate principal amount
of $
100.0
The terms of the 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. As of December 31, 2022,
the Company was in compliance with all applicable covenants under the Indenture.
The Company may redeem some or all of the Notes at the redemption prices and on the terms specified in the
Indenture.
Partial Redemption of Notes
On November 23, 2022, the Company exercised its optional redemption rights and redeemed $
35.0
10.0
%, of the original aggregate principal amount of its Notes at a redemption price equal to
103
% of the principal
amount of the Notes, plus accrued and unpaid interest on the Notes to, but not including, the date of redemption.
The redemption allocation was determined by lot, in compliance with the requirements of the Depository Trust
Company as provided in the Indenture governing the Notes.
During the year ended December 31, 2022, in connection with the dividends paid in the period, the Company
offered to purchase the Notes pursuant to the terms of the Indenture. In connection with the above offers, the
Company purchased an aggregate principal amount, for accepted offers, of $
37.7
104
%
of the principal amount of the Notes, plus accrued and unpaid interest on the Notes to, but not including, the date
of redemption.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 145
In connection to the above redemptions, the Company recorded a “Loss on debt extinguishment” of $
5.3
in the Consolidated Statement of Operations and Comprehensive Income, which represents the premium paid
and a portion of unamortized debt issuance costs and discount on issuance.
ABL Facility
On May 12, 2021, the Company, Coronado Coal Corporation, a Delaware corporation and wholly-owned
subsidiary of the Company, or the U.S. Borrower, the Australian Borrower and the guarantors entered into the
ABL Facility agreement with Citibank, N.A., as administrative agent and a lender, and various other financial
institutions, with an aggregate multi-currency lender commitment of up to $
100.0
30.0
sublimit for the issuance of letters of credit and $
5.0
to borrowing base availability. The ABL Facility matures on
May 12, 2024
.
Revolving loan (and letter of credit) availability under the ABL Facility is subject to a borrowing base, which at
any time is equal to the sum of certain eligible accounts receivable, certain eligible inventory and certain eligible
supplies inventories and, in each case, subject to specified advance rates. The borrowing base is subject to
certain reserves, which may be established by the agent in its reasonable credit discretion, that could reasonably
be expected to have an adverse effect on the value of the collateral included in the borrowing base.
Borrowings under the ABL Facility bear interest at a rate equal to a BBSY rate plus an applicable margin. In
addition to paying interest on the outstanding borrowings under the ABL Facility, the Company is also required
to pay a fee in respect of unutilized commitments, on amounts available to be drawn under outstanding letters of
credit and certain administrative fees.
The obligations of the borrowers under the ABL Facility are guaranteed by (a) a first priority-lien in the ABL
Collateral, (b) a second priority-lien in the Notes Collateral and (c) solely in the case of the obligations of the
Australian Borrower, a featherweight floating security interest over certain accounts released from the security
by the Australian Borrower in favor of Stanwell.
The ABL Facility contains customary covenants for asset-based credit agreements of this type, including, among
others: (i) the requirement to deliver financial statements, other reports and notices; (ii) covenants related to the
payment of dividends on, or purchase or redemption of, capital stock; (iii) covenants related to the incurrence or
prepayment of certain debt; (iv) covenants related to the incurrence of liens or encumbrances; (v) compliance
with laws; (vi) restrictions on certain mergers, consolidations and asset dispositions; and (vii) restrictions on
certain transactions with affiliates. Subject to customary grace periods and notice requirements, the ABL Facility
also contains customary events of default. Additionally, the ABL Facility contains a springing fixed charge
coverage ratio of not less than
1.00
a certain amount. As of December 31, 2022, the Company is not subject to this covenant. As at December 31,
2022, the Company met its undertakings under the ABL Facility.
As at December 31, 2022,
no
no
Facility.
The carrying value of debt issuance costs, recorded as “Other non-current assets” in the Consolidated Balance
Sheets, were $
2.5
4.3
Note 13 “Other Assets”.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 146
18. Other Financial Liabilities
The following is a summary of other financial liabilities:
(US$ thousands)
December 31,
2022
December 31,
2021
Collateralized financial liabilities payable to third-party financing companies
(1)
$
12,726
$
17,794
Unsecured notes payable to insurance premium finance company, payable in
aggregate monthly instalments ranging from $
645
700
ranging up to
2.25
% per annum
—
4,536
Total Other financial liabilities
12,726
22,330
Less: current portion
4,458
8,508
Other non-current financial liabilities
$
8,268
$
13,822
(1)
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 Curragh, 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 its Consolidated Balance Sheet. The proceeds received from the transaction of $
23.5
30.2
million) were recognized as “Other financial liabilities” on the Consolidated Balance Sheet. The term of the financing arrangement ranges up to
five
years
8.1
% per annum. The carrying amount of this financial liability, net of issuance costs, was $
12.7
million and
$
17.8
4.5
4.0
19. 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
$
27.3
estimated coal reserves as they are mined and sold.
In connection with the acquisition of Curragh, the Company assumed the Stanwell non-market coal supply
agreement (CSA) with a fixed pricing component that was effectively below the market price at the date of
acquisition. As a result, on acquisition, the Company recorded a liability of $
307.0
400.0
to the unfavorable pricing of the Stanwell CSA and is amortizing it ratably based on the tons sold through the
contract. The amortization of this liability for the year ended December 31, 2022, 2021 and 2020 were $
36.2
million, $
33.7
32.6
Statements of Operations and Comprehensive Income.
The following is a summary of the contract obligations as of December 31, 2022:
(US$ thousands)
Short-term
Long-term
Total
Coal leases contract liability
$
843
$
19,720
$
20,563
Stanwell below market coal supply agreement
39,500
74,805
114,305
$
40,343
$
94,525
$
134,868
The following is a summary of the contract obligations as of December 31, 2021:
(US$ thousands)
Short-term
Long-term
Total
Coal leases contract liability
$
843
$
20,081
$
20,924
Stanwell below market coal supply agreement
39,118
121,107
160,225
$
39,961
$
141,188
$
181,149
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 147
20. 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 $
155.2
210.0
13
% representing fair value of the arrangements at the date of acquisition. The deferred consideration liability
will reflect passage of time changes by way of an annual accretion at the contractual pre-tax discount rate of
13
%
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 is recognized
in “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Income. The Right-
to-mine-asset will be amortized over the coal reserves mined from the SRA.
December 31,
(US$ thousands)
2022
2021
Stanwell Reserved Area deferred consideration
$
243,191
$
230,492
$
243,191
$
230,492
21. 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 for the years ended December 31, 2022, 2021 and 2020. The
insurance policy covers claims that exceed $
0.5
of $
22.7
million, $
22.0
15.0
the contractual agreements, the Company was required to provide a collateral deposit of $
53.1
years 2017 through 2023, ending May 31, 2023, which is accomplished through providing a combination of letters
of credit and cash collateral in an escrow account.
As of December 31, 2022, the Company has provided $
16.8
million of letters of credit, $
27.1
million of cash collateral and surety bonds of $
6.0
49.9
The remaining collateral is required to be provided by March 31, 2023.
For the years ended December 31, 2022, 2021 and 2020, 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 $
12.2
million, $
12.2
9.5
December 31, 2022 and 2021, the estimated workers’ compensation liability was $
30.1
million and $
29.7
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, 2022 and 2021, $
27.1
million and $
25.3
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.
22. 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
100
% of their qualifying
compensation subject to statutory limitations. The Company matches up to
100
% up to the first
4
% of the
participant’s annual compensation for all employees except for those employed at Buchanan. For employees at
Buchanan, the Company matches up to
100
% of the first
6
% of the participant’s annual compensation. The
Company’s contributions immediately vest. Total Company contributions for the years ended December 31, 2022,
2021 and 2020 amounted to $
3.9
3.3
2.7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 148
In the United States, the Company is self-insured for employee health care claims up to the lesser of $
0.2
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, 2022 and 2021, the Company had
provided accruals of $
1.9
1.7
management’s estimate of the Company’s self-insured liability. For the years ended December 31, 2022, 2021
and 2020, the Company incurred claims, premium expenses and administrative fees related to this plan totaling
$
29.8
25.8
23.9
23. Stock-Based Compensation
Total stock-based compensation expense was $
2.7
0.5
1.6
December 31, 2022, 2021 and 2020 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, 2022 the Company had $
4.1
nonvested stock-based compensation awards granted under the plans. This cost is expected to be recognized
over
3.25
2.38
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
ten
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.
The following awards were granted under the 2018 Plan:
Grant year
Vesting date
(1)
Performance period
Stock Options
PSUs
RSUs
2022
01/01/2023
not applicable
—
—
393,793
2022
01/07/2023
not applicable
—
—
255,284
2022
01/01/2024
not applicable
—
—
151,747
2022
01/07/2024
not applicable
—
—
343,210
2022
31/03/2026
01/01/2022 - 31/12/2024
—
7,471,100
—
2021
31/03/2025
01/01/2021 - 31/12/2023
—
5,998,212
—
2020
31/03/2024
01/01/2020 - 31/12/2022
—
3,203,988
—
2018
31/03/2023
01/01/2019 - 31/12/2021
1,336,454
1,001,914
—
2018
30/12/2019
not applicable
—
—
54,687
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 149
(1)
The Options and PSUs granted that will vest are subject to the achievement of goals over the performance period.
These goals are relative total shareowner 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 comparator group of companies.
Performance metrics applicable to the Options and PSUs granted as summarized below:
Grant year
Relative TSR
Scorecard
TSR
Safety
TSR
Cashflow
Production
Production
2022, 2021 and
2020
33.0%
22.0%
22.0%
22.0%
-
-
2018
25.0%
25.0%
-
-
25.0%
25.0%
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.
RSUs are only subject to service conditions.
Stock Option Awards
The Company’s 2018 stock option awards were granted on the date of the IPO with an exercise price of $
2.84
per CDI (A$
4.00
The Company’s Stock Option activity is summarized below:
Stock Option Plan Activity
2022
2021
2020
Opening at the beginning of the year
1,015,006
1,083,101
1,292,476
Granted
—
—
—
Forfeited
(833,319)
(68,095)
(209,375)
Outstanding at the end of the year
181,687
1,015,006
1,083,101
Exercisable at the end of the year
—
—
—
2022
2021
2020
Weighted-average remaining contractual term (in
years)
0.25
1.25
2.25
The weighted average grant date fair value of all Option Awards granted was $
0.27
. On August 5, 2019, the
Board of Directors declared and approved return of capital of $
0.298
0.440
) per CDI. In accordance with ASX
listing rule clause 7.22.3 the exercise price of option awards granted under 2018 plan were reduced by the same
amount as the return of capital to $
2.41
3.56
).
No
December 31, 2022.
The assumptions used to determine the Options fair value on grant date were as follows:
2018 Grant
Expected term of the stock options (in years) (i)
7.22
Dividend yield (ii)
10%
Expected volatility (iii)
35%
Risk-free interest rate (iv)
2.46%
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 150
(i) Expected term represents the period that the Company’s stock-based awards are expected to be
outstanding and is determined using the simplified method, which equates to a weighted average of the
vesting period and total contractual term of the award. 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) Expected volatility was estimated using comparable public company’s volatility for similar terms as the
Company does not have a long enough operating period as a public company to estimate its own
volatility. Over time as the Company develops its own volatility history it will begin to incorporate that
history into its expected volatility estimates.
(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 option.
The applicable assumptions in determining the fair value of market and performance conditions of the Options
awards were the same.
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
2022
2021
2020
Nonvested at the beginning of the year
8,501,869
4,002,783
988,721
Granted
7,471,100
5,998,212
3,203,988
Forfeited
(1,114,048)
(1,499,126)
(189,926)
Nonvested at the end of the year
14,858,921
8,501,869
4,002,783
2022
2021
2020
Weighted-average grant date fair value (per CDI)
$
0.53
$
0.43
$
0.79
Weighted-average remaining term (in years)
2.54
2.79
3.01
The weighted average grant date fair value of all PSU Awards granted in 2022 was $
0.67
0.89
).
No
vested during the year ended December 31, 2022.
The assumptions used to determine the PSUs fair value on each grant date were as follow:
2022 Grant
2021 Grant
2020 Grant
2018 Grant
Time to maturity (in years) (i)
3.99
3.85
3.49
4.52
Dividend yield (ii)
16.3%
3.0%
1.6%
10.0%
Expected volatility (iii)
60.0%
60.0%
60.0%
35.0%
Risk-free interest rate (iv)
2.66%
0.35%
0.18%
2.23%
(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) For the 2018 grant, the expected volatility was estimated using comparable public company’s volatility
for similar terms as the Company does not have a long enough operating period as a public company to
estimate its own volatility. For the 2020, 2021 and 2022 grants, 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 151
Restricted Stock Units
During the year ended December 31, 2022, the Company issued RSUs to certain employees. These RSUs 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
2022
Nonvested at the beginning of the year
—
Granted
1,144,034
Forfeited
—
Vested
—
Nonvested at the end of the year
1,144,034
2022
Weighted-average grant date fair value (per CDI)
$
1.22
Weighted-average remaining term (in years)
0.70
24. Income Taxes
At December 31, 2021, a company, which is not part of the Australian tax consolidated group, had tax losses
carried forward of $
5.9
The tax losses of $
27.0
were fully utilized in 2022.
The U.S. House of Representatives approved a $740 billion budget reconciliation package that includes a new
minimum tax on certain large corporations, an excise tax on stock buybacks, a significant increase in funding for
the Internal Revenue Service, incentives to promote climate change mitigation and clean energy, and provisions
to promote health care affordability. The Inflation Reduction Act includes a book-minimum tax (AMT) similar to
that originally proposed in the House-approved Build Back Better legislation that would impose a
15
% minimum
tax on “adjusted financial statement income” of applicable corporations over the “corporate AMT foreign tax credit
for the taxable year.” Under the bill, an applicable corporation’s minimum tax would be equal to the amount by
which the tentative minimum tax exceeds the sum of the corporation’s regular tax for the year and the
corporation’s base erosion and anti-abuse tax liability under section 59A. This provision would be effective for
taxable years beginning after December 31, 2022 and it is not expected to apply to the Company.
Income (loss) from continuing operations before income taxes for the periods presented below consisted of the
following:
December 31,
(US$ thousands)
2022
2021
2020
U.S.
$
609,617
$
226,463
$
(116,354)
Non-U.S.
393,660
16,062
(170,199)
Total
$
1,003,277
$
242,525
$
(286,553)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 152
Total
income tax expense (benefit) for the periods presented below consisted of the following:
December 31,
(US$ thousands)
2022
2021
2020
Current:
U.S. federal
$
90,933
$
30,075
$
(28,959)
Non-U.S.
75,270
(4,443)
(18,967)
State
25,347
3,480
(1,034)
Total current
191,550
29,112
(48,960)
Deferred:
U.S. federal
406
13,486
18,353
Non-U.S.
35,425
6,658
(18,757)
State
4,193
3,846
(10,652)
Total deferred
40,024
23,990
(11,056)
Total income tax expense (benefit)
$
231,574
$
53,102
$
(60,016)
The following is a reconciliation of the expected statutory federal income tax expense (benefit) to the Company’s
income tax expense (benefit) for the periods presented below:
December 31,
(US$ thousands)
2022
2021
2020
Current:
Expected income tax expense (benefit) at U.S. federal statutory
rate
$
210,690
$
50,931
$
(60,176)
Percentage depletion
(41,047)
—
—
Permanent differences
(2,262)
296
(3,144)
Prior period tax return adjustments and amendments
596
(4,259)
—
Foreign tax deductions method change and prior year
amendments
—
—
28,952
Australian branch impact on U.S. taxes
42,049
(1,699)
(21,398)
State income taxes, net of federal benefit
21,548
7,833
(4,250)
Total income tax expense (benefit)
$
231,574
$
53,102
$
(60,016)
Effective tax rate
23.1%
21.9%
20.9%
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, 2022 and 2021 were as follows:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 153
December 31,
(US$ thousands)
2022
2021
Deferred income tax assets:
Accruals and provisions
$
36,409
$
29,091
Contract obligations
119,505
137,290
Asset retirement obligation
49,078
40,033
Goodwill
6,590
7,057
Tax losses
6,886
35,078
U.S. asset on foreign deferred taxes
14,408
—
Other
31,747
22,676
Gross deferred income tax assets
264,623
271,225
Valuation allowance
(1)
(34,667)
(25,590)
Total deferred income tax assets, net of valuation allowance
229,956
245,635
Deferred income tax liabilities:
Property, plant, equipment and mine development, principally due to
differences in depreciation, depletion and asset impairments
(300,968)
(272,219)
Warehouse stock
(13,980)
(14,903)
U.S. liability on foreign deferred taxes
—
(10,301)
Other
(10,679)
(9,246)
Total deferred income tax liabilities
(325,627)
(306,669)
Net deferred income tax liability
$
(95,671)
$
(61,034)
(1)
predominantly to foreign tax credits, tax losses, land and goodwill in Australia which is in the Other category in the table. Due to the capital
character of these items and the lack of expected capital gains, the Australian group is not expected to realize the benefit of this deferred tax
asset.
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 Company did not identify any new uncertain tax positions during the year ended December 31, 2021 and
2022, and as a result the Company does
no
t have any recorded uncertain tax positions as of December 31, 2022.
The Company recorded
no
and 2020 and these years remain open to examination by U.S. and Australian tax authorities.
25. 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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 154
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, 2022 and 2021, there were
no
on a recurring basis.
Other Financial Instruments
The following methods and assumptions are used to estimate the fair value of other financial instruments as of
December 31, 2022 and 2021:
• Cash and restricted cash, accounts receivable, 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, 2022, there were
no
estimated fair value of the Notes as of December 31, 2022 is approximately $
249.7
quoted market prices in a market that is not considered active (Level 2).
Other than the estimated fair values of the Greenbrier mining asset held for sale described in Note 4 “Assets
Held for Sale” and Note 5 “Impairment of Assets”, which are level 3 fair value measurements, there are no other
fair value measurements of assets and liabilities that are measured at fair value on a nonrecurring basis as of
December 31, 2022 and 2021.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 155
26. 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.
Net gain
(loss)
(US$ thousands)
Foreign
currency
translation
adjustments
Cash flow
fuel hedges
Total
Balance at December 31, 2020
$
(26,777)
$
(2,029)
$
(28,806)
Net current-period other comprehensive income (loss):
Gain in other comprehensive income before reclassifications
6,991
9,922
16,913
Loss on long-term intra-entity foreign currency transactions
(24,442)
—
(24,442)
Gain reclassified from accumulated other comprehensive loss
—
(7,023)
(7,023)
Tax effects
—
(870)
(870)
Total net current-period other comprehensive income (loss)
(17,451)
2,029
(15,422)
Balance at December 31, 2021
(44,228)
—
(44,228)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income
(19,610)
—
(19,610)
Loss on long-term intra-entity foreign currency transactions
(27,585)
—
(27,585)
Total net current-period other comprehensive losses
(47,195)
—
(47,195)
Balance at December 31, 2022
$
(91,423)
$
—
$
(91,423)
27. 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,
2023
$
5,493
2024
5,365
2025
5,258
2026
5,127
2027
5,101
Thereafter
26,398
Total
$
52,742
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, 2022, purchase commitments for capital expenditures were $
28.6
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
13 years
.
In the U.S., the Company typically negotiates its rail and coal terminal on an annual basis. As of December 31,
2022, these Australian and U.S. commitments under take-or-pay arrangements totaled $
0.93
approximately $
96.7
203.1
206.6
years and $
426.3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 156
28. Contingencies
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. No liabilities
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.
As required by certain agreements, the Company had cash collateral in the form of deposits in the amount of
$
89.1
81.0
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
long-term 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 of such letter of credit.
As of December 31, 2022,
no
no
For the U.S. Operations in order to provide the required financial assurance, the Company generally uses surety
bonds for post-mining reclamation. The Company can also use bank letters of credit to collateralize certain other
obligations. As of December 31, 2022, the Company had outstanding surety bonds of $
34.9
credit of $
16.8
compensation insurance and to secure various obligations and commitments. Future regulatory changes relating
to these obligations could result in increased obligations, additional costs or additional collateral requirements.
For the Australian Operations, the Company had bank guarantees outstanding of $
27.4
million at December 31,
2022, primarily in respect of certain rail and port arrangements of the Company.
At December 31, 2022, the Company had total outstanding bank guarantees provided of $
44.2
obligations and commitments.
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 $
55.4
82.2
8.2
(A$
12.1
awaiting the outcome of this objection. The outcome of this objection is uncertain.
The Company has reviewed the assessment received and based on legal and valuation advice it has sought,
continues to maintain its position and the estimated accrual of $
29.0
43.0
on the Curragh acquisition. During the period the Company made a partial payment of stamp duty, reducing the
remaining estimated accrual for stamp duty to $
11.7
17.3
included within “Accrued Expenses and Other Current Liabilities” in its Consolidated Balance sheet.
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.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 157
29. Related
‑
Party Transactions
Xcoal
On May 27, 2021, Xcoal ceased to be a related party after Xcoal’s founder, chief executive officer and chief
marketing officer, Mr. Ernie Thrasher, retired as a non-executive director of the Company.
“Coal revenues from related parties” of $
97.3
Comprehensive Income for the period up to May 27, 2021, represent revenues from Xcoal while it was a related
party. Revenues from coal sales to Xcoal after May 27, 2021 are included within “Coal revenues” in the
Consolidated Statement of Operations and Comprehensive Income.
Revenues from Xcoal of $
134.6
from related parities” in the Consolidated Statement of Operations and Comprehensive Income.
The Energy & Mineral Group
On May 12, 2021, affiliates of The Energy & Minerals Group, or EMG, which is the Company’s controlling
stockholder through its ownership of Coronado Group LLC, participated in the Notes Offering and purchased
$
65.0
of Notes in November 2021 and November 2022, as described in Note 17 “Interest Bearing Liabilities”, the
principal amount of Notes held by EMG reduced to $
52.0
2022. At December 31, 2022, interest payable to affiliates of EMG on the Notes was $
0.7
recorded within “Accrued expenses and other current liabilities” in the Consolidated Balance Sheet. Interest
expense to affiliates of EMG was $
7.1
expense, net” in the Consolidated Statement of Operations and Comprehensive Income.
Coronado Group LLC
Under the Coronado Group LLC agreement (as amended, effective October 23, 2018),
2,900
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
2,500
formation of Coronado Group LLC were replaced by these new units. At December 31, 2022 and 2021,
2,900
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, 2022 and 2021, a
portion of the authorized units have been allocated to various members of the Company’s management including
Mr. Garold Spindler, CEO, who is also member of Coronado Group LLC.
Stockholder’s Agreement and Registration Rights and Sell-Down Agreement
As of December 31, 2022, Coronado Group LLC has beneficial ownership in the aggregate of
50.4
% of the
Company’s Shares. On September 24, 2018, Coronado Group LLC and the Company entered into a
Stockholder’s Agreement and a Registration Rights and Sell-Down Agreement which governs the relationship
between Coronado Group LLC and the Company while the EMG Group beneficially owns in the aggregate at
least
50
% 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;
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc. Form 10-K December 31, 2022 158
• 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
10
% 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.
30. Subsequent Events
Ordinary dividends
On February 21, 2023, the Company’s Board of Directors declared a bi-annual fully franked fixed ordinary
dividend of $
8.4
0.5
in relation to this dividend due to the available unaccepted portion of the offer to purchase Notes made in
connection with special dividends declared on October 30, 2022.
The dividend will have a record date of
March 15, 2023
, Australia time, and be payable on
April 5, 2023
, Australia
time. CDIs will be quoted “ex” dividend on March 14, 2023, Australia time. The total ordinary dividend will be
funded from available cash.
Coronado Global Resources Inc. Form 10-K December 31, 2022 159
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, 2022 and 2021, 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, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2022, 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, 2022, 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 21, 2023 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, 2022 160
Stamp Duty assessment on the acquisition of the Curragh mine
Description of the
matter
As described in Note 28 to the consolidated financial statements, the Company received an
assessment from the Queensland Revenue Office (“QRO”) for the stamp duty payable on
the Company’s 2018 acquisition of the Curragh mine. The QRO assessed the stamp duty
on this acquisition at an amount of $55.4 million plus unpaid tax interest of $8.2 million. The
Company disputes the QRO’s calculation of the liability, which the Company estimates to be
$29.0 million including unpaid tax interest. On November 23, 2022, the Company filed an
objection to the assessment and is currently awaiting its outcome.
Auditing the accrual for the stamp duty obligation involved complex auditor judgment, given
the materiality of the assessment made by the QRO, the unique nature of the property
acquired and the resulting difficulty in assessing the Company’s judgments around the
interpretation and application of the law to this matter.
How we
addressed the
matter in our
audit
We obtained an understanding, evaluated the design and tested the operation of
management’s controls related to the Company’s process for the recognition, measurement
and disclosure of the stamp duty contingency, as a non-routine judgmental accounting
matter including the Company’s interpretation of tax law.
Our audit procedures included, among others, understanding external legal counsel
opinions obtained by management to support their interpretation and application of the law
in this matter. We also discussed external legal counsel’s opinion with external legal counsel
directly.
We involved our indirect tax professionals to help us evaluate the Company’s judgments
around the interpretation and application of the law to this matter and the relative likelihood
of the multiple alternative potential outcomes. These potential outcomes included the risk of
litigation and estimations of interest and penalties payable.
We also evaluated the disclosures made in the consolidated financial statements.
/s/
Ernst & Young
We have served as the Company’s auditor since 2020.
Brisbane, Australia
February 21, 2023
Coronado Global Resources Inc. Form 10-K December 31, 2022 161
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
Coronado Global Resources Inc. Form 10-K December 31, 2022 162
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 Group Chief 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, 2022, 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, 2022.
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, 2022 163
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,
2022, 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, 2022, 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, 2022 and 2021,
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, 2022, and the related notes and our report
dated February 21, 2023 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 21, 2023
Coronado Global Resources Inc. Form 10-K December 31, 2022 164
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
Coronado Global Resources Inc. Form 10-K December 31, 2022 165
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 2023
Annual Meeting of Stockholders, or the Proxy Statement, under the heading “Executive Officers and Corporate
Governance”, 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 Related Stockholder Matters”
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 heading
“Certain Relationships and Related Transactions” and is incorporated herein by reference and made a part hereof
from the Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING 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 Independent Registered Public Accounting Firm” and is incorporated herein by
reference and made a part hereof from the Proxy Statement.
Coronado Global Resources Inc. Form 10-K December 31, 2022 166
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report:
1. Financial Statements. See index to Financial Statements and Supplementary Data on page 119 of this
Annual report on Form 10-K.
2. Financial Statements Schedules. Schedules are omitted because they are not required or applicable, or
the required information is included in the Financial Statements or related notes thereto.
3. Exhibits. The exhibits filed with or incorporated by reference as part of this Report 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
10.2†‡
Coronado Global Resources Inc. Form 10-K December 31, 2022 167
Exhibit No.
Description of Document
10.3‡
10.4‡
10.5>‡
10.6>‡
10.7>‡
10.8>‡
10.9>‡
10.10>‡
10.11>‡
10.12>‡
10.13>
10.14>
10.15>
10.16>
10.17>
10.18>
10.19>
Coronado Global Resources Inc. Form 10-K December 31, 2022 168
Exhibit No.
Description of Document
10.20‡
10.21‡
10.22‡
10.23
10.24
10.25
10.26†‡
21.1
23.1
23.2
23.3
23.4
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, 2022, 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
Coronado Global Resources Inc. Form 10-K December 31, 2022 169
Exhibit No.
Description of Document
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, 2022 170
ITEM 16. FORM 10-K SUMMARY
None.
Coronado Global Resources Inc. Form 10-K December 31, 2022 171
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/ Garold Spindler
Garold Spindler
Managing Director and Chief Executive Officer (as duly
authorized officer and as principal executive officer of
the registrant)
Date: February 21, 2023
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/ Garold Spindler
Managing Director and Chief Executive
Officer (Principal Executive Officer)
February 21, 2023
Garold Spindler
/s/ Gerhard Ziems
Group Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
February 21, 2023
Gerhard Ziems
/s/ William Koeck
Director
February 21, 2023
William Koeck
/s/ Philip Christensen
Director
February 21, 2023
Philip Christensen
/s/ Greg Pritchard
Director
February 21, 2023
Greg Pritchard
/s/ Laura Tyson
Director
February 21, 2023
Laura Tyson
/s/ Sir Michael Davis
Director
February 21, 2023
Sir Michael Davis