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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM
10-K
___________________________________________________
(Mark One)
 
ANNUAL REPORT
 
PURSUANT TO
 
SECTION 13 OR
 
15(d) OF THE
 
SECURITIES EXCHANGE
 
ACT
OF 1934
For the fiscal year ended
December 31, 2023
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 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:
Title of each class
Name of each exchange on which registered
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
 
 
No
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section
 
13 or Section 15(d) of the Act.
Yes
 
 
No
 
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
 
 
No
 
 
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
 
 
No
 
Indicate by
 
check
 
mark whether
 
the registrant
 
is a
 
large accelerated
 
filer,
 
an accelerated
 
filer,
 
a non-accelerated
 
filer,
 
a 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.
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
 
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.
 
 
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.
 
 
If
 
securities are
 
registered pursuant
 
to Section
 
12(b) of
 
the
 
Act, indicate
 
by check
 
mark whether
 
the
 
financial statements
 
of
 
the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
 
Indicate by check mark whether any of those
 
error corrections are restatements that required
 
a recovery analysis of incentive-based
compensation received by any of
 
the registrant’s executive officers
 
during the relevant recovery period
 
pursuant to §240.10D-1(b).
Indicate by check
 
mark whether the
 
registrant is a
 
shell company (as
 
defined in Rule
 
12b-2 of the Exchange
 
Act).
 
Yes
 
 
No
 
 
 
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,
 
2023, the last business
 
day of the
 
registrant’s most recently completed
 
second
fiscal quarter, as reported on the Australian Securities Exchange, was $
842,598,099
.
The total
 
number of
 
shares of
 
the registrant’s
 
common stock,
 
par value
 
$0.01 per
 
share, outstanding
 
on December
 
31, 2023,
 
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
2024 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.
c561202310Kp3i0 c561202310Kp3i1
Steel starts
here.
Annual Report on Form 10-K for the year ended December
 
31, 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
5
EXPLANATORY
 
NOTE
Unless
 
otherwise
 
noted,
 
references
 
in
 
this
 
Annual
 
Report
 
on
 
Form 10-K
 
to
 
“we,”
 
“us,”
 
“our,”
 
“Company,”
 
or
“Coronado” refer
 
to Coronado
 
Global Resources
 
Inc. and
 
its consolidated
 
subsidiaries and
 
associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Annual Report on Form 10-K are expressed in metric tons, or
Mt,
 
millions
 
of
 
metric
 
tons,
 
or
 
MMt,
 
or
 
millions
 
of
 
metric
 
tons
 
per
 
annum,
 
or
 
MMtpa,
 
except
 
where
 
otherwise
stated. One Mt (1,000 kilograms)
 
is equal to 2,204.62 pounds and
 
is equivalent to 1.10231 short tons.
 
A net ton
is equivalent
 
to a
 
short ton,
 
or 2,000
 
pounds. In
 
addition, all
 
dollar amounts
 
contained herein
 
are expressed
 
in
United States
 
dollars, or
 
US$, except
 
where otherwise
 
stated. References
 
to “A$”
 
are references
 
to Australian
dollars, the
 
lawful currency
 
of the
 
Commonwealth of
 
Australia, or
 
the Commonwealth.
 
Some numerical
 
figures
included in this Annual Report on Form 10-K have been
 
subject to rounding adjustments. Accordingly, numerical
figures shown as totals in certain tables may not equal
 
the sum of the figures that precede them.
CAUTIONARY NOTICE REGARDING FORWARD
 
-LOOKING STATEMENTS
This Annual
 
Report on
 
Form 10-K
 
contains “forward-looking
 
statements” within
 
the meaning
 
of Section
 
27A of
the Securities Act
 
of 1933, as
 
amended, or the
 
Securities Act, and
 
Section 21E of
 
the Securities Exchange
 
Act
of
 
1934,
 
as
 
amended,
 
or
 
the
 
Exchange
 
Act,
 
concerning
 
our
 
business,
 
operations,
 
financial
 
performance
 
and
condition, the coal, steel and other industries, as well as our plans,
 
objectives and expectations for our business,
operations, financial performance and condition. Forward-looking statements may
 
be identified by words such
 
as
“may,”
 
“could,”
 
“believes,”
 
“estimates,”
 
“expects,”
 
“intends,”
 
“plans,”
 
“anticipate,”
 
“forecast,”
 
“outlook,”
 
“target,”
“likely,” “considers”
 
and other similar words.
Any
 
forward-looking
 
statements
 
involve
 
known
 
and
 
unknown
 
risks,
 
uncertainties,
 
assumptions
 
and
 
other
important factors that
 
could cause actual
 
results, performance,
 
events or outcomes
 
to differ
 
materially from
 
the
results,
 
performance,
 
events
 
or
 
outcomes
 
expressed
 
or
 
anticipated
 
in
 
these
 
statements,
 
many
 
of
 
which
 
are
beyond
 
our
 
control.
 
Such
 
forward-looking
 
statements
 
are
 
based
 
on
 
an
 
assessment
 
of
 
present
 
economic
 
and
operating
 
conditions
 
on
 
a
 
number
 
of
 
best
 
estimate
 
assumptions
 
regarding
 
future
 
events
 
and
 
actions.
 
These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans or an investment in our securities include,
 
but are not limited to:
 
the prices we receive for our coal;
 
uncertainty in global economic
 
conditions, including the
 
extent, duration and
 
impact of ongoing
 
civil
unrest and
 
wars, as
 
well as
 
risks related
 
to government
 
actions with
 
respect to
 
trade agreements,
treaties or policies;
 
a decrease in the availability or increase in costs of key supplies, capital equipment or commodities,
such as diesel fuel, steel, explosives and tires, as the result
 
of inflationary pressures or otherwise;
 
the extensive forms
 
of taxation that
 
our mining operations
 
are subject to,
 
and future tax
 
regulations
and developments.
 
For example,
 
the amendments
 
to the
 
coal royalty
 
regime implemented
 
in 2022
by the
 
Queensland
 
State Government
 
in Australia
 
introducing higher
 
tiers to
 
the coal
 
royalty rates
applicable to our Australian Operations;
 
concerns
 
about
 
the
 
environmental
 
impacts
 
of
 
coal
 
combustion
 
and
 
greenhouse
 
gas,
 
or
 
GHG
emissions, relating
 
to mining
 
activities,
 
including
 
possible
 
impacts on
 
global
 
climate issues,
 
which
could result in increased regulation of coal
 
combustion and requirements to reduce
 
GHG emissions
in many
 
jurisdictions,
 
including
 
federal and
 
state government
 
initiatives
 
to control
 
GHG
 
emissions
could increase costs associated
 
with coal production and consumption,
 
such as costs for
 
additional
controls
 
to
 
reduce
 
carbon
 
dioxide
 
emissions
 
or
 
costs
 
to
 
purchase
 
emissions
 
reduction
 
credits
 
to
comply
 
with
 
future
 
emissions
 
trading
 
programs,
 
which
 
could
 
significantly
 
impact
 
our
 
financial
condition
 
and
 
results
 
of
 
operations,
 
affect
 
demand for
 
our products
 
or our
 
securities
 
and
 
reduced
access to capital and insurance;
 
the impact of the SGI Transaction (as defined in Item 1.
 
“Business”), including the impact of the SGI
Transaction on change of control and related
 
provisions in material agreements;
 
severe financial hardship,
 
bankruptcy, temporary or permanent shut
 
downs or operational
 
challenges
of
 
one
 
or
 
more
 
of
 
our
 
major
 
customers,
 
including
 
customers
 
in
 
the
 
steel
 
industry,
 
key
suppliers/contractors,
 
which
 
among
 
other
 
adverse
 
effects,
 
could
 
lead
 
to
 
reduced
 
demand
 
for
 
our
coal,
 
increased
 
difficulty
 
collecting
 
receivables
 
and
 
customers
 
and/or
 
suppliers
 
asserting
 
force
majeure or other reasons for not performing their contractual
 
obligations to us;
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
6
 
our ability to generate sufficient cash to service
 
our indebtedness and other obligations;
 
our
 
indebtedness
 
and
 
ability
 
to
 
comply
 
with
 
the
 
covenants
 
and
 
other
 
undertakings
 
under
 
the
agreements governing such indebtedness;
 
our ability to
 
collect payments
 
from our customers
 
depending on
 
their creditworthiness,
 
contractual
performance or otherwise;
 
the demand for steel products, which impacts the demand for
 
our metallurgical, or Met, coals;
 
risks
 
inherent
 
to
 
mining
 
operations
 
could
 
impact
 
the
 
amount
 
of
 
coal
 
produced,
 
cause
 
delay
 
or
suspend coal deliveries, or increase the cost of operating
 
our business;
 
the loss of, or significant reduction in, purchases by our
 
largest customers;
 
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;
 
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
7
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.
 
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.
c561202310Kp8i1 c561202310Kp8i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
8
PART I
ITEM 1.
 
BUSINESS.
Overview
We are a leading producer, global marketer and exporter of high-quality Met coals, which
 
is an essential element
in
 
the
 
production
 
of
 
steel.
 
Our
 
coals,
 
transformed
 
in
 
the
 
steelmaking
 
process,
 
support
 
the
 
manufacture
 
of
everyday steel-based products, including steel required
 
in the manufacture of renewable energy infrastructure.
Our mining
 
operations and
 
development projects
 
are located
 
in Queensland
 
in Australia,
 
and in
 
Virginia, West
Virginia and
 
Pennsylvania in
 
the United
 
States. Coronado
 
is 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
 
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 0.78 ton
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 2023 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
 
64.1%
 
of
 
our
 
total
 
revenue,
including Tata
 
Steel Limited, or Tata
 
Steel, which accounted for 20.5% of total revenue,
 
in 2023.
The
 
charts
 
below
 
show
 
our
 
direct
 
sales
 
by
 
geographic
 
region
 
in
 
2023
 
and
 
our
 
sales
 
volume
 
by
 
export
 
and
domestic coal sales in 2021, 2022 and 2023.
c561202310Kp9i0 c561202310Kp9i1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
c561202310Kp9i2
 
 
 
 
 
 
 
 
 
 
 
c561202310Kp9i3
 
 
 
 
 
 
 
 
 
 
 
c561202310Kp9i4
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
9
3%
26%
10%
25%
13%
10%
8%
5%
Customer -FY2023
 
direct sales by coal revenue
Other Asia countries
Japan
South Korea
India
North America
South America
Europe
Australia
75%
25%
FY2021
Export
Domestic
66%
34%
FY2022
Export
Domestic
72%
28%
FY2023
Export
Domestic
Sales volume by export and domestic coal sales
To
 
support our
 
operations, we
 
have proven
 
and probable
 
coal reserves
 
totaling
 
556
MMt as
 
of December
 
31,
2023, 223
MMt and 333
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 then Chief Executive Officer
 
and current Executive Chair,
 
Mr. Garold Spindler,
our then President and Chief Operating Officer, Mr. James Campbell and a private equity fund affiliated with The
Energy & Minerals
 
Group, or
 
EMG, with
 
the intention
 
of evaluating,
 
acquiring and
 
developing
 
Met coal
 
mining
properties.
 
Prior to our initial public
 
offering,
 
Coronado Global Resources Inc.,
 
was a wholly-owned subsidiary
 
of Coronado
Group LLC.
On
 
October 23,
 
2018,
 
we
 
completed
 
an
 
initial
 
public
 
offering
 
on
 
the
 
Australian
 
Securities
 
Exchange,
 
or
 
ASX,
which we refer to as the Australian IPO.
Coronado Group LLC is currently owned by funds managed by EMG, which we refer to,
 
collectively, as the EMG
Group, and certain members of our management.
As of
 
December
 
31,
 
2023,
 
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.
 
c561202310Kp10i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
10
SGI Transaction
On September 25, 2023, EMG Group, the Company’s controlling stockholder through its ownership of Coronado
Group LLC,
 
including through
 
certain of
 
its affiliates
 
and managed
 
funds, which
 
we refer to,
 
collectively,
 
as the
Sellers, advised the Company that it had entered into a membership interest
 
purchase agreement, or MIPA, with
Sev.en Global Investments a.s., or SGI. A copy of the MIPA has not been made available to the Company or the
Special Committee referred to below as of the date of this Annual Report on Form 10-K. However, the Company
understands that, pursuant
 
to the terms of
 
the MIPA,
 
the Sellers agreed to
 
sell all of their
 
interests in Coronado
Group LLC to
 
a wholly-owned
 
subsidiary of
 
SGI. We
 
refer to the
 
proposed transaction
 
as the SGI
 
Transaction.
The
 
Company
 
also
 
understands
 
that,
 
under
 
the
 
MIPA,
 
the
 
SGI
 
Transaction
 
is
 
subject
 
to
 
customary
 
closing
conditions, including regulatory approvals in the U.S. and Australia.
 
The Board of
 
Directors has appointed
 
a special committee
 
of independent
 
directors, or the
 
Special Committee,
to, among other things, assess
 
the impact and consequences of the
 
SGI Transaction on the
 
Company and take
such actions as the Special Committee deems appropriate
 
in connection with the SGI Transaction.
 
EMG Group has
 
reported that following
 
the closing of
 
the SGI Transaction,
 
the timing of
 
which the Company
 
is
not aware, SGI will be the
 
direct or indirect owner of
 
Coronado Group LLC. As of
 
the date of this Annual Report
on Form 10-K, Coronado Group
 
LLC is the direct owner
 
of 845,061,399 CDIs (representing
 
a beneficial interest
in 84,506,140
 
shares of
 
common stock,
 
or 50.4%
 
of the
 
Company’s
 
outstanding
 
shares of
 
common
 
stock).
 
In
addition, Coronado
 
Group LLC, (subject
 
to the terms
 
of the Amended
 
and Restated
 
Certificate of Incorporation
dated
 
as
 
of
 
October
 
18,
 
2018
 
of
 
the
 
Company,
 
or
 
the
 
COI;
 
and
 
the
 
Stockholders
 
Agreement,
 
dated
 
as
 
of
September 23,
 
2018, between
 
the Company
 
and Coronado Group
 
LLC, or the
 
Stockholders Agreement)
 
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.
 
As holder
 
of the
 
Series A Share,
 
Coronado Group
LLC
 
is,
 
subject
 
to
 
the
 
COI
 
and
 
Stockholders
 
Agreement,
 
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.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
11
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 91.4%
 
of our total coal revenues for the
 
year ended December 31, 2023. 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
 
2023,
 
the
 
seaborne
 
Met
 
coal
 
market
 
remained
 
volatile,
 
driven
 
by
 
supply
 
concerns
 
in
 
key
 
Met
 
coal
markets and trade flow disruptions due to ongoing civil unrests
 
and wars.
Thermal Coal
Sales of thermal
 
coal represented 8.6%
 
of our total
 
coal revenues
 
for the year
 
ended December
 
31, 2023. The
thermal coal we produce is predominantly
 
a byproduct of mining Met coal. The
 
thermal coal we produce is sold,
directly
 
or
 
indirectly,
 
to
 
power
 
stations,
 
predominantly
 
Stanwell,
 
as
 
an
 
energy
 
source
 
in
 
the
 
generation
 
of
electricity. Demand for our thermal coal is impacted by economic conditions, environmental regulations, demand
for
 
electricity,
 
including
 
the
 
impact
 
of
 
energy
 
efficient
 
products,
 
and
 
the
 
cost
 
of
 
electricity
 
generation
 
from
alternative
 
fuels.
 
Our
 
thermal
 
coal
 
primarily
 
competes
 
with
 
producers
 
of
 
other
 
forms
 
of
 
electric
 
generation,
including natural gas, oil, nuclear,
 
hydro, wind, solar and biomass, that provide an alternative to
 
coal use.
 
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 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.
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
 
key
 
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.
c561202310Kp12i0 c561202310Kp12i2 c561202310Kp12i3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
c561202310Kp12i1 c561202310Kp12i4
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
12
55%
6%
39%
Australia
HCC
SCC
PCI
71%
29%
U.S.
Low Vol
High Vol
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.
2023 Coronado’s key coal trade flows
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)
 
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, 2023.
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
 
of such thermal coal being exported.
 
 
c561202310Kp13i0
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
13
94.6%
5.4%
FY23 Coal revenue mix -Australian
Operations
Met
Thermal
Revenues from our Australian Operations represented
 
58.2% of our total revenue for the year ended December
31, 2023. See Item 2. “Properties” for more information regarding
 
Curragh.
 
For the year ended December 31, 2023, 68.7% of the total
 
volume of coal sold by our Australian Operations was
Met coal and 31.3% 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, 2023,
 
Curragh sold 6.7
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
 
global
 
marketing
 
team,
 
with
 
pricing
 
agreed
 
to
 
bilaterally
 
or
 
with
reference
 
to
 
benchmark
 
indices
 
or
 
spot
 
indices.
 
Our
 
Australian
 
Operations
 
have
 
maintained
 
a
 
high
 
level
 
of
contract coverage against planned production. In 2023, 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
 
and
 
active
 
coal-producing
 
region.
 
Met
 
coal
 
produced
 
by
 
our
 
U.S.
Operations is consumed regionally by North American steel producers or
 
exported by seaborne transportation to
steel producers
 
(primarily in Asia,
 
Europe and South
 
America). The U.S.
 
Operations also
 
produce small quantities
of thermal coal
 
that is extracted
 
in the process
 
of mining Met
 
coal, which is
 
sold 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 with High-Vol
 
(including HVA and
 
HVB) and coal with Low-Vol.
Sales from
 
our U.S.
 
Operations to
 
export markets
 
are typically
 
priced with
 
reference to
 
a benchmark
 
index. In
circumstances where we
 
sell our seaborne
 
coal through intermediaries
 
Free on Rail
 
(Incoterms 2010), or
 
FOR,
our realized price on FOR sales does not
 
include transportation to the seaborne port
 
or costs to transload into a
vessel. Consistent
 
with seaborne sales,
 
sales to North
 
American customers
 
are generally sold
 
on a FOR
 
basis
where the customer arranges for and incurs the cost of
 
transportation to their facility.
 
A portion of our sales is
 
sold to North American steel and coke producers on annual contracts at
 
fixed prices that
do
 
not
 
fluctuate
 
with
 
the
 
benchmark
 
index.
 
The
 
fixed-price
 
nature
 
of
 
these
 
annual
 
contracts
 
provides
 
us
 
with
visibility on our future revenues, as compared to spot sales or sales priced with reference to a benchmark index.
For
 
2024,
 
we
 
have
 
entered
 
into
 
annual
 
fixed
 
price
 
contracts
 
to
 
sell
 
approximately
 
2.5
 
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
 
41.8% of our total
 
revenue for the year
 
ended
December 31, 2023.
 
 
c561202310Kp14i0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
14
87.0%
13.0%
FY23 Coal revenue mix -U.S.
Operations
Met
Thermal
0%
20%
40%
60%
80%
Tata
Top 5
Top 10
Top
Customers
by coal revenues
FY 23
FY 22
For the year ended December 31, 2023,
 
87.7% of the total volume of
 
coal sold by our U.S. Operations
 
was Met
coal and 12.3%
 
was thermal coal.
 
We sold
 
74.3% of total
 
Met coal from
 
our U.S. Operations
 
into the seaborne
Met coal markets for the year ended December 31, 2023.
 
See Item 2.
 
“Properties” for
 
more information
 
regarding Buchanan
 
,
 
Logan and
 
the other
 
mining properties
 
that
compose our U.S. Operations.
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 2023
 
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
 
terms 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,
 
2023
 
15
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, 2023
 
and for prior years.
 
Under the CSA, we also share part of the revenue earned from export coal sales (from particular Tenements
 
(as
defined below)) with Stanwell through
 
various rebates. The most material rebate is
 
the export price rebate, which
is linked to the realized export coal price for a defined
 
Met coal product, 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.
In addition, 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,
 
2023, was $136.5
 
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. The key terms under the NCSA
 
are described below:
 
Coronado’s supply obligation under the NCSA
 
will commence on the earliest of:
-
 
The day after the final delivery date under the CSA;
-
 
the date of termination of the CSA, if it does so prior to
 
final delivery date; or
-
 
January 1, 2029.
 
 
The
 
term
 
of
 
the
 
NCSA
 
is
 
expected
 
to
 
be
 
10
 
years,
 
and
 
Coronado’s
 
thermal
 
coal
 
supply
 
obligation
 
to
Stanwell will reduce to
 
2 million ‘Tonnes Equivalent’ per annum (based on a
 
nominal gross calorific value
of
 
25.6GJ)
 
at
 
a
 
fixed
 
contract
 
price
 
that
 
varies
 
in
 
accordance
 
with
 
agreed
 
formulae,
 
inclusive
 
of
 
all
statutory charges and royalties
 
in respect of coal
 
sold and delivered under
 
the NCSA. The
 
supply term,
the contract
 
tonnage
 
and the
 
contract price
 
under the
 
NCSA are
 
subject to
 
adjustment in
 
accordance
with a financial model agreed between Stanwell and us.
 
The export rebates which were payable under the CSA are not
 
payable during the term of NCSA.
In summary, we have agreed that the total value of the discount
 
received by Stanwell on coal supplied to
 
it under
the
 
NCSA
 
should
 
(by
 
the
 
expiration
 
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 $277.4
 
million as of December 31, 2023.
 
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,
 
2023
 
16
Thermal coal
 
supplied to
 
Stanwell under
 
the OCSA
 
will be
 
at the
 
higher of
 
cost or
 
market value
 
at the
 
time of
sale.
 
See Item 1A. “Risk
 
Factors—Risks related
 
to the Supply
 
Deed with
 
Stanwell may
 
adversely affect
 
our financial
condition and results of operations.”
Transportation
Coal produced
 
at
 
our mining
 
properties
 
is transported
 
to customers
 
by a
 
combination
 
of road,
 
rail,
 
barge
 
and
ship. See Item 2. “Properties”
 
for descriptions of the transportation infrastructure
 
available to each of our mining
properties. Rail
 
and port
 
services
 
are typically
 
contracted
 
on a
 
long-term,
 
take-or-pay basis
 
in Australia,
 
while
these contracts
 
are typically
 
negotiated on
 
a quarterly
 
basis in
 
the 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
 
11.5
 
MMtpa
 
(plus
 
surge
 
capacity)
 
under
 
long-term
 
rail
 
haulage
agreements with Aurizon
 
Operations Limited, or
 
Aurizon Operations, and
 
Pacific National Holdings
 
Pty Limited,
or Pacific National.
 
The RGTCT Coal
 
Transport Services
 
Agreement with Aurizon
 
Operations is for
 
8.5 MMtpa of
 
haulage capacity
to RGTCT. Curragh pays a minimum monthly charge (components of which are payable on a take-or-pay basis),
which is calculated with reference
 
to the below-rail access charges,
 
haulage/freight charges, a minimum
 
annual
tonnage
 
charge
 
and
 
other
 
charges.
 
The
 
RGTCT
 
Coal
 
Transport
 
Services
 
Agreement
 
terminates
 
on
 
June 30,
2030.
The Coal Transport
 
Services Agreement
 
with Pacific
 
National is
 
for 1.0
 
MMtpa of
 
haulage capacity
 
to RGTCT.
Curragh pays
 
a minimum
 
monthly charge
 
(components of
 
which are
 
payable on
 
a take-or-pay
 
basis), which
 
is
calculated with reference to the below-rail
 
access charges, haulage/freight charges, a
 
minimum annual tonnage
charge and other charges. The
 
Coal Transport Services
 
Agreement with Pacific National terminates
 
on July 31,
2029.
 
The
 
Wiggins
 
Island
 
Rail
 
Project,
 
or
 
WIRP,
 
Transport
 
Services
 
Agreement
 
with
 
Aurizon
 
Operations
 
is
 
for
 
2.0
MMtpa of capacity to
 
WICET.
 
This contract is effectively
 
100% take-or-pay (for a
 
portion of the rail haulage
 
and
all capacity access charges). 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
Take
 
-or-Pay
 
Agreement,
 
provides
 
Curragh
 
with
 
export
 
capacity
 
of
 
1.5
 
MMtpa.
 
The
 
WICET
 
Take
 
-or-Pay
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
17
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,
 
five
 
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 13.9 MMtpa.
Under the WICET Take
 
-or-Pay Agreement, we are required
 
to provide security (which is
 
provided in the form of
a bank guarantee). The amount of
 
the security must cover our estimated liabilities as
 
a shipper under the WICET
Take
 
-or-Pay Agreement for the following twelve-month period. If
 
we are in default under
 
the WICET Take-or-Pay
Agreement and
 
are subject
 
to a
 
termination payment,
 
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 intermediaries.
 
For these sales,
 
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 Norfolk Southern and
 
CSX Transportation railroads.
 
Norfolk
 
Southern
 
railroad
 
serves
 
our
 
Buchanan
 
mining
 
property
 
and
 
transports
 
Buchanan’s
 
coal
 
to
 
Lamberts
Point Coal
 
Terminal
 
Pier 6
 
and to
 
CNX Marine
 
Terminal
 
for export
 
customers and
 
to our
 
domestic customers
either directly
 
or
 
indirectly
 
via inland
 
river
 
dock
 
facilities
 
where
 
the coal
 
is transloaded
 
on
 
to
 
barges
 
and
 
then
transported to the customer’s facilities.
CSX
 
Transportation
 
railroad
 
serves
 
our
 
Logan
 
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.
 
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
18
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 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 manage
 
and operate several
 
major pieces of
 
mining equipment and
 
facilities to produce
 
and transport
coal,
 
including,
 
but
 
not
 
limited to,
 
longwall
 
mining
 
systems,
 
continuous
 
miners,
 
draglines,
 
dozers,
 
excavators,
shovels,
 
haul
 
trucks,
 
conveyors,
 
coal
 
preparation
 
plants,
 
or
 
CPPs,
 
and
 
rail
 
loading
 
and
 
blending
 
facilities.
Obtaining and repairing these
 
major pieces of equipment
 
and facilities often involves
 
long lead times. We
 
strive
to extend the lives of existing equipment and facilities
 
through maintenance practices and equipment rebuilds to
defer the
 
requirement for
 
larger capital
 
purchases. We
 
use our
 
global leverage
 
with major
 
suppliers to
 
support
security of
 
supply to
 
meet the
 
requirements
 
of our
 
active mines.
 
See Item 2.
 
“Properties” for
 
more information
about operations at our mining properties.
We partner with contractors and other third parties for exploration, mining, and other services, generally, and the
success of these relationships
 
are important for our current
 
operations and the advancement of our development
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;
 
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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
19
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
 
increasing
competition, which could adversely affect profitability.”
Environmental Sustainability
Met coal is an essential ingredient in the production of
 
steel, which is the most utilized metal in the world and
 
an
essential material underpinning social and economic growth. Steel’s strength and durability make it critical in the
construction of
 
major projects
 
(including renewable
 
energy infrastructure),
 
transportation
 
technology,
 
electrical
equipment, and everyday household goods.
We are focused
 
on extracting high
 
quality Met coal
 
with a commitment
 
to environment,
 
social and governance,
or ESG, practices. 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 2022
 
Sustainability
Report released
 
on May
 
17, 2023, which
 
can be
 
found on
 
our website
 
at www.coronadoglobal.com/sustainability/.
Nothing
 
on
 
our
 
website,
 
including
 
our
 
2022
 
Sustainability
 
Report
 
or
 
sections
 
thereof,
 
shall
 
be
 
deemed
incorporated by reference
 
into this Annual
 
Report on Form
 
10-K. Our 2023
 
Sustainability Report
 
is expected to
be available in May 2024.
 
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, or 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, which
 
provides for
environmental management activities
 
undertaken at the
 
mine to minimize environmental
 
harm and contains
 
set
plans
 
and
 
procedures
 
to
 
ensure
 
that
 
our
 
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.
 
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 our 2021 Sustainability Report and has
 
committed to targeting
reductions
 
in
 
its
 
Scope
 
1
 
and
 
2
 
emissions
 
by
 
30%
 
by
 
2030
 
from
 
its
 
2019
 
emissions
 
baseline.
 
In
 
our
 
2022
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
20
Sustainability Report,
 
we reported
 
that we
 
reduced such
 
emissions when
 
compared to
 
2021. Further
 
progress
updates will be included in our 2023 Sustainability Report
 
expected to be filed in May 2024.
 
Emissions
 
reduction
 
estimates
 
to 2030
 
have
 
been evaluated
 
based
 
on improvements
 
that
 
can reasonably
 
be
expected using
 
technologies
 
currently available.
 
Detailed
 
analysis to
 
determine
 
economic
 
viability of
 
available
technologies has not been considered.
The target reduction of 30% by 2030 is based on the current mine plans for Coronado's Curragh and U.S. mines
and
 
is
 
not
 
expected
 
to
 
be
 
a
 
linear
 
reduction.
 
As
 
we
 
address
 
our
 
material
 
areas
 
of
 
impact
 
including
 
emission
reductions and opportunities, the need for mitigation technologies
 
are likely to increase.
Our Central Emissions Group, or CEG, consists of senior leaders and subject matter experts from our Australian
and U.S. Operations who meet monthly to discuss and analyze how climate change might impact our strategies.
One of
 
the key
 
focus areas
 
of the
 
CEG is
 
to ensure
 
that we
 
are progressing
 
towards our
 
emissions reduction
targets.
 
This
 
is
 
achieved
 
through
 
reviewing
 
the
 
accuracy
 
of
 
the
 
emissions
 
forecast,
 
providing
 
updates
 
on
decarbonization
 
projects
 
and
 
discussing
 
idea
 
pipelines
 
in
 
relation
 
to
 
new
 
technologies.
 
Our
 
capital
 
allocation
framework integrates climate-related risks and opportunities
 
into its decision-making processes.
We are
 
also evaluating
 
a range
 
of potential
 
projects that
 
could have
 
a positive
 
impact on
 
our emissions
 
profile
including
 
options
 
for
 
energy
 
generation
 
from
 
solar,
 
wind
 
and
 
gas
 
along
 
with
 
on-grid
 
solutions.
 
In
 
2022,
 
we
commissioned the
 
Buchanan Ventilation
 
Air Methane,
 
or VAM,
 
abatement project
 
on vent
 
shaft 16
 
at our
 
U.S.
Operations. The
 
project utilizes the
 
latest technology
 
to convert
 
fugitive methane
 
gas emissions
 
to carbon
 
dioxide.
Since commencing, the VAM
 
project has destroyed 264,850 tCO2e with a 95% emission
 
destruction efficiency.
 
Given the proven success of the original VAM
 
unit, we have commenced the installation of a second unit at vent
shaft 18
 
at our
 
U.S. Operations
 
.
 
Construction
 
works are
 
underway and
 
are expected
 
to be
 
completed
 
in mid-
2024. While
 
Coronado is
 
also exploring
 
other projects
 
to reduce
 
its carbon
 
footprint, with
 
the establishment
 
of
the second VAM
 
unit we
 
expect to substantially
 
reduce our
 
emissions further,
 
as part
 
of our strategic
 
path to a
30% reduction target by 2030.
 
Similarly, our
 
project to understand and define gas
 
reservoirs at Curragh with gas
 
production drilling is targeting
the capture
 
and beneficial
 
use of
 
open-cut waste
 
mine coal
 
gas from
 
our operations,
 
with priority
 
downstream
use cases being for power generation and use as a diesel substitute
 
in our mining fleets.
 
Drilling works for the pilot
 
program completed in early July 2023
 
and subsequent surface and production facilities
have been procured and are in the final stages of installation.
 
During
 
2023,
 
at
 
our
 
Australian
 
Operations
 
we
 
completed
 
a
 
dual-fuel
 
mine
 
truck
 
12-week
 
trial
 
using
 
gas
transported
 
from
 
Brisbane
 
without
 
incident.
 
The
 
part
 
substitution
 
of
 
gas
 
for
 
diesel
 
showed
 
no
 
discernible
difference
 
to
 
a
 
full
 
diesel-run
 
truck
 
and
 
performed
 
safely.
 
Coronado
 
has
 
commenced
 
the
 
development
 
of
 
a
roadmap to
 
potentially
 
roll-out the
 
conversion
 
of a
 
broader truck
 
fleet
 
pilot. This
 
project is
 
expected
 
to reduce
emissions at Curragh and also realize a reduction in cost given the substitution of diesel for incidental coal seam
gas to power our fleets.
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 and 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,
 
including
 
recent
 
reform
 
to
 
the
 
Safeguard
 
Mechanism
 
in
Australia, could significantly increase
 
the cost of coal production
 
and consumption, increase costs
 
as a result of
regulations requiring
 
the installation
 
of emissions
 
control technologies,
 
increase expenses
 
associated with
 
the
purchase of emissions reduction credits
 
to comply with future emissions
 
trading programs, or significantly reduce
coal
 
consumption
 
through
 
implementation
 
of
 
a
 
future
 
clean
 
energy
 
standard.
 
Such
 
initiatives
 
and
 
regulations
could further reduce
 
demand or prices
 
for our coal
 
in both domestic
 
and international
 
markets, could adversely
affect
 
our
 
ability
 
to
 
produce
 
coal
 
and
 
to
 
develop
 
our
 
reserves,
 
could
 
reduce
 
the
 
value
 
of
 
our
 
coal
 
and
 
coal
reserves, and may have a material adverse effect
 
on our business, financial condition and results of operations
 
.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
21
Human Capital Disclosures
People
Our ability to
 
attract and
 
retain skilled,
 
motivated and
 
engaged employees
 
is an
 
essential part
 
of our
 
business.
Investing in the skill and capabilities of our people will underwrite
 
our long-term growth and sustainability. In both
Australia and the
 
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.
Worldwide we had 1,878 employees as of
 
December 31, 2023. In addition, as of
 
December 31, 2023, there were
2,335 contractors supplementing the permanent workforce, primarily
 
at Curragh. Since we operate in areas with
highly competitive labor markets, it is essential that
 
we have a continued focus on attracting
 
the best people, and
ensuring we have programs in place to engage, develop
 
and retain them within our business.
We continue to support
 
initiatives to enhance our
 
culture, increase our
 
ability to attract and
 
retain the workforce
we need, and
 
to drive our
 
desire to build
 
safe, high-performing
 
teams. This
 
includes extensive
 
efforts to
 
gather
feedback from our
 
employees and contracting
 
partners through surveys,
 
focus groups and
 
team empowerment
sessions. Following
 
analysis of the
 
feedback, priorities
 
are identified,
 
and cultural
 
programs designed
 
to bridge
gaps between current and desired cultural states are developed
 
and implemented.
As of
 
December 31,
 
2023, approximately
 
10.8% 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
 
July 2023, the
 
Australian Fair Work Commission
 
approved the four
 
year Curragh
Mine Enterprise Agreement 2023. 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 first and 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, or “TRIFR”,
 
as of December 31, 2023 for
our
 
Australian
 
Operations
 
was
 
1.83
 
and
 
the
 
Total
 
Reportable
 
Incident
 
Rate,
 
or
 
“TRIR”,
 
for
 
12-month
 
rolling
average
 
as
 
of
 
December
 
31,
 
2023
 
for
 
our
 
U.S.
 
Operations
 
was
 
1.44.
 
As
 
indicated
 
in
 
the
 
graphs
 
below,
 
our
Australian Operations outperformed the
 
Queensland industry average in
 
2022 and 2023
 
and our U.S.
 
Operations
outperformed the U.S. national average in
 
2022 and 2023. We strive to
 
ensure that we continue to
 
provide a safe
operating environment for all employees and contractors.
c561202310Kp22i1 c561202310Kp22i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
22
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 understand
 
the value
 
diversity brings and
 
recognize that
 
creating
a culture
 
which welcomes
 
and values
 
all individuals
 
is paramount
 
to our
 
ability to
 
attract, retain,
 
motivate and
develop the best talent. 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 of December 31, 2023:
 
in the
 
United States,
 
approximately 6.8%
 
of Senior
 
Managers were
 
female,
 
increased from
 
6.1% as
 
of
December 31, 2022.
 
in Australia,
 
over
 
28% of
 
employees
 
at a
 
General
 
Manager,
 
Senior Manager
 
and Senior
 
Professional
level were female.
 
6.8% of our global workforce was female.
 
57% of
 
all employees
 
were
 
between the
 
ages
 
of 30
 
and 50
 
years
 
old, and
 
the
 
number
 
of employees
under 30 increased from 11.5%
 
as of December 31, 2022 to 13.7% as of December
 
31, 2023.
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
 
2023,
 
our
 
total
 
rolling
 
turnover
 
rate
 
was
 
18.1%
 
and
 
13.4%
 
in
 
Australia
 
and
 
the
 
U.S.,
 
respectively,
 
and
 
our
voluntary departure
 
rolling turnover rate
 
was 15.5%
 
in Australia
 
and 10.9% in
 
the U.S. 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.
 
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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
23
level, but the Australian federal government has a role
 
in approval of actions which have national environmental
significance.
 
In
 
Queensland,
 
the
 
environmental
 
laws
 
relevant
 
to
 
coal
 
mining
 
include
 
development
 
legislation,
pollution,
 
waste,
 
ecosystem
 
protection,
 
cultural
 
heritage
 
and
 
native
 
title
 
land
 
contamination
 
and
 
rehabilitation
legislation. In addition, the Australian federal government regulates
 
foreign investment and export approvals.
Tenements
We control the
 
coal mining
 
rights at Curragh
 
under 14 coal
 
and infrastructure
 
mining leases, or
 
MLs, and three
mineral development licenses, or MDLs, granted pursuant to the Mineral Resources Act 1989 (Qld).
 
See Item 2.
“Properties” for more information regarding the Tenements.
Mineral Resources Act 1989 (Qld)
The Mineral Resources
 
Act 1989 (Qld)
 
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,
 
2023
 
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.
 
EAs
 
with
 
at
 
least
 
$100,000
 
in
estimated
 
rehabilitation
 
costs
 
will
 
undergo
 
an
 
annual
 
risk
 
category
 
allocation
 
assessment
 
process.
 
The
assessment process will determine whether the holder will be required to provide a contribution to the Scheme’s
Financial Provisioning Fund and/or to provide surety to
 
the Scheme Manager for that EA.
 
It includes detail on the
mine operator’s financial
 
soundness and
 
credit rating,
 
characteristics of
 
the mining operation
 
(e.g., life of
 
mine,
or LOM,
 
and off-take
 
agreements), rehabilitation
 
history,
 
environmental compliance
 
history and the
 
submission
made by the Company. Risk categories include high, moderate, low and very low. If the ERC and risk categories
are set
 
at moderate,
 
low or
 
very low
 
for a mine,
 
then there
 
is a need
 
to pay
 
an annual
 
contribution based
 
on a
small percentage
 
of the
 
ERC to
 
the Scheme.
 
The prescribed
 
percentages for
 
each category
 
are: (1)
 
Very
 
low:
0.5%; (2) Low:
 
1.0%; and (3)
 
Moderate: 2.75%. If
 
the category is
 
high, then the
 
operation provides
 
a surety for
the whole ERC and
 
possibly a contribution
 
to the Scheme. The
 
risk assessment of
 
the mine and, therefore,
 
the
amount of the contribution to the fund is assessed and paid annually in perpetuity,
 
or until a clearance certificate
is obtained.
 
Each year, the Scheme Manager
 
is required to
 
make an Annual
 
Review Allocation to determine
 
whether the mine
will provide surety or pay a contribution to the Scheme
 
depending on the value of the ERC relating to applicable
environmental authorities, as follows:
1)
 
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.
There
 
can
 
be
 
no
 
assurance
 
that
 
our
 
risk
 
category
 
allocation
 
will
 
not
 
change
 
in
 
future
 
years.
 
Our
 
financial
obligations may increase due to a number of factors, including
 
but not limited to:
 
any changes that increases ERC or are of disturbances;
 
any major Environmental Authority,
 
or EA, amendment;
 
compliance with existing EA obligations; and
 
 
major changes to financial soundness of the EA holder.
 
Curragh has
 
2
 
EAs, which
 
are covered
 
by the
 
Scheme,
 
namely
 
EA number
 
EPML00643713
 
and
 
EA number
EPVX00635313.
 
In
 
October
 
2023,
 
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 2024, the Scheme Manager completed
 
an assessment of the Annual
Review Allocation for
 
EA 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 that
EA.
The Financial Provisioning Act also requires
 
for a Progressive Rehabilitation and
 
Closure Plan, or a PRCP,
 
with
respect to mined
 
land. This requirement
 
is integrated into
 
the existing EA
 
processes for
 
new mines, minimizing
the
 
regulatory
 
burden
 
on
 
government
 
and
 
industry.
 
All
 
mining
 
projects
 
carried
 
out
 
under
 
a
 
ML
 
that
 
make
 
a
site-specific
 
EA
 
application
 
will
 
be
 
required
 
to
 
provide
 
a
 
PRCP.
 
If
 
approved
 
by
 
the
 
administering
 
authority,
 
a
stand-alone PRCP schedule will be given to the applicant together with the EA. The PRCP schedule will
 
contain
milestones
 
with
 
completion
 
dates
 
for
 
achieving
 
progressive
 
rehabilitation
 
of
 
the
 
mine
 
site.
 
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 DES, the relevant
 
government department.
 
Curragh’s PRCP was
 
submitted to DES
 
on October 20,
 
2022, in
accordance
 
with
 
the
 
transition
 
notice
 
it
 
received;
 
and
 
Curragh
 
has
 
complied
 
with
 
all
 
further
 
requests
 
for
information made by
 
DES. DES recently
 
advised Curragh that
 
the end date
 
of the decision
 
period in relation
 
to
the PRCP has been extended to June 10, 2024.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
25
Environmental Protection Act 1994 (Qld)
The
 
primary
 
legislation
 
regulating
 
environmental
 
management
 
of
 
mining
 
activities
 
in
 
Queensland
 
is
 
the
Environmental
 
Protection
 
Act 1994
 
(Qld),
 
or
 
the
 
EP
 
Act. Its
 
objective
 
is to
 
protect
 
Queensland’s
 
environment
while allowing
 
for development
 
that improves
 
the total
 
quality of
 
life, both
 
now and
 
in the
 
future, in
 
a way
 
that
maintains ecologically sustainable
 
development. Under the EP
 
Act, it is an offense
 
to carry out a
 
mining activity
unless the person holds or is acting under an EA for the activity. The EA imposes conditions on a project. It is an
offense to contravene a condition of an
 
EA. In addition to the requirements found
 
in the conditions of an EA, the
holder must
 
also meet
 
its general
 
environmental
 
duty and
 
duty to
 
notify of
 
environmental
 
harm and
 
otherwise
comply with the provisions of the EP
 
Act and the regulations promulgated thereunder. For example, the following
are offenses under the EP Act:
 
causing serious or material environmental harm;
 
causing environmental nuisance;
 
depositing 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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
26
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
 
ML
 
700008),
 
which
 
is subject
 
to regional
 
interest
 
conditions,
 
such
 
as mitigation.
Certain protection conditions
 
are also imposed
 
on us with respect
 
to ML 80171,
 
which includes an
 
obligation to
provide mitigation in the event that strategic cropping land
 
is impacted by future operations.
Environmental Protection and Biodiversity Conservation
 
Act 1999 (Cth)
The Environment Protection
 
and Biodiversity Conservation
 
Act 1999 (Cth),
 
or the EPBC Act,
 
provides a federal
framework
 
to
 
protect
 
and
 
manage
 
matters
 
of
 
national
 
environmental
 
significance,
 
such
 
as
 
listed
 
threatened
species
 
and
 
ecological
 
communities
 
and
 
water
 
resources.
 
In
 
addition,
 
the
 
EPBC
 
Act
 
confers
 
jurisdiction
 
over
actions
 
that
 
have
 
a
 
significant
 
impact
 
on
 
the
 
environment
 
where
 
the
 
actions
 
affect,
 
or
 
are
 
taken
 
on,
Commonwealth land, or are carried out by a Commonwealth agency.
Under the
 
EPBC Act, “controlled
 
actions” that have
 
or are likely
 
to have a
 
significant impact on
 
a matter
 
of national
environmental significance are subject
 
to a rigorous assessment
 
and approval process. A
 
person must not take
a “controlled
 
action” unless approval
 
is granted
 
under the
 
EPBC Act.
 
Any person
 
proposing to
 
carry out
 
an “action”
that may be
 
a “controlled action”
 
must refer the
 
matter to the
 
Commonwealth Minister
 
for a determination
 
as to
whether the proposed action is a controlled action.
On
 
November 2,
 
2016,
 
the
 
Commonwealth
 
Minister
 
for
 
the
 
Department
 
of
 
the
 
Environment
 
and
 
Energy
administering the
 
EPBC Act
 
approved the
 
extension of
 
the existing Curragh
 
mining area to
 
include mining
 
four
additional Tenements
 
—ML 700006,
 
ML 700007,
 
ML 700008
 
and ML 700009
 
(EPBC Act
 
referral 2015/7508)—
as
 
a
 
“controlled
 
action,”
 
on
 
certain
 
conditions.
 
The
 
conditions
 
include
 
requirements
 
in
 
relation
 
to
 
offsets
 
and
groundwater.
Mine Health and Safety
The primary health and safety legislation that applies
 
to Curragh are the Coal Mining Safety and
 
Health Act 1999
(Qld)
 
and
 
the
 
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;
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
27
 
ensure the site senior
 
executive develops and
 
implements a safety
 
and health management
 
system for
all people at the mine;
 
ensure the
 
site senior
 
executive develops,
 
implements
 
and maintains
 
a management
 
structure for
 
the
mine that helps ensure the safety and health of persons
 
at the mine; and
 
not operate the coal mine without a safety and health
 
management system for the mine.
We recognize that health and
 
safety are imperative to the ongoing
 
success of our Australian Operations.
 
As the
operator at Curragh, we have
 
in place a comprehensive safety
 
and health management system,
 
which includes
an emergency
 
response
 
team,
 
to address
 
these legislative
 
requirements.
 
In accordance
 
with the
 
Coal Mining
Safety Legislation we have also established an occupational
 
hygiene baseline for dust exposure at Curragh.
Water Act 2000 (Qld)
 
In Queensland, all entitlements to the use, control and
 
flow of water are vested in the state and regulated by
 
the
Water Act
 
2000 (Qld).
 
Allocations under
 
the Water
 
Act 2000 (Qld)
 
can be managed
 
by a water
 
supply scheme
operator,
 
such
 
as
 
SunWater Ltd,
 
which
 
is
 
a
 
Government-owned
 
corporation
 
regulated
 
by
 
the
 
Queensland
Competition Authority. We
 
have purchased the required water allocations for Curragh and entered into 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
 
GHG
 
and/or
 
energy
 
consumption
 
meets
 
a
 
certain
 
threshold
 
to
register and
 
report GHG
 
emissions and
 
abatement actions,
 
as well
 
as energy
 
production and
 
consumption
 
as
part of
 
a single,
 
national reporting
 
system. The
 
Clean Energy
 
Regulator administers
 
the National
 
Greenhouse
and
 
Energy Reporting
 
Act
 
2007 (Cth),
 
and
 
the
 
Department
 
of Climate
 
Change,
 
Energy,
 
the
 
Environment
 
and
Water is responsible for related policy
 
developments and review.
The
 
Australian
 
Government
 
recently
 
reformed
 
the
 
Safeguard
 
Mechanism
 
to
 
incentivize
 
emissions
 
reductions,
through
 
declining
 
emissions
 
limits,
 
called
 
baselines,
 
predictably
 
and
 
gradually
 
on
 
a
 
trajectory
 
consistent
 
with
achieving the Government’s emissions reduction target of 43% below 2005
 
levels by 2030 and net zero by
 
2050.
On March
 
31, 2023, the
 
Australian Federal Parliament
 
passed the Safeguard
 
Mechanism (Crediting) Amendment
Bill 2023 amending the
 
National Greenhouse and
 
Energy Reporting Act 2007
 
and other legislation,
 
to establish
the framework to give effect to key elements of the reforms, such as introducing credits to
 
the scheme to provide
an incentive to companies to go below their baselines.
The
 
Safeguard
 
Mechanism
 
applies
 
to
 
industrial
 
facilities
 
emitting
 
more
 
than
 
100,000
 
tons
 
of
 
carbon
 
dioxide
equivalent per
 
year,
 
including in
 
electricity,
 
mining, oil
 
and gas
 
production, manufacturing,
 
transport and
 
waste
facilities.
In accordance
 
with the
 
Safeguard Mechanism, and
 
following the
 
Federal Government’s finalization
 
of the
 
National
Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment
 
(Reforms) Rule 2023, Curragh intends
to
 
establish
 
a
 
new
 
production-adjusted
 
(intensity)
 
baseline
 
for
 
covered
 
emissions
 
(Scope
 
1).
 
Curragh
 
will
 
be
required to take action to keep its’
 
net Scope 1 emissions at or below
 
the baseline through emissions reduction,
by
 
for
 
example,
 
purchasing
 
Safeguard
 
Mechanism
 
Credits,
 
or
 
SMCs,
 
from
 
another
 
facility
 
captured
 
by
 
the
Safeguard
 
Mechanism,
 
purchasing
 
and
 
surrendering
 
Australian
 
Carbon
 
Credit
 
Units,
 
or
 
ACCUs,
 
or
 
face
enforcement measures.
Labor Relations
Minimum employment entitlements, embodied in the National Employment Standards, apply to all private-sector
employees
 
and
 
employers
 
in Australia
 
under
 
the federal
 
Fair Work
 
Act 2009
 
(Cth).
 
These standards
 
regulate
employment conditions and paid leave. Employees who are associated with
 
the day-to-day operations of a local
mine or mines and who are not located in head office or corporate administration offices are also covered by the
Black Coal Mining Industry Award 2010 which regulates conditions including termination arrangements,
 
pay and
hours of work.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
28
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.
 
In addition
 
to the
 
non-exhaustive summary
 
of material
 
federal legislation
 
described below,
our operations are
 
subject to a
 
wide array of
 
federal, state and
 
local environmental
 
law, including,
 
for example,
the Safe Drinking Water Act, the Toxic
 
Substances Control Act, the Emergency Planning and Community Right-
to-Know Act, the National Historic Preservation Act of 1966 and the Migratory Bird Treaty Act of 1918, as well as
state regulatory schemes that either mirror federal law or
 
create additional layers of regulation.
Clean Air Act of 1970
The U.S.
 
Clean Air
 
Act of
 
1970, or
 
the CAA,
 
regulates airborne
 
pollution that
 
may be
 
potentially detrimental
 
to
human
 
health,
 
the
 
environment
 
or
 
natural
 
resources.
 
The
 
CAA
 
and
 
comparable
 
state
 
laws
 
that
 
govern
 
air
emissions affect U.S. coal mining operations both
 
directly and indirectly.
Direct impacts
 
on coal
 
mining and
 
processing operations
 
may occur
 
through the
 
CAA permitting
 
requirements
and/or
 
emission
 
control
 
requirements
 
relating
 
to
 
particulate
 
matter,
 
or
 
PM,
 
nitrogen
 
dioxide,
 
ozone
 
and
 
sulfur
dioxide,
 
or
 
SO
2
.
 
For
 
example,
 
the
 
U.S.
 
Environmental
 
Protection
 
Agency,
 
or
 
the
 
EPA,
 
pursuant
 
to
 
the
 
CAA,
administers rules
 
that apply
 
PM limits to
 
emissions from
 
coal preparation
 
and processing
 
plants constructed
 
or
modified after April 28, 2008.
 
In addition, in recent years,
 
the EPA
 
has adopted
 
more stringent national ambient
air quality standards, or NAAQS for PM, nitrogen oxide, ozone
 
and SO
2
. It is possible that these modifications as
well as future modifications
 
to NAAQS could directly
 
or indirectly impact our
 
mining operations in a
 
manner that
includes,
 
but
 
is
 
not
 
limited
 
to,
 
the
 
EPA
 
designating
 
new
 
areas
 
of
 
the
 
country
 
as
 
being
 
in
 
nonattainment
 
of
applicable NAAQS or expanding existing
 
nonattainment areas, and prompting
 
additional local control measures
pursuant to state
 
implementation plans, or
 
SIPs, required to
 
address such revised
 
NAAQS. SIPs may
 
be state-
specific or regional in scope.
 
Under the CAA, individual
 
states have up to
 
12 years from the
 
date of designation
of attainment/nonattainment areas to secure reductions
 
from emission sources.
 
The CAA
 
also indirectly, but significantly, affects the
 
U.S. coal
 
industry by
 
extensively regulating the
 
SO2, nitrogen
oxides, mercury,
 
PM, 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.
 
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 January 6, 2023, EPA proposed lowering the level
of the
 
annual 24-hour
 
PM2.5 standards
 
for fine
 
PM NAAQS
 
from 12.0
 
ug/m3 to
 
within the
 
range of
 
9.0 to 10.0
ug/m3. More stringent
 
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
Cross State Air Pollution Rule, or CSAPR.
 
The CAA includes a so-called Good Neighbor
 
Provision that requires
upwind states to
 
eliminate their
 
significant contributions
 
to downwind states’
 
nonattainment of the
 
NAAQS. On
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
29
July 6, 2011,
 
the EPA
 
finalized the CSAPR,
 
which was
 
meant to satisfy
 
this Good Neighbor
 
Provision. CSAPR
requires the
 
District of
 
Columbia and
 
27 states
 
from Texas
 
eastward (not
 
including the
 
New England
 
states or
Delaware) to reduce power plant emissions that
 
cross state lines and significantly contribute to ozone
 
and/or fine
particle
 
pollution
 
in
 
downwind
 
states.
 
Following
 
litigation
 
in the
 
D.C. Circuit
 
and
 
U.S. Supreme
 
Court,
 
the first
phase of
 
the nitrogen
 
oxide and
 
SO2 emissions
 
reductions required
 
by CSAPR
 
commenced in
 
January 2015;
further reductions of both pollutants in the second phase
 
of CSAPR became effective in January 2017.
 
On March 15,
 
2021, 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.
 
The EPA
 
published the final
 
MATS
 
rule in the
 
Federal Register
 
on
February 16,
 
2012.
 
The
 
MATS
 
rule
 
revised
 
the
 
New
 
Source
 
Performance
 
Standards,
 
or
 
NSPS,
 
for
 
nitrogen
oxides,
 
SO2
 
and
 
PM
 
for
 
new
 
and
 
modified
 
coal-fueled
 
electricity
 
generating
 
plants,
 
and
 
imposed
 
Maximum
Achievable Control
 
Technology,
 
or MACT,
 
emission limits
 
on hazardous
 
air pollutants,
 
or HAPs,
 
from new
 
and
existing coal-fueled and oil-fueled electricity generating plants. MACT standards limit emissions of mercury,
 
acid
gas HAPs, non-mercury HAP
 
metals and organic
 
HAPs. The rule
 
provided three years
 
for compliance with
 
MACT
standards and
 
a possible
 
fourth year
 
if a
 
state permitting
 
agency determined
 
that such
 
was necessary
 
for the
installation of controls. Though the
 
MATS rule
 
has been the subject of various
 
legal challenges, EPA
 
reaffirmed
the scientific, economic, and legal underpinnings of
 
the MATS rule in February 2023 and, in
 
April, proposed even
more stringent
 
non-mercury
 
metal surrogate
 
filterable
 
particulate matter
 
emission
 
standards
 
for all
 
coal-fueled
electricity generating plants
 
and new mercury
 
emission standards for
 
lignite-powered units. This
 
could increase
the cost of coal-fired electric power generation and
 
negatively impact the demand for coal.
Greenhouse Gas Emissions Standards
 
and Guidelines
.
 
In 2014, the EPA
 
proposed a sweeping rule, known
 
as
the “Clean
 
Power
 
Plan,” to
 
cut carbon
 
emissions
 
from existing
 
electricity
 
generating
 
units,
 
including coal-fired
power plants. Following
 
a series of legal
 
challenges, EPA
 
commenced new rulemaking
 
proceedings in October
2017, ultimately rescinding the Clean Power Plan and finalizing its replacement, the Affordable Clean Energy, or
ACE plan,
 
in June
 
2019. The
 
ACE rule
 
establishes emission
 
guidelines for
 
states to
 
develop plans
 
to address
greenhouse gas emissions from existing coal-fired power
 
plants. Like its predecessor,
 
the ACE rule was subject
to significant litigation and was remanded to EPA
 
for further action.
 
On
 
May 23,
 
2023,
 
EPA
 
issued
 
a proposed
 
rule
 
to repeal
 
ACE and
 
implement
 
sweeping
 
new
 
NSPS
 
for GHG
emissions from new, modified, and reconstructed power plants under the CAA as well as emission guidelines for
existing
 
power
 
plants.
 
The
 
proposed
 
rule
 
would
 
require
 
widespread
 
implementation
 
of
 
carbon
 
capture
 
and
sequestration, or CCS, and
 
use of green hydrogen.
 
On November 15, 2023,
 
EPA issued
 
a supplemental notice
of
 
proposed
 
rulemaking
 
to
 
request
 
additional
 
comment
 
on
 
the
 
proposal
 
following
 
publication
 
of
 
the
 
Initial
Regulatory Flexibility Analysis and completion of a Small Business Advocacy Review Panel. If implemented, the
new rules
 
would require
 
significant capital
 
expenditure
 
to develop
 
the infrastructure
 
necessary
 
for compliance
and could impact our customers and future demand for
 
coal.
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.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
30
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.
 
The EPA
 
promulgated a regional
 
haze program designed
 
to protect and
 
to improve visibility
 
at
and around Class I Areas, which are generally national parks, national wilderness areas and international parks.
This program
 
may restrict
 
the construction
 
of
 
new
 
coal-fired
 
power
 
plants,
 
the
 
operation
 
of
 
which
 
may
 
impair
visibility
 
at
 
and
 
around
 
the
 
Class
 
I
 
Areas.
 
Additionally,
 
the
 
program
 
requires
 
certain
 
existing
 
coal-fired
 
power
plants
 
to install
 
additional
 
control measures
 
designed
 
to limit
 
haze-causing
 
emissions,
 
such
 
as SO2,
 
nitrogen
oxide and PM. On August
 
30, 2022 EPA
 
issued a final action finding that
 
15 states had failed to
 
submit SIPs by
the
 
July
 
31,
 
2021
 
deadline.
 
Such
 
failure
 
triggers
 
a
 
two
 
year
 
deadline
 
for
 
EPA
 
to
 
promulgate
 
a
 
Federal
Implementation Plan unless the states submit
 
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.
 
In
 
recent
 
years,
 
EPA
proposed and promulgated several revisions to its
 
NSR regulations and policies concerning NSR permitting.
 
For
example, in
 
2022, EPA
 
proposed to
 
reconsider its
 
fugitive emissions
 
rule. Remaining
 
litigation and
 
uncertainty
around the NSR program rules could impact demand
 
for coal.
Coke Ovens.
 
Coke Oven
 
Batteries and
 
Coke Ovens:
 
Pushing, Quenching,
 
and Battery
 
Stacks are
 
two source
categories regulated by the
 
CAA. On August 16,
 
2023, EPA
 
proposed amendments to the
 
emissions standards
for Coke Ovens which would
 
lower the limits for leaks
 
from doors, lids, and offtakes, require
 
fence line monitoring
for benzene and impose new emissions standards for previously unregulated hazardous air pollutants within
 
the
category
 
such
 
as
 
hydrogen
 
chloride,
 
hydrogen
 
fluoride,
 
and
 
mercury.
 
If
 
implemented,
 
these
 
standards
 
may
impact our current and prospective customers and reduce long-term
 
demand for coal.
Clean Water Act of 1972
The U.S. Clean Water Act of 1972, or the CWA,
 
and corresponding state law governs the discharge of toxic and
non-toxic pollutants into the waters of the United States. CWA requirements
 
may directly or indirectly affect U.S.
coal mining operations.
Water Discharge.
 
The CWA and corresponding state laws affect coal mining operations by imposing restrictions
on discharges
 
of wastewater into
 
waters of
 
the 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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
31
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.
 
Many mining activities, such as the development
 
of refuse impoundments, fresh water
impoundments,
 
refuse fills,
 
and other
 
similar structures,
 
may result
 
in
 
impacts
 
to
 
waters
 
of the
 
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
proposed mining activities. The USACE may also issue individual
 
permits for mining activities that do not qualify
for Nationwide Permit 21.
For many years, there has been uncertainty surrounding the definition of “waters of the United States” the scope
of CWA
 
jurisdiction. On
 
August 29,
 
2023, EPA
 
and the
 
Department of
 
the Army
 
issued a
 
final rule
 
revising the
definition of “waters of the United States ” under
 
the CWA. This rule conforms with the Supreme Court’s decision
in Sackett
v.
Environmental
 
Protection,
 
598
 
U.S.
 
651
 
(2023). The
 
revised
 
definition
 
and
 
the
 
Supreme
 
Court’s
decision in
 
Sackett narrow
 
agency jurisdiction under
 
the CWA. However, due
 
to ongoing
 
litigation, implementation
of the
 
revised definition
 
has been
 
delayed in
 
several states
 
and territories.
 
It is
 
uncertain what
 
impact this
 
may
have on our operations.
Effluent Limitations
 
Guidelines for
 
the Steam
 
Electric Power
 
Generating Industry.
 
On September
 
30, 2015,
 
the
EPA published a
 
final rule setting new or additional requirements for
 
various wastewater discharges from steam
electric power plants.
 
The rule set
 
zero discharge
 
requirements for
 
some waste streams,
 
as well as
 
new, more
stringent limits for arsenic, mercury,
 
selenium and nitrogen applicable to certain other waste streams.
 
On August 31, 2020, the EPA finalized a rule to revise the guidelines and standards for the steam electric power
generating point source category applicable to two categories of wastewater streams regulated by
 
the 2015 rule:
flue
 
gas
 
desulfurization
 
wastewater,
 
or
 
FGD,
 
and
 
bottom
 
ash
 
transport
 
water,
 
or
 
BA.
 
With
 
respect
 
to
 
FGD,
selenium standards are
 
less stringent than
 
under the 2015
 
rule, and certain
 
types of facilities,
 
such as facilities
with
 
high
 
FGD
 
flow,
 
low
 
utilization
 
boilers
 
and
 
those
 
set
 
to
 
retire
 
coal
 
combustion
 
units,
 
are
 
subject
 
to
 
less
stringent
 
effluent
 
limits.
 
The
 
compliance
 
deadline
 
for
 
FGD
 
technology-based
 
wastewater
 
limits
 
was
 
extended
from December
 
31,
 
2023 to
 
December
 
31,
 
2025.
 
On
 
March
 
29,
 
2023, EPA
 
proposed
 
new
 
rules to
 
revise
 
the
technology-based
 
effluent
 
limitations
 
guidelines
 
and
 
standards
 
for
 
the
 
steam
 
electric
 
power
 
generating
 
point
source category
 
applicable to
 
FGD wastewater,
 
bottom ash
 
transport water,
 
and combustion
 
residual leachate
at existing
 
sources. If
 
finalized, these
 
rules could
 
significantly increase
 
costs for
 
many coal-fired
 
steam electric
power plants.
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.
 
Under the SMCRA, a
 
state may submit a
 
qualifying surface mining
 
regulatory scheme to the
 
OSM, and request
to exert
 
exclusive jurisdiction over
 
surface mining activities
 
within its territory. If
 
OSM finds that
 
the state’s scheme
meets
 
SMCRA’s
 
requirements
 
and
 
gives
 
approval,
 
the
 
state
 
becomes
 
the
 
primary
 
regulatory
 
authority
 
with
oversight from OSM. Each of Virginia, West Virginia and Pennsylvania, where our Buchanan, Logan, 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
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
32
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).
Under the SMCRA
 
and its state
 
law counterparts, all
 
coal mining applications must
 
include mandatory “ownership
and control” information,
 
which generally includes
 
listing the names of
 
the operator’s officers
 
and directors, and
its principal stockholders owning 10% or
 
more of its voting shares,
 
among others. Regulations under the SMCRA
and its
 
state analogues provide
 
that a
 
mining permit or
 
modification can,
 
under certain
 
circumstances, be delayed,
refused or revoked if we
 
or any entity that owns
 
or controls us or is
 
under common ownership or
 
control with us
have unabated permit
 
violations or
 
have been
 
the subject of
 
permit or
 
reclamation bond revocation
 
or suspension.
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.
 
Regulatory authorities
 
have considerable
 
discretion in
 
the timing
 
of the
 
permit issuance
 
and the
 
public
has
 
the
 
right
 
to
 
comment
 
on
 
and
 
otherwise
 
engage
 
in
 
the
 
permitting
 
process,
 
including
 
public
 
hearings
 
and
through
 
intervention
 
in the
 
courts. Before
 
a SMCRA
 
permit
 
is issued,
 
a mine
 
operator
 
must submit
 
a bond
 
or
other form of financial security to guarantee the performance
 
of reclamation bonding requirements.
SMCRA
 
provides
 
for
 
three
 
categories
 
of
 
bonds:
 
surety
 
bonds,
 
collateral
 
bonds
 
and
 
self-bonds.
 
For
 
our
 
U.S.
Operations,
 
we
 
meet
 
our
 
reclamation
 
bonding
 
requirements
 
by
 
posting
 
surety
 
bonds
 
and
 
participation
 
in
 
the
Commonwealth
 
of
 
Virginia
 
bond
 
pool.
 
Our
 
total
 
amount
 
of
 
reclamation
 
surety
 
bonds
 
outstanding
 
was
approximately $28.5
million as
 
of December
 
31, 2023.
 
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.
 
See Item 2. “Properties”
for information regarding reclamation and other taxes applicable
 
to our U.S. mining properties.
National Environmental Policy Act of 1969
The National Environmental Policy
 
Act of 1969,
 
or NEPA, applies to mining
 
operations or permitting requirements
that
 
require
 
federal
 
approvals
.
 
NEPA
 
defines
 
the
 
processes
 
for
 
evaluating
 
and
 
communicating
 
environmental
impact
 
of
 
“major
 
federal
 
actions”
 
significantly
 
affecting
 
the
 
quality
 
of
 
the
 
human
 
environment,
 
such
 
as
 
the
permitting of new mine
 
development on federal
 
lands. NEPA
 
requires federal agencies, such
 
as the EPA
 
or the
OSM,
 
to
 
incorporate
 
environmental
 
considerations
 
in
 
their
 
planning
 
and
 
decision-making.
 
The
 
federal
 
agency
carrying out
 
the requirements
 
of NEPA
 
must prepare
 
a detailed statement
 
assessing the
 
environmental impact
of
 
and
 
alternatives
 
to
 
the
 
particular
 
action
 
requiring
 
agency
 
approval.
 
These
 
statements
 
are
 
referred
 
to
 
as
Environmental Impact Statements or Environmental Assessments. As codified in the Fiscal Respons
 
ibility Act of
2023, environmental impact statements must include any reasonably foreseeable climate change-related effects
of
 
a
 
proposed
 
action,
 
reasonably
 
foreseeable
 
effects
 
that
 
cannot
 
be
 
avoided,
 
and
 
a
 
reasonable
 
range
 
of
alternatives. Interim guidance issued
 
in January 2023 by the
 
White House Council on Environmental
 
Quality,
 
or
the
 
CEQ,
 
instructs
 
federal
 
agencies
 
to
 
consider
 
climate
 
change
 
impacts
 
of
 
a
 
proposed
 
action,
 
including
 
both
GHG emissions and
 
reductions, and recommends
 
consideration of additional
 
context for GHG
 
emissions, such
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
33
as social cost of
 
GHG estimates.
 
It is possible that
 
future mining permitting decisions will
 
require more significant
analysis of potential climate change impacts.
Resource Conservation and Recovery Act of 1976
The
 
Resource
 
Conservation
 
and
 
Recovery
 
Act
 
of
 
1976,
 
or
 
RCRA,
 
affects
 
U.S.
 
coal
 
mining
 
operations
 
by
establishing “cradle to grave” requirements for the generation, transportation, treatment, storage
 
and disposal of
solid and
 
hazardous wastes.
 
RCRA also
 
addresses the
 
environmental effects
 
of certain
 
past hazardous
 
waste
treatment, storage
 
and disposal
 
practices, and
 
may require
 
a current
 
or past
 
site owner
 
or operator
 
to remove
improperly disposed hazardous wastes. RCRA
 
also sets forth a framework for managing certain
 
non-hazardous
solid wastes.
 
Although coal combustion residuals,
 
or CCR, are exempted
 
from regulation as a
 
hazardous waste, CCR disposal
is
 
regulated
 
under
 
RCRA.
 
On
 
December
 
19,
 
2014,
 
the
 
EPA
 
finalized
 
a
 
CCR
 
rule
 
setting
 
nationwide
 
waste
standards for CCR disposal On
 
August 24, 2018, the U.S. Court of Appeals
 
for the D.C. Circuit held that certain
provisions of the EPA’s
 
CCR rule were not sufficiently protective, and it invalidated those provisions. Since then,
the
 
EPA
 
has
 
finalized
 
changes
 
to
 
its
 
CCR
 
regulations,
 
which
 
include,
 
in
 
part,
 
regulating
 
unlined
 
ponds
 
but
extending
 
certain
 
compliance
 
deadlines
 
related
 
to
 
their
 
closure,
 
allowing
 
site-specific
 
alternate
 
liner
determinations. , and modifying
 
standards regarding beneficial use
 
and assessment of environmental
 
harm. On
May 18, 2023,
 
EPA
 
proposed new
 
regulatory requirements
 
for inactive
 
CCR surface
 
impoundments at
 
inactive
utilities that would require closure of such so-called “legacy”
 
CCR surface impoundments.
The EPA
 
regulations on CCR
 
management and disposal
 
exempt coal ash
 
that is disposed
 
of at mine
 
sites and
reserve any regulation thereof to the 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.
 
Comprehensive Environmental Response, Compensation,
 
and Liability Act of 1980
The Comprehensive Environmental Response, Compensation
 
and Liability Act of 1980, or CERCLA, authorizes
the federal
 
government and private
 
parties to
 
recover costs to
 
address threatened
 
or actual
 
releases of
 
hazardous
substances (broadly defined) that may
 
endanger public health or the
 
environment. Current owners and operators
of contaminated sites, past owners and operators
 
of contaminated sites at the time hazardous
 
substances were
disposed,
 
parties that
 
arranged
 
for the
 
disposal
 
or transport
 
of the
 
hazardous
 
substances
 
and transporters
 
of
hazardous substances
 
could be
 
potentially responsible
 
parties, or
 
PRPs, under
 
CERCLA. PRPs
 
may be
 
liable
for costs related to contaminated sites, including, but not limited to, site investigation and cleanup costs incurred
by the
 
government or
 
other parties,
 
damages to
 
natural resources
 
and costs
 
of certain
 
health assessments
 
or
studies.
 
We
 
could
 
face
 
liability
 
under
 
CERCLA
 
and
 
similar
 
state
 
laws
 
for
 
contamination
 
discovered
 
at
 
properties
 
that
(1) we currently own, lease or operate, (2) we, our
 
predecessors, or former subsidiaries have previously
 
owned,
leased or
 
operated, (3)
 
sites
 
to which
 
we, our
 
predecessors
 
or former
 
subsidiaries,
 
sent waste
 
materials, and
(4) sites at which hazardous substances from our facilities’
 
operations have otherwise come to be located.
Federal Mine Safety and Health Act of 1977
The 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.
 
MSHA continues
 
to interpret
 
and implement
 
various provisions
 
of the
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
34
MINER Act, along with introducing
 
new proposed regulations and standards.
 
For example, the second phase
 
of
MSHA’s
 
respirable
 
coal
 
mine
 
dust
 
rule
 
went
 
into
 
effect
 
in
 
February
 
2016
 
and
 
requires
 
increased
 
sampling
frequency and the use of continuous personal dust monitors.
 
In August 2016, the third and final phase of
 
the rule
became effective, reducing the overall respirable dust standard in
 
coal mines from 2.0 to 1.5
 
milligrams per cubic
meter of air.
 
In July 2023, MSHA
 
proposed regulations governing
 
respirable crystalline silica
 
which would lower
the
 
permissible
 
exposure
 
limit
 
and
 
require
 
other
 
safety
 
measures
 
such
 
as
 
exposure
 
sampling
 
and
 
medical
surveillance.
Black Lung (Coal Worker’s Pneumoconiosis)
The
 
Mine
 
Act
 
amended
 
the
 
Federal
 
Coal
 
Mine
 
Health
 
and
 
Safety
 
Act
 
of
 
1969,
 
which
 
is
 
the
 
legislation
 
that
mandates compensation
 
for miners
 
who were
 
totally and
 
permanently
 
disabled
 
by the
 
progressive
 
respiratory
disease caused
 
by coal
 
workers’
 
pneumoconiosis,
 
or
 
black lung.
 
Under
 
current
 
federal law,
 
a U.S.
 
coal
 
mine
operator must
 
pay federal
 
black lung
 
benefits and
 
medical expenses
 
to claimants
 
who are
 
current employees,
and
 
to
 
claimants
 
who
 
are
 
former
 
employees
 
who
 
last
 
worked
 
for
 
the
 
operator
 
after
 
July 1,
 
1973,
 
and
 
whose
claims for benefits are allowed. Coal mine operators must also make payments to a trust fund for
 
the payment of
benefits and medical expenses
 
to claimants who last
 
worked in the coal
 
industry prior to July 1,
 
1973. The trust
fund is funded by
 
an excise tax on sales
 
of U.S. production, excluding export
 
sales excluding export sales. Under
the Inflation Reduction
 
Act of 2022,
 
the excise tax
 
rates are 4.4%
 
of gross sales
 
price, not to
 
exceed $1.10 per
ton of underground coal and $0.55 per ton of surface coal.
In recent months,
 
the Office
 
of Workers’
 
Compensation Programs
 
has taken steps
 
to reform the
 
self-insurance
process for coal mine operators. On November 21, 2023, the Black Lung Benefits Improvement Act of 2023 was
introduced into
 
the U.S.
 
House of
 
Representatives. If
 
enacted, this
 
legislation would
 
establish stringent
 
criteria
for mine operators that seek to self-insure. Additionally, it would increase civil penalties and expand the scope of
potentially liable parties in instances where an operator
 
fails to secure benefits.
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.
Endangered Species Act of 1973
The Endangered
 
Species Act
 
of 1973
 
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.
 
Changes
 
in
 
listings
 
of
endangered species
 
or requirements
 
under these
 
regulations may impact
 
costs and our
 
ability to
 
mine at
 
locations
where endangered species are observed or may be affecte
 
d
 
by mining operations.
National Labor Relations Act of 1935
The National
 
Labor Relations
 
Act of
 
1935
, or
 
the NLRA,
 
governs collective
 
bargaining and
 
private sector
 
labor
and management relations.
 
While we do not
 
have a unionized workforce
 
in the 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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
35
Regulation of explosives
Our surface
 
mining operations
 
are subject
 
to numerous
 
regulations relating
 
to blasting
 
activities,
 
including the
Federal Safe Explosives
 
Act, or SEA. SEA
 
applies to all
 
users of explosives.
 
Knowing or willful violations
 
of the
SEA may
 
result in
 
fines, imprisonment,
 
or both.
 
In addition,
 
violations of
 
SEA may
 
result in
 
revocation of
 
user
permits and seizure or forfeiture of explosive materials. Pursuant to federal regulations, we incur costs
 
to design
and implement blast schedules and to conduct pre-blast surveys and blast monitoring. In addition, the storage of
explosives is
 
subject to
 
strict regulatory
 
requirements established
 
by four
 
different federal
 
regulatory agencies.
For example, pursuant to a rule issued by the Department of Homeland Security in 2007, facilities
 
in possession
of chemicals
 
of interest,
 
including ammonium nitrate
 
at certain
 
threshold levels, must
 
complete a
 
screening review
in
 
order
 
to
 
help
 
determine
 
whether
 
there
 
is
 
a
 
high
 
level
 
of
 
security
 
risk
 
such
 
that
 
a
 
security
 
vulnerability
assessment and site
 
security plan
 
will be
 
required. The Bureau
 
of Alcohol,
 
Tobacco and Firearms and Explosives,
or
 
ATF,
 
regulates
 
the
 
sale,
 
possession,
 
storage
 
and
 
transportation
 
of
 
explosives
 
in
 
interstate
 
commerce.
 
In
August 2023, ATF
 
proposed an amendment
 
to its regulations
 
to require annual
 
reporting of explosive
 
materials
storage
 
to
 
local
 
fire
 
authorities.
 
In
 
addition
 
to
 
ATF
 
regulation,
 
the
 
U.S.
 
Department
 
of
 
Homeland
 
Security
continues to evaluate a proposed ammonium nitrate security
 
program rule.
 
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,
 
2023
 
36
ITEM 1A.
 
RISK FACTORS.
An investment
 
in our
 
securities
 
is speculative
 
and involves
 
a number
 
of risks.
 
We
 
believe
 
the risks
 
described
below are the
 
material risks most
 
likely to affect
 
the Company.
 
However,
 
the risks described
 
below may not
 
be
the only
 
risks
 
that
 
we
 
face.
 
Additional
 
unknown
 
risks
 
or risks
 
that we
 
currently
 
consider
 
immaterial,
 
may also
impair our business operations. You should not interpret the
 
disclosure of any risk factor
 
to imply that the risk
 
has
not already
 
materialized. You
 
should carefully
 
consider the
 
specific risk
 
factors discussed
 
below,
 
together with
the information contained in this Annual Report
 
on Form 10-K, including Item 7. “Management’s
 
Discussion and
Analysis of Financial
 
Condition and
 
Results of Operations”
 
and our Consolidated
 
Financial Statements
 
and the
related notes to
 
those statements
included elsewhere
 
in this Annual
 
Report on
 
Form 10-K.
 
If any of
 
the events
or circumstances described below actually occurs,
 
our business, financial condition or
 
results of operations could
suffer, and the trading price
 
of our securities could decline significantly in future periods.
Some of these principal risk factors include:
Consummation
 
of
 
the
 
proposed
 
SGI
 
Transaction
 
may
 
constitute
 
a
 
change
 
of
 
control
 
under
 
our
 
Senior
Secured
 
Notes
 
Indenture
 
and
 
our
 
New
 
ABL
 
Facility,
 
which
 
could
 
materially
 
and
 
adversely
 
affect
 
our
business, financial condition and results of operations;
Uncertainty
 
about
 
the
 
effects
 
of
 
the
 
SGI
 
Transaction
 
may
 
affect
 
our
 
potential
 
and
 
existing
 
financial
arrangements and customer relationships, including contractual rights triggered upon a change of
 
control in
connection
 
with
 
the
 
SGI
 
Transaction,
 
and
 
may
 
materially
 
and
 
adversely
 
affect
 
our
 
business,
 
results
 
of
operations and financial condition;
Following
 
the
 
consummation
 
of
 
the
 
SGI
 
Transaction,
 
we
 
expect
 
that
 
Coronado
 
Group
 
LLC
 
and
 
SGI
 
will
have significant
 
influence over
 
corporate matters,
 
including control
 
over certain
 
decisions that
 
require the
approval of stockholders;
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;
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;
Our business may be adversely affected by the impact on the global economy due to, among other
 
events,
ongoing civil unrest, wars or other significant geopolitical tensions
;
Our profitability
 
depends upon the
 
prices we
 
receive for
 
our coal.
 
Prices for
 
coal are
 
volatile and
 
can fluctuate
widely based upon a number of factors beyond our control
;
 
Demand for our Met coal is significantly dependent on the steel
 
industry;
We face increasing competition, which could adversely
 
affect profitability;
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
;
Our
 
business,
 
financial
 
condition
 
and
 
results
 
of
 
operations
 
may
 
be
 
adversely
 
impacted
 
by
 
global
pandemics or other widespread public health concerns;
Defects
 
in
 
title
 
or
 
loss
 
of
 
any
 
leasehold
 
interests
 
in
 
our
 
properties
 
could
 
limit
 
our
 
ability
 
to
 
mine
 
these
properties or result in significant unanticipated costs;
A shortage of skilled labor in the mining industry could pose a risk to achieving improved labor productivity
;
Risks
 
inherent
 
to
 
mining
 
operations
 
could
 
impact
 
the
 
amount
 
of coal
 
produced,
 
cause
 
delay
 
or suspend
coal deliveries, or increase the cost of operating our business;
Our
 
long-term
 
success
 
depends
 
upon
 
our
 
ability
 
to
 
continue
 
discovering,
 
or
 
acquiring
 
and
 
developing
assets containing, coal reserves that are economically
 
recoverable
;
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
37
We
 
rely
 
on
 
estimates
 
of
 
our
 
recoverable
 
resources
 
and
 
reserves,
 
which
 
are
 
complex
 
due
 
to
 
geological
characteristics of the properties and the number of
 
assumptions made
;
Our profitability could be affected adversely
 
by the failure of
 
suppliers and/or outside contractors to perform;
Our
 
inability
 
to
 
replace
 
or
 
repair
 
damaged
 
or
 
destroyed
 
equipment
 
or
 
facilities
 
in
 
a
 
timely
 
manner
 
could
materially and adversely affect our financial condition and results
 
of operations;
 
Our
 
ability
 
to
 
operate
 
effectively
 
could
 
be
 
impaired
 
if
 
we
 
lose
 
key
 
personnel
 
or
 
fail
 
to
 
attract
 
qualified
personnel;
We may not have adequate insurance coverage
 
for some business risks
;
Cybersecurity attacks
 
and other
 
similar crises
 
or disruptions
 
may negatively
 
affect our
 
business, financial
condition and results of operations;
The
 
loss
 
of,
 
or
 
significant
 
reduction
 
in,
 
purchases
 
by
 
our
 
largest
 
customers
 
could
 
adversely
 
affect
 
our
revenues;
Our existing
 
and future
 
indebtedness
 
may limit
 
cash
 
flow available
 
to invest
 
in the
 
ongoing
 
needs of
 
our
businesses,
 
which could
 
prevent
 
us from
 
fulfilling
 
our
 
obligations under
 
our senior
 
secured
 
notes, senior
secured asset-based
 
revolving credit agreement
 
in an initial
 
aggregate principal
 
amount of $150.0
 
million,
or the New 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;
Sev.en Global Investment
 
Transaction Risks
Consummation
 
of the
 
proposed SGI
 
Transaction
 
may constitute
 
a change
 
of control
 
under our
 
Senior
Secured
 
Notes
 
Indenture
 
and
 
our
 
New
 
ABL
 
Facility,
 
which
 
could
 
materially
 
and
 
adversely
 
affect
 
our
business, financial condition and results of operations.
On September
 
25, 2023,
 
the Sellers
 
advised the
 
Company that
 
the Sellers
 
had entered
 
into a
 
MIPA
 
with SGI.
The Company understands that, pursuant to the terms of
 
the MIPA, the Sellers agreed to sell all of their interests
in Coronado
 
Group LLC
 
to a
 
wholly-owned subsidiary
 
of SGI
 
in the
 
SGI Transaction.
 
For further
 
description of
the
 
SGI
 
Transaction
 
refer
 
to
 
Note
 
27.
 
“Related
 
Party
 
Transactions”
 
to
 
the
 
consolidated
 
financial
 
statements
included in Part II, Item 8. “Financial
 
Statements and Supplementary Data” of this
 
Annual Report on Form 10-K,
which information is incorporated by reference herein.
 
Energy & Minerals Group has reported that following the closing of the SGI Transaction, SGI will be the direct or
indirect owner of Coronado
 
Group LLC. As of
 
the date of this
 
Annual Report on Form
 
10-K, Coronado Group LLC
is
 
the
 
direct
 
owner
 
of
 
845,061,399
 
CDIs
 
(representing
 
a
 
beneficial
 
interest
 
in
 
84,506,140
 
shares
 
of
 
common
stock, or 50.4% of the Company’s outstanding total
 
common stock) and the one Series A Share.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
38
The consummation
 
of the
 
proposed SGI
 
Transaction
 
may constitute
 
a change
 
of control
 
under the
 
Company’s
Senior Secured
 
Notes
 
Indenture,
 
dated as
 
of May
 
12,
 
2021, pursuant
 
to which
 
the Company
 
has issued
 
and
outstanding approximately $242.3
 
million aggregate principal amount
 
of its 10.750% Senior Secured
 
Notes due
2026, or the Notes, as of
 
December 31, 2023. Upon
 
a change of control, Coronado
 
Finance Pty Ltd., the issuer
of the
 
Notes, is
 
required to
 
offer
 
to repurchase
 
all or
 
any part
 
of a
 
holder’s Notes
 
at a
 
purchase price
 
in cash
equal to
 
101% of
 
the principal
 
amount thereof,
 
plus accrued
 
and unpaid
 
interest, if
 
any,
 
to, but
 
excluding, the
date of repurchase, subject to the terms and
 
conditions of the indenture. Failure to
 
consummate the repurchase
offer, whether
 
as a result of lack of sufficient
 
funds or otherwise is an event
 
of default under the Senior Secured
Notes Indenture that would accelerate
 
the maturity of the
 
Notes and permit holders
 
to pursue available remedies.
 
The
 
consummation
 
of
 
the
 
proposed
 
SGI
 
Transaction
 
may
 
also
 
constitute
 
a
 
change
 
of
 
control
 
under
 
our
Syndicated Facility
 
Agreement,
 
dated as
 
of May
 
8, 2023,
 
or the
 
New ABL
 
Facility.
 
The New
 
ABL Facility
 
is a
source of liquidity to us. Upon a change of control, the lenders under the New ABL Facility may,
 
pursuant to and
following the terms and
 
review procedures of the
 
New ABL Facility, cancel existing commitments and require any
unpaid amounts under the New
 
ABL Facility to be
 
due and payable. As of
 
December 31, 2023, the Company had
$128.1 million of available borrowings
 
under our New ABL Facility.
 
If the lenders under the
 
New ABL Facility do
not
 
consent
 
to
 
the
 
change
 
of
 
control
 
and
 
we
 
are
 
unable
 
to
 
repay
 
the
 
borrowings,
 
the
 
lenders
 
could
 
pursue
available remedies.
 
Upon consummation of the
 
SGI Transaction, we may not
 
have sufficient assets or liquidity
 
to satisfy all
 
applicable
change
 
of control
 
obligations
 
under the
 
Senior
 
Secured
 
Notes
 
Indenture,
 
the
 
New
 
ABL Facility
 
and
 
our other
indebtedness (which we
 
refer to herein
 
as the Debt
 
Repayment Obligations), and we
 
may not be
 
able to refinance
the Notes,
 
the New
 
ABL Facility
 
or such
 
other indebtedness
 
on commercially
 
reasonable terms
 
or at all,
 
which
would materially and adversely affect our business,
 
financial condition
 
and results of operations.
 
Further, any use by the Company or its subsidiaries of cash on hand or
 
any divestiture of assets of the Company
or its
 
subsidiaries to
 
satisfy the
 
Debt Repayment
 
Obligations could
 
have a
 
negative effect
 
on our
 
liquidity,
 
and
any new equity issuance
 
by the Company
 
to raise liquidity
 
to satisfy the
 
Debt Repayment Obligations
 
would be
dilutive to the Company’s existing stockholders.
 
Uncertainty
 
about
 
the
 
effects
 
of
 
the
 
SGI
 
Transaction
 
may
 
affect
 
our
 
potential
 
and
 
existing
 
financial
arrangements
 
and
 
customer
 
relationships,
 
including
 
contractual
 
rights
 
triggered
 
upon
 
a
 
change
 
of
control in
 
connection with
 
the SGI
 
Transaction,
 
and may
 
materially and
 
adversely affect
 
our business,
results of operations and financial condition.
Certain contract
 
counterparties, including
 
Stanwell, customers,
 
suppliers, third-party
 
providers and
 
employees,
may assert contractual consent
 
rights or termination rights
 
that may be
 
triggered by the consummation of
 
the SGI
Transaction. In relation
 
to the arrangements with
 
Stanwell, we are required
 
to request Stanwell’s
 
consent to the
change of control that,
 
based on information currently
 
available to us, is expected
 
to occur on consummation
 
of
the SGI
 
Transaction. Stanwell must either
 
give or refuse
 
to give consent
 
within a specified
 
period following receipt
of the request, and
 
may only refuse
 
to consent if
 
it determines, acting
 
reasonably,
 
that the SGI
 
Transaction
 
will
have
 
a
 
material
 
adverse
 
effect
 
on
 
the
 
financial
 
ability
 
of
 
us
 
to
 
perform
 
our
 
obligations
 
under
 
the
 
Stanwell
agreements.
 
In
 
circumstances
 
where
 
consent
 
is
 
not
 
obtained,
 
the
 
Company
 
would
 
seek
 
to
 
find
 
mutually
agreeable alternative terms on which Stanwell would consent
 
to the change in control.
The Company is also required to request Aurizon Network’s
 
consent to the change of control that is expected
 
to
occur on consummation
 
of the SGI
 
Transaction under the Aurizon Network
 
UT5 Rail Access
 
Agreement. A failure
to obtain
 
Aurizon Network’s
 
consent to
 
the consummation
 
of the
 
SGI Transaction
 
,
 
if required,
 
will constitute
 
a
breach of the agreement, entitling Aurizon Network to legal or equitable remedies which may include termination
of the agreement.
For a number of
 
customers and supplier agreements, including
 
contractor agreements, the completion of
 
the SGI
Transaction
 
may
 
trigger
 
a
 
financial
 
or
 
suitability
 
assessment
 
by
 
the
 
counterparty,
 
which
 
may
 
entitle
 
the
counterparty
 
to
 
terminate
 
the
 
agreement,
 
request
 
further
 
security
 
or
 
seek
 
amendments
 
to
 
the
 
terms
 
of
 
the
agreement. The
 
termination
 
of these
 
arrangements, or
 
the requirement
 
to provide
 
further security,
 
could harm
our
 
relationships
 
with
 
such
 
third
 
parties
 
and
 
could
 
have
 
a
 
material
 
adverse
 
effect
 
on
 
our
 
business,
 
financial
condition, and results of operations.
 
Consummation of the SGI
 
Transaction is
 
expected to also constitute
 
a “changed holder event”
 
for the purposes
of
 
Queensland
 
financial
 
provisioning
 
legislation
 
relating
 
to
 
rehabilitation
 
obligations
 
for
 
the
 
Curragh
 
mining
tenements, which
 
may result
 
in the
 
Queensland government
 
reviewing the
 
“risk category”
 
to which
 
the mining
tenements are allocated
 
(i.e., very low,
 
low, moderate
 
or high), which may
 
require us to
 
provide further security
to the Queensland government.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
39
Following the
 
consummation of
 
the SGI
 
Transaction, we
 
expect that
 
Coronado Group
 
LLC and
 
SGI will
have significant
 
influence over
 
corporate matters,
 
including control
 
over certain
 
decisions that
 
require
the approval of stockholders.
The Special Committee is reviewing
 
the terms of the Certificate
 
of Incorporation regarding the Series A
 
Preferred
Stock and the terms of the Stockholders Agreement dated
 
as of September 24, 2018 between the Company and
Coronado Group
 
to evaluate
 
whether the
 
rights ascribed
 
collectively to
 
the EMG
 
group thereunder
 
will inure
 
to
SGI as the new owner of the Coronado Group LLC.
 
Even apart from those rights, SGI as the indirect owner
 
of a
majority of the Company’s common stock will
 
have significant influence over corporate matters.
Further, uncertainty about the effects of
 
the SGI Transaction on counterparties
 
to contracts, employees and
 
other
parties may
 
have an
 
adverse effect
 
on us.
 
These uncertainties
 
could cause
 
contract counterparties
 
and others
who deal with us to seek to terminate or amend their existing business relationships with us, and may impair our
ability to attract, retain
 
and motivate key
 
personnel for a period
 
of time prior to
 
and following the
 
consummation
of the SGI
 
Transaction.
 
As a
 
result, uncertainties
 
regarding the
 
impact of
 
the SGI
 
Transaction
 
on our
 
business
strategy may have a material and adverse effect on
 
our business, financial condition and results of operations.
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.
 
For example,
 
the Australian
 
Government recently
 
reformed the
 
Safeguard Mechanism
 
to incentivize
 
emissions
reductions,
 
through
 
declining
 
emissions
 
limits,
 
called
 
baselines,
 
predictably
 
and
 
gradually
 
on
 
a
 
trajectory
consistent with
 
achieving the
 
Government’s emissions
 
reduction target
 
of 43%
 
below 2005
 
levels by
 
2030 and
net
 
zero
 
by
 
2050.
 
On
 
March
 
31,
 
2023,
 
the
 
Australian
 
Federal
 
Parliament
 
passed
 
the
 
Safeguard
 
Mechanism
(Crediting) Amendment Bill 2023 amending the
 
National Greenhouse and Energy Reporting
 
Act 2007 and other
legislation, to establish
 
the framework
 
to give effect
 
to key
 
elements of the
 
reforms, such
 
as introducing credits
to the scheme to provide an incentive to companies to
 
go below their baselines.
The
 
Safeguard
 
Mechanism
 
applies
 
to
 
industrial
 
facilities
 
emitting
 
more
 
than
 
100,000
 
tons
 
of
 
carbon
 
dioxide
equivalent per
 
year,
 
including in
 
electricity,
 
mining, oil
 
and gas
 
production, manufacturing,
 
transport and
 
waste
facilities.
In accordance with
 
the Safeguard Mechanism and
 
following the Federal Government’s finalization
 
of the National
Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment
 
(Reforms) Rule 2023, Curragh intends
to
 
establish
 
a
 
new
 
production-adjusted
 
(intensity)
 
baseline
 
for
 
covered
 
emissions
 
(Scope
 
1).
 
Curragh
 
will
 
be
required to take action
 
to keep its net
 
Scope 1 emissions at
 
or below the baseline
 
through emissions reduction,
by
 
for
 
example,
 
purchasing
 
Safeguard
 
Mechanism
 
Credits
 
(SMCs)
 
from
 
another
 
facility,
 
captured
 
by
 
the
Safeguard
 
Mechanism,
 
purchasing
 
and
 
surrendering
 
Australian
 
Carbon
 
Credit
 
Units
 
(ACCUs),
 
or
 
face
enforcement measures.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
40
Additionally,
 
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.
 
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.
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.”
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
 
a
material adverse effect on our reputation, financial
 
condition and results of operations.
For
 
additional
 
information
 
about
 
the
 
various
 
regulations
 
affecting
 
us,
 
see
 
Item 1.
 
“Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters
 
—United States.”
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
41
In
 
times
 
of
 
drought
 
and/or
 
shortage
 
of
 
available
 
water,
 
our
 
operations
 
and
 
production,
 
particularly
 
at
Curragh, could be negatively impacted if
 
the regulators impose restrictions on our
 
water offtake licenses
that are required for water used in the CPPs.
In Queensland, all 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.
Economic, Competitive and Industry Risks
Our
 
business
 
may
 
be
 
adversely
 
affected
 
by
 
the
 
impact
 
on
 
the
 
global
 
economy
 
due
 
to,
 
among
 
other
events, ongoing civil unrest, wars or other significant
 
geopolitical tensions.
Geopolitical tensions, ongoing civil unrest and wars can have
 
a significant impact on global markets, influencing
both the
 
supply
 
and
 
demand
 
of coal
 
we sell
 
into the
 
export market
 
and the
 
cost
 
or availability
 
of supplies
 
we
consume in producing our coal.
 
For example, global markets
 
are experiencing volatility
 
and disruption with current
 
geopolitical tensions and the
military invasion of
 
Ukraine by Russia.
 
This military conflict
 
led to sanctions
 
and other penalties
 
being levied by
the United States, the European Union and other countries against Russia, including expansive bans on imports
and exports of products to and from Russia.
 
The
 
extent
 
and
 
duration
 
of
 
such
 
conflicts
 
could
 
lead
 
to
 
market
 
disruptions,
 
including
 
significant
 
volatility
 
in
commodity prices, such as
 
the coal we
 
sell and diesel fuel
 
we purchase, instability in
 
the financial markets, higher
inflation,
 
supply
 
chain
 
interruptions,
 
political
 
and
 
social
 
instability
 
as
 
well
 
as
 
an
 
increase
 
in
 
cyberattacks
 
and
espionage.
Our
 
profitability
 
depends
 
upon
 
the
 
prices we
 
receive
 
for our
 
coal.
 
Prices
 
for
 
coal are
 
volatile
 
and
 
can
fluctuate widely based upon a number of factors beyond
 
our control.
We generate
 
revenue from
 
the sale
 
of coal
 
and our
 
financial
 
results
 
are materially
 
impacted by
 
the prices
 
we
receive.
 
Prices
 
and
 
quantities
 
under
 
Met
 
coal
 
sales
 
contracts
 
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.
 
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;
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
42
 
competition from other coal suppliers;
 
technological advances affecting the steel production
 
process and/or energy consumption;
 
the costs, availability and capacity of transportation infrastructure;
 
and
 
the impact
 
of domestic
 
and foreign
 
governmental policy,
 
laws and
 
regulations, including
 
the imposition
of tariffs, environmental
 
and climate change
 
regulations and
 
other regulations
 
affecting the
 
coal mining
industry,
 
including regulations and measures introduced in response
 
to global pandemics.
Met coal has
 
been a volatile
 
commodity over the
 
past ten years.
 
Although coking coal
 
index prices improved
 
in
the second
 
half of
 
2023 due
 
to tight
 
supply,
 
on average
 
coking coal
 
prices were
 
significantly lower
 
than 2022
when
 
supply
 
in
 
global
 
met
 
coal
 
market
 
was
 
readjusting
 
from
 
the
 
impact
 
of
 
the
 
Russia
 
and
 
Ukraine
 
war.
 
The
demand and supply in the Met
 
coal industry changes from time to time.
 
There are no assurances that oversupply
will not
 
occur,
 
that demand
 
will not
 
decrease or
 
that overcapacity
 
will not
 
occur,
 
which could
 
cause declines
 
in
the prices of coal,
 
which could have a material adverse
 
effect on our financial condition and
 
results of operations.
In addition, coal prices are highly
 
dependent on the outlook for coal consumption in
 
large Asian economies, such
as China, India, South Korea and Japan,
 
as well as any changes in government
 
policy regarding coal or energy
in those
 
countries.
 
Seaborne
 
Met coal
 
import
 
demand
 
can also
 
be significantly
 
impacted by
 
the
 
availability
 
of
local coal production, particularly in the leading Met coal import countries of China and India, among others, and
the
 
competitiveness
 
of
 
seaborne
 
Met
 
coal
 
supply,
 
including
 
from
 
the
 
leading
 
Met
 
coal
 
exporting
 
countries
 
of
Australia, the United States, Russia, Canada and Mongolia,
 
among others.
 
Demand for our Met coal is significantly dependent on
 
the steel industry.
The majority of
 
the coal that
 
we produce
 
is Met coal
 
that is
 
sold, directly
 
or indirectly,
 
to steel
 
producers and
 
is
used in 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.”
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
43
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.
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. There
 
can be
 
no guarantee
 
that tariffs,
 
import quota
 
restrictions, bans
 
or other
 
trade barriers
 
will
not be
 
imposed (whether
 
as a
 
result of
 
geopolitical tensions
 
or for
 
other reasons)
 
for our
 
products. We
 
may or
may
 
not
 
be
 
able
 
to
 
access
 
alternate
 
markets
 
for
 
our
 
coal should
 
interruptions
 
and
 
trade
 
barriers
 
occur
 
in
 
the
future. An inability
 
for Met
 
coal suppliers
 
to access
 
international markets
 
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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
44
 
terrorist attacks, natural disasters, the impact from global pandemics
 
or other events.
Any
 
such
 
disruptions,
 
or
 
any
 
deterioration
 
in
 
the
 
reliability
 
of
 
services
 
provided
 
by
 
our
 
transportation
 
service
providers, could
 
impair our
 
ability to
 
supply coal
 
to our
 
customers, result
 
in decreased
 
shipments and
 
revenue
and adversely affect our results of operations.
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, 2023.
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 our profitability could
be reduced or we could experience a delay or halt in
 
our production.
Prices
 
for equipment,
 
materials,
 
supplies
 
and employee
 
labor
 
contractor
 
services
 
increased during
 
2023,
 
and
could
 
continue
 
to
 
increase
 
in
 
2024
 
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
45
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.
Our
 
business,
 
financial
 
condition
 
and
 
results
 
of
 
operations
 
may
 
be
 
adversely
 
impacted
 
by
 
global
pandemics or other widespread public health concerns.
Global pandemics
 
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 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.
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, 2024 to July
 
31, 2044 and, where renewal
 
is required, there is a
 
risk that
the Queensland government may change the terms and conditions
 
of such Tenement
 
upon renewal.
In
 
the
 
United
 
States,
 
title
 
to
 
a
 
leased
 
property
 
and
 
mineral
 
rights
 
is
 
generally
 
secured
 
prior
 
to
 
permitting
 
and
developing a property. In some cases,
 
we rely on title information or representations and warranties provided by
our lessors, grantors
 
or other third
 
parties. Our right
 
to mine some
 
of our reserves
 
may be adversely
 
affected if
defects in
 
title or
 
boundaries
 
exist or
 
if a
 
lease expires.
 
Any challenge
 
to our
 
title or
 
leasehold interests
 
could
delay the exploration and development of the property and could ultimately result in the loss of some
 
or all of our
interest in the property and, accordingly, require us to reduce our estimated coal
 
reserves. In addition, if we mine
on property that we do not
 
own or lease, we could incur
 
civil damages or liability for
 
such mining and be subject
to conversion, negligence,
 
trespass, regulatory sanction
 
and penalties. Some
 
leases have minimum
 
production
requirements or require us
 
to commence mining operations in
 
a specified term to
 
retain the lease. Failure
 
to meet
those requirements
 
could result
 
in losses of
 
prepaid royalties
 
and, in some
 
rare cases,
 
could result
 
in a loss
 
of
the lease itself.
In
 
the
 
United
 
States,
 
we
 
predominantly
 
access
 
our
 
mining
 
properties
 
through
 
leases
 
with
 
a
 
range
 
of
 
private
landholders.
 
If
 
a
 
default
 
under
 
a
 
lease
 
for
 
properties
 
on
 
which
 
we
 
have
 
mining
 
operations
 
resulted
 
in
 
the
termination of the
 
applicable lease,
 
we may
 
have to suspend
 
mining or significantly
 
alter the sequence
 
of such
mining operations, which may adversely affect our
 
future coal production and future revenues.
To
 
obtain
 
leases
 
or
 
mining
 
contracts
 
to
 
conduct
 
our
 
U.S.
 
Operations
 
on
 
properties
 
where
 
defects
 
exist
 
or
 
to
negotiate extensions or amendments
 
to existing leases, we
 
may in the future have
 
to incur unanticipated costs.
In addition, we may
 
not be able
 
to successfully negotiate new leases
 
or mining contracts for
 
properties containing
additional
 
reserves
 
or
 
maintain
 
our
 
leasehold
 
interests
 
in
 
properties
 
where
 
we
 
have
 
not
 
commenced
 
mining
operations during the term of the lease.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
46
A defect in our title or the loss of any lease or Tenement
 
upon expiration of its term, upon a default or otherwise,
could adversely affect our ability to mine the associated
 
reserves or process the coal we mine.
We may
 
be unable
 
to obtain,
 
renew or
 
maintain permits necessary
 
for our
 
operations, which
 
would reduce
coal production, cash flows and profitability.
Our performance
 
and
 
operations
 
depend
 
on, among
 
other things,
 
being able
 
to
 
obtain on
 
a timely
 
basis,
 
and
maintain,
 
all
 
necessary
 
regulatory
 
approvals,
 
including
 
any
 
approvals
 
arising
 
under
 
applicable
 
mining
 
laws,
environmental regulations and
 
other laws, for our
 
current operations, expansion
 
and growth projects. Examples
of regulatory
 
approvals that
 
we must
 
obtain and
 
maintain include
 
mine development
 
approvals, environmental
permits and, in
 
Australia, tenure and approvals
 
relating to native
 
title and indigenous cultural
 
heritage. In addition,
our operations depend
 
on our ability
 
to obtain and
 
maintain consents from private
 
land owners and
 
good relations
with local communities.
The requirement
 
to obtain
 
and maintain
 
approvals and
 
address potential
 
and actual
 
issues for
 
former,
 
existing
and future
 
mining
 
projects
 
is common
 
to all
 
companies
 
in the
 
coal sector.
 
However,
 
there is
 
no assurance
 
or
guarantee that we
 
will obtain,
 
secure, or be
 
able to maintain
 
any or all
 
of the required
 
consents, approvals
 
and
rights necessary to maintain our current
 
production profile from our existing
 
operations or to develop our
 
growth
projects
 
in a
 
manner
 
which
 
will result
 
in
 
profitable
 
mining
 
operations
 
and/or
 
achieve
 
our long-term
 
production
targets. The permitting rules, and
 
the interpretations of these rules,
 
are complex, change frequently and
 
are often
subject to the interpretation of the regulators that
 
enforce them, all of which may make compliance more
 
difficult
or impractical,
 
and may
 
possibly preclude
 
the continuance
 
of ongoing
 
operations or
 
the development
 
of future
mining operations. Certain
 
laws, such as
 
the 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 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.
If we
 
are unable
 
to obtain
 
and maintain
 
the approvals,
 
consents and
 
rights required
 
for our
 
current and
 
future
operations,
 
or if
 
we obtain
 
approvals subject
 
to conditions
 
or limitations,
 
the
 
economic
 
viability of
 
the relevant
projects may be
 
adversely affected,
 
which may in
 
turn result in
 
the value of
 
the relevant assets
 
being impaired,
which could have a material adverse effect
 
on our financial condition and results of operations.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
47
A
 
shortage
 
of
 
skilled
 
labor
 
in
 
the
 
mining
 
industry
 
could
 
pose
 
a
 
risk
 
to
 
achieving
 
improved
 
labor
productivity.
Efficient coal mining using modern techniques and equipment requires
 
skilled workers, preferably with at least a
year of experience and proficiency in multiple
 
mining tasks. Any reduced availability or future
 
shortage of skilled
labor in the
 
Australian and U.S.
 
mining industries could
 
result in us
 
having insufficient
 
personnel to operate
 
our
business, or expand
 
production, particularly
 
in the event
 
there is an
 
increase in the
 
demand for our
 
coal, which
could adversely affect our financial condition and results
 
of operations.
Operational and Technology
 
Risks
Risks inherent to mining operations could impact the amount of coal produced,
 
cause delay or suspend
coal deliveries, or increase the cost of operating our
 
business.
Our
 
mining
 
operations,
 
including
 
exploration,
 
development,
 
preparation,
 
product
 
handling
 
and
 
accessing
transport infrastructure,
 
may be affected
 
by various operational
 
difficulties that
 
could impact the
 
amount of coal
produced at our coal mines, cause
 
delay or suspend coal deliveries, or increase
 
the cost of mining for a varying
length of time.
 
Our financial performance
 
is dependent
 
on our ability
 
to sustain or
 
increase coal production
 
and
maintain or increase operating margins. Our coal production and production costs are, in
 
many respects, subject
to conditions and events beyond our control, which could disrupt our operations
 
and have a significant impact on
our financial results. Adverse operating conditions and
 
events that we may have experienced in the past
 
or may
experience in the future include:
 
a failure to achieve the Met coal qualities or quantities
 
anticipated from exploration activities;
 
variations in
 
mining and
 
geological
 
conditions from
 
those anticipated,
 
such as
 
variations in
 
coal seam
thickness and quality,
 
and geotechnical conclusions;
 
operational and technical
 
difficulties encountered in mining,
 
including equipment failure,
 
delays in moving
longwall equipment, drag-lines and other equipment and maintenance
 
or technical issues;
 
adverse weather conditions
 
or natural or
 
man-made disasters, including
 
hurricanes, cyclones, tornadoes,
floods, droughts, bush
 
fires, seismic activities,
 
ground failures, rock
 
bursts, structural cave-ins
 
or slides
and other catastrophic events (such as global pandemics);
 
insufficient or unreliable infrastructure, such as power,
 
water and transport;
 
industrial and
 
environmental accidents,
 
such as
 
releases of
 
mine-affected water
 
and diesel
 
spills (both
of which have affected our Australian Operations
 
in the past);
 
industrial disputes and labor shortages;
 
mine safety accidents, including fatalities, fires and explosions
 
from methane and other sources;
 
competition
 
and
 
conflicts
 
with
 
other
 
natural
 
resource
 
extraction
 
and
 
production
 
activities
 
within
overlapping operating areas, such as natural gas extraction
 
or oil and gas development;
 
unexpected shortages, or increases in the costs, of consumables,
 
spare parts, plant and equipment;
 
cyber-attacks that could disrupt systems we rely on for
 
our operations; 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,
 
2023
 
48
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;
 
geopolitical risks;
 
commercial objectives not being achieved as expected;
 
unforeseen liabilities arising from changes to the portfolio;
 
sales revenues and operational performance not meeting
 
expectations;
 
anticipated synergies or cost savings being delayed or not
 
being achieved; and
 
inability to retain key staff and transaction-related costs
 
being more than anticipated.
These factors could materially and adversely affect
 
our financial condition and results of operations.
We rely
 
on estimates
 
of our
 
recoverable resources
 
and reserves,
 
which are
 
complex due
 
to geological
characteristics of the properties and the number of
 
assumptions made.
We rely on estimates of our recoverable resources and reserves.
 
In this Annual Report on Form 10-K, we report
our estimated resources
 
and reserves in
 
accordance with
 
subpart 1300
 
of Regulation S-K
 
under the Exchange
Act. See Item
 
2. “Properties.”
 
Subpart 1300 of
 
Regulation S-K requires
 
us to disclose
 
our mineral resources,
 
in
addition to
 
our mineral reserves.
 
In addition,
 
as an
 
ASX-listed company, our ASX disclosures
 
follow the Australian
Code
 
for
 
Reporting
 
of
 
Exploration
 
Results,
 
Mineral
 
Resources
 
and
 
Ore
 
Reserves
 
2012,
 
or
 
the
 
JORC
 
Code.
Accordingly,
 
our estimates
 
of resources
 
and reserves
 
in this
 
Annual Report
 
on Form
 
10-K and
 
in other
 
reports
that
 
we
 
are
 
required
 
to
 
file
 
with
 
the
 
SEC
 
may
 
be
 
different
 
than
 
our
 
estimates
 
of
 
resources
 
and
 
reserves
 
as
reported in our ASX disclosures.
Coal
 
is
 
economically
 
recoverable
 
when
 
the
 
price
 
at
 
which
 
it
 
can
 
be
 
sold
 
exceeds
 
the
 
costs
 
and
 
expenses
 
of
mining
 
and
 
selling
 
the
 
coal.
 
The
 
costs
 
and
 
expenses
 
of
 
mining
 
and
 
selling
 
the
 
coal
 
are
 
determined
 
on
 
a
mine-by-mine basis, and as a result, the price at which our coal is economically recoverable varies based on the
mine. We
 
base our resource
 
and reserve
 
information on geologic
 
data, coal ownership
 
information and current
and
 
proposed
 
mine
 
plans,
 
and
 
mining
 
cost
 
assumptions
 
may
 
be
 
affected
 
by
 
changes
 
in
 
mine
 
planning
 
or
scheduling over
 
time. There
 
are numerous
 
uncertainties
 
inherent in
 
estimating
 
quantities
 
and qualities
 
of coal
and
 
costs
 
to
 
mine
 
recoverable
 
reserves,
 
including
 
many
 
factors
 
beyond
 
our
 
control.
 
There
 
are
 
inherent
uncertainties and risks associated with such estimates, includi
 
ng:
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
49
 
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 and
 
Golding Contractors Pty Ltd.
Operations
 
at
 
our
 
mines
 
may
 
be
 
interrupted
 
for
 
an
 
extended
 
period
 
in
 
the
 
event
 
that
 
we
 
lose
 
any
 
of
 
our
 
key
contractors (because their
 
contract is terminated or
 
expires) and are required
 
to replace them. There
 
can be no
assurance that skilled third parties
 
or contractors will continue
 
to be available at reasonable
 
rates. As we do not
have the
 
same control
 
over contractors
 
as we
 
do over
 
employees, we
 
are also
 
exposed to
 
risks related
 
to the
quality or
 
continuation of
 
the services
 
of, and
 
the equipment
 
and supplies
 
used by,
 
our contractors,
 
as well
 
as
risks related
 
to the
 
compliance of our
 
contractors with environmental
 
and health and
 
safety legislation and
 
internal
policies, standards and
 
processes. Any failure
 
by our key
 
contractors to comply
 
with their obligations
 
under our
operating agreements with
 
them (whether as a
 
result of financial, safety
 
or operational difficulties
 
or otherwise),
any
 
termination
 
or
 
breach
 
of
 
our
 
operating
 
agreements
 
by
 
our
 
contractors,
 
any
 
protracted
 
dispute
 
with
 
a
contractor, any inability to perform due to global pandemics or other health concerns,
 
any material labor dispute
between
 
our
 
contractors
 
and
 
their
 
employees
 
or
 
any
 
major
 
labor
 
action
 
by
 
those
 
employees
 
against
 
our
contractors, could have a material adverse effect
 
on our financial condition and results of operations.
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
50
Our inability to replace or
 
repair damaged or destroyed
 
equipment or facilities in
 
a timely manner could
materially and adversely affect our financial condition
 
and results of operations.
We depend on several
 
major pieces of mining
 
equipment and facilities to
 
produce and transport coal,
 
including,
but
 
not
 
limited
 
to,
 
longwall
 
mining
 
systems,
 
continuous
 
miners,
 
draglines,
 
dozers,
 
excavators,
 
shovels,
 
haul
trucks, conveyors,
 
CPPs and
 
rail loading
 
and blending
 
facilities. Obtaining
 
and repairing
 
these major
 
pieces of
equipment often involves long lead
 
times. If any of these
 
pieces of equipment and facilities suffers major
 
damage
or is destroyed by fire,
 
abnormal wear and tear,
 
flooding, incorrect operation or
 
otherwise, we may be unable
 
to
replace or repair them in a timely manner or at a reasonable cost, which would impact our ability
 
to produce and
transport
 
coal
 
and
 
could
 
materially
 
and
 
adversely
 
affect
 
our financial
 
condition
 
and
 
results
 
of
 
operations.
 
Our
ability to replace or
 
repair damaged or destroyed
 
equipment or facilities
 
may also be dependent
 
on suppliers or
manufacturers remaining operational and having the relevant equipment, work force or services available for us.
Suppliers
 
and
 
manufacturers
 
may be
 
unable
 
to
 
provide
 
such
 
equipment,
 
work
 
force
 
or service
 
for
 
a
 
range
 
of
reasons, including but not limited to their business suffering
 
adverse effects as a result of global pandemics.
 
Additionally, regulatory agencies sometimes make changes with regard to requirements for pieces of
 
equipment.
Such changes can impose costs on us and can cause delays if manufacturers and suppliers are unable to make
the required changes in compliance with mandated deadlines.
Our
 
ability to
 
operate effectively
 
could
 
be impaired
 
if we
 
lose key
 
personnel
 
or fail
 
to
 
attract qualified
personnel.
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,
 
Douglas
 
Thompson,
 
our Group
 
Chief
 
Operating
Officer, Jeffrey Bitzer and our Group
 
Chief Financial Officer and Head
 
of Marketing and Strategy, Gerhard Ziems.
 
Mr. Thompson’s,
 
Mr. Bitzer’s and Mr. Ziems’ 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.
 
Although all
 
our Australian
based employees
 
have contracts
 
of employment,
 
in the
 
United States,
 
we have
 
not entered
 
into employment
contracts
 
with
 
any
 
of
 
our key
 
personnel
 
(other
 
than
 
Mr. Bitzer,
 
Mr.
 
Christopher
 
Meyering,
 
our
 
Vice
 
President,
Chief Legal
 
Officer and
 
Mr.
 
Brett Holbrook,
 
our Vice
 
President Operations
 
U.S.), 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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
51
Cybersecurity
 
attacks
 
and
 
other
 
similar
 
crises
 
or
 
disruptions
 
may
 
negatively
 
affect
 
our
 
business,
financial condition and results of operations.
Our
 
business
 
may be
 
impacted
 
by cybersecurity
 
attacks
 
or failures.
 
Strategic
 
targets,
 
such
 
as
 
energy-related
assets, may
 
be at greater
 
risk of
 
cybersecurity attacks
 
than other targets
 
in the United
 
States or
 
Australia. Our
insurance may
 
not protect
 
us against
 
such occurrences.
 
It is
 
possible that
 
any such
 
occurrences could
 
have a
material adverse effect on our business, financial
 
condition and results of operations.
In addition, a disruption in,
 
or failure of, our information
 
technology 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.
Financial and Strategic Risks
The loss
 
of, or
 
significant reduction
 
in, purchases
 
by our
 
largest customers
 
could adversely
 
affect our
revenues.
A significant portion of the sales of our Met coal is to
 
customers with whom we have had long-term relationships.
The success of our business depends on our
 
ability to retain our current customers, renew our existing customer
contracts
 
and
 
solicit
 
new
 
customers.
 
Our
 
ability
 
to
 
do
 
so
 
generally
 
depends
 
on
 
a
 
variety
 
of
 
factors,
 
including
having our mines
 
operational, having the type
 
and quantity of
 
coal available, the quality
 
and price of
 
our products,
our ability to market these products effectively, our ability to deliver on a timely basis and the level of competition
that we face.
In addition, our
 
sales contracts
 
generally contain
 
provisions that
 
allow customers
 
to suspend or
 
terminate if
 
we
commit a material breach of the terms of the contract, a change in law
 
restricts or prohibits a party from carrying
out its
 
material obligations
 
under the
 
contract or
 
a material
 
adverse change
 
occurs in
 
our financial
 
standing or
creditworthiness. If customers suspend
 
or terminate existing contracts,
 
or otherwise refuse to accept
 
shipments
of our Met
 
coal for which
 
they have an
 
existing contractual
 
obligation, our revenues
 
will decrease, and
 
we may
have to reduce production at our mines until our customers’
 
contractual obligations are honored.
For the
 
year ended
 
December 31,
 
2023, our
 
top ten
 
customers comprised
 
74.2% of
 
our total
 
revenue and
 
our
top five customers comprised
 
53.3% of our total revenue. For the year ended December
 
31, 2023, sales to Tata
Steel and AcelorMittal represented
 
20.5% and 10.0%,
 
respectively, of our total revenue. The
 
majority of our
 
sales
are made
 
on
 
a spot
 
basis
 
or under
 
contracts
 
with
 
terms
 
of typically
 
one
 
year.
 
The
 
failure
 
to
 
obtain
 
additional
customers or the
 
loss of all
 
or a portion
 
of the revenues
 
attributable to any
 
customer as a
 
result of competition,
creditworthiness,
 
inability
 
to
 
negotiate
 
extensions,
 
replacement
 
of
 
contracts
 
or
 
the
 
impact
 
of
 
the
 
global
pandemics, or otherwise, may adversely affect our
 
business, financial condition and results of operations.
If our ability
 
to collect
 
payments from
 
customers is
 
impaired, our
 
revenues and
 
operating profits
 
could
suffer.
Our
 
ability
 
to
 
receive
 
payment
 
for
 
coal
 
sold
 
and
 
delivered
 
will
 
depend
 
on
 
the
 
continued
 
creditworthiness
 
and
contractual performance of our customers and counterparties. For certain customers, we require the provision of
a letter of credit as
 
security for payment. The inability of key customers
 
to procure letters of credit (due
 
to general
economic conditions or the
 
specific circumstances of the
 
customer) may restrict our
 
ability to contract with such
customers or result in fewer sales contracts being executed, which could materially 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.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
52
If a customer
 
does not
 
pay amounts
 
due in
 
a timely
 
manner,
 
we may
 
decide to sell
 
the customer’s coal
 
on the
spot market, which may be
 
at prices lower than the contracted
 
price, or we may be unable
 
to sell the coal at all.
If our customers’ or counterparties’ creditworthiness deteriorates,
 
our business could be adversely affected.
 
Changes in credit
 
ratings issued by
 
nationally recognized statistical
 
rating organizations could
 
adversely
affect our cost of financing and the market price
 
of our securities.
 
Credit rating agencies
 
could downgrade our ratings
 
due to factors specific
 
to our business,
 
a prolonged cyclical
downturn in the
 
mining industry or
 
macroeconomic trends
 
(such as global
 
or regional recessions)
 
and trends in
credit and
 
capital markets
 
more generally.
 
Any decline
 
in our credit
 
ratings would
 
likely result
 
in an
 
increase to
our cost of financing, limit our access to the capital markets, significantly harm our financial condition and results
of operations,
 
hinder
 
our ability
 
to refinance
 
existing
 
indebtedness
 
on
 
acceptable
 
terms
 
and
 
have an
 
adverse
effect on the market price of our securities.
Our existing and future indebtedness may limit cash flow available to invest in the ongoing needs of our
businesses, which could
 
prevent us
 
from fulfilling our
 
obligations under our
 
senior secured notes,
 
senior
secured asset-based revolving
 
credit agreement in
 
an initial
 
aggregate principal amount
 
of $150.0
 
million,
or
 
the
 
New
 
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,
 
2023,
 
we
 
had
 
$242.3
 
million
 
aggregate
 
principal
 
amount
 
of
 
our
 
senior
 
secured
 
notes
outstanding. As of December 31, 2023, the
 
letter of credit sublimit had been partially used
 
to issue $21.9 million
of bank guarantees on behalf of the Company and no amounts were drawn under the revolving credit sublimit of
the New ABL Facility.
 
As of December 31, 2023,
 
the available borrowing
 
capacity under this facility
 
was $128.1
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.
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.
Our ability to service
 
our debt obligations
 
could be impacted
 
by the consummation
 
of the SGI Transaction.
 
See
“—Consummation of the
 
proposed SGI Transaction may constitute
 
a change of
 
control under our
 
Senior Secured
Notes Indenture
 
and our
 
New ABL
 
Facility,
 
which could
 
materially and
 
adversely affect
 
our business,
 
financial
condition and results of operations.”
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
53
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 New
 
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,
 
recently,
 
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
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.
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
54
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, five WICET Holdings
Pty Ltd shipper-shareholders
 
have defaulted on their
 
obligations under their respective
 
take-or-pay agreements
and
 
subsequently
 
had
 
those
 
agreements
 
terminated.
 
The
 
result
 
of
 
these
 
terminations
 
is
 
a
 
decrease
 
in
 
the
aggregate contracted tonnage at WICET from 27 MMtpa to
 
13.9 MMtpa.
Given the
 
operation
 
of the
 
finance cap
 
(which
 
has been
 
reached,
 
subject
 
to further
 
adjustment
 
for Consumer
Price Index,
 
or CPI) there
 
is a
 
limit to the
 
recovery by
 
WICET of its
 
financing costs
 
from shippers. Accordingly,
prior defaults referred
 
to above have
 
resulted in only
 
minor increases to
 
the terminal handling
 
charges payable
by the remaining
 
shipper shareholders (including us).
 
These increases have related
 
to higher A$/ton (or
 
US$/ton)
charge for
 
operating
 
costs
 
resulting
 
from
 
a
 
lower
 
contract
 
base.
 
If
 
any of
 
the
 
remaining
 
shipper
 
shareholders
becomes
 
insolvent
 
and/or
 
defaults
 
under
 
its
 
take-or-pay
 
agreement,
 
the
 
terminal
 
handling
 
charges
 
for
 
the
remaining shipper shareholders, including us, may increase proportionately to pay the defaulting shipper’s share
of WICET’s
 
operating
 
and
 
financing costs
 
going forward
 
(noting that
 
the
 
finance cap
 
applies
 
in respect
 
of the
financing costs component of the terminal handling charges).
In addition, if we default under the WICET Take
 
-or-Pay Agreement and that default is not remedied, then we will
be obligated
 
to pay
 
a termination
 
payment. The
 
termination payment
 
is equal
 
to the
 
lesser of
 
our proportion
 
of
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.
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 expiration
 
date of the NCSA)
 
be equal to the net
 
present value of A$210
 
million as at the date
 
of
the Supply Deed.
 
No export rebates
 
are payable during
 
the term
 
of the NCSA.
 
The amortized cost
 
of the deferred
consideration was $277.4 million (A$405.6 million) as of December
 
31, 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
55
Stanwell may assert contractual consent rights
 
or termination rights that may be triggered
 
by the consummation
of the Stanwell Transaction. See “—Uncertainty about the effects of the SGI Transaction may affect our potential
and
 
existing
 
financial
 
arrangements
 
and
 
customer
 
relationships,
 
including
 
contractual
 
rights
 
triggered
 
upon
 
a
change of control in connection with the SGI Transaction, and may materially and adversely affect our business,
results of operations and financial condition”.
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, 2023,
 
we provided $44.0
 
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. There can be no
 
assurance that our risk category
 
allocation
will not change in future years.
 
For more information on the Financial Provisioning Act, see Item 1.
 
“Business—Regulatory Matters—Australia—
Environmental Protection Act 1994 (Qld).”
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,
 
2023
 
56
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
 
$163.9 million
 
as of
 
December 31,
 
2023,
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
 
Secured
 
Overnight
 
Financing
 
Rate,
 
or
 
SOFR,
 
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. The U.S-dollar
 
LIBOR was discontinued in June 2023. The Alternative
Reference Rates Committee has proposed SOFR as its
 
recommended alternative to LIBOR.
 
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
57
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,
 
2023, we
 
had 1,878
 
employees.
 
In addition,
 
as of
 
December 31,
 
2023, there
 
were 2,335
contractors
 
supplementing
 
the
 
permanent
 
workforce,
 
primarily
 
at
 
Curragh.
 
As
 
of
 
December
 
31,
 
2023,
approximately
 
10.8%
 
of our
 
total employees,
 
all at
 
our
 
Australian Operations,
 
were represented
 
by organized
labor unions and covered by the
 
EA. In July 2023, the Australian Fair
 
Work Commission approved the
 
four year
Curragh Mine
 
Enterprise Agreement
 
2023. This
 
EA has
 
a four-year
 
expiration date
 
and will
 
remain in
 
place by
operation of
 
the Fair
 
Work Act
 
2009 (Cth)
 
until replaced
 
or terminated
 
by the Fair
 
Work Commission.
 
Our U.S.
Operations employ a 100% non-union labor force.
Future industrial
 
action by
 
our employees
 
or mining
 
contractors’ employees or
 
involving trade unions
 
could disrupt
operations and negatively impact mine productivity,
 
production and profitability.
Our operations
 
may impact
 
the environment
 
or cause
 
exposure to
 
hazardous substances,
 
which could
result in material liabilities to us.
We are
 
subject to
 
extensive environmental
 
laws and
 
regulations,
 
and our
 
operations may
 
substantially
 
impact
the
 
environment
 
or
 
cause
 
exposure
 
to
 
hazardous
 
materials
 
to
 
our
 
contractors,
 
our
 
employees
 
or
 
local
communities. We use hazardous materials
 
and generate hazardous or other regulated
 
waste, which we store in
our storage or disposal
 
facilities. We may become subject to
 
statutory or common law claims
 
(including damages
claims) as
 
a result
 
of
 
our
 
use of
 
hazardous
 
materials
 
and generation
 
of hazardous
 
waste.
 
A number
 
of laws,
including, in
 
the United
 
States, the
 
CERCLA or
 
Superfund, and
 
the RCRA,
 
and in
 
Australia, the
 
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
58
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.
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
59
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, 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 $56.2
 
million
 
(A$82.2
 
million)
 
plus
 
unpaid
 
tax
 
interest.
 
On
November 23, 2022, the Company filed an objection to the assessment.
 
On January 9, 2024, the Company’s objection
 
to the assessed stamp duty was disallowed by the
 
QRO.
The Company, based on legal
 
and valuation advice
 
obtained, continues to
 
maintain its position
 
and the estimated
stamp duty payable of $29.4 million (A$43.0 million) on
 
the Curragh acquisition.
 
As per the Taxation
 
Administration Act (Queensland)
 
2001, the Company
 
can only appeal
 
or apply for a
 
review
of QRO’s
 
decision if
 
it has
 
paid the
 
total assessed
 
stamp duty
 
of $56.2
 
million (A$82.2
 
million) plus
 
unpaid tax
interest of $14.5 million (A$21.2 million). Such appeal
 
must be lodged by March 11,
 
2024.
 
The Company
 
disputes the
 
additional amount
 
assessed of
 
stamp duty
 
and unpaid
 
tax interest
 
and is
 
currently
considering its options to either appeal the decision to the Supreme Court of
 
Queensland or apply for a review of
QRO’s decision by the Queensland Civil and
 
Administrative Tribunal.
 
Given that
 
the Company
 
is unable
 
to avoid
 
the payment,
 
and the
 
recovery of
 
such amount
 
through litigation
 
is
uncertain,
 
the
 
additional
 
accrual
 
of
 
$41.3
 
million
 
has
 
been
 
recognized
 
within
 
“Accrued
 
Expenses
 
and
 
Other
Current Liabilities”
 
in the
 
Consolidated Balance
 
Sheet as
 
at December
 
31, 2023,
 
and a
 
corresponding amount
recognized
 
under
 
“Selling,
 
general
 
and
 
administrative”
 
expense
 
in
 
the
 
Company’s
 
Consolidated
 
Statement
 
of
Operations and
 
Comprehensive Income.
 
The total
 
accrual of
 
$53.7 million
 
(A$79.0 million)
 
as at
 
31 December
2023
 
is
 
based
 
on
 
the
 
Company’s
 
estimate
 
of
 
the
 
outstanding
 
stamp
 
duty
 
payable,
 
the
 
additional
 
accrual
recognized, less partial payments to date of $17.6 million
 
(A$25.7 million).
 
We cannot guarantee that the steps we take to
 
defend our position on this matter will be successful.
In 2022, the Queensland State Government in Australia amended the
 
Mineral Resources Regulation 2013 (Qld)
introducing
 
additional
 
higher
 
tiers
 
to
 
the
 
coal
 
royalty
 
rates
 
effective
 
from
 
July
 
1,
 
2022,
 
increasing
 
the
 
royalty
payable by our Australian Operations.
 
The tiers currently applicable are as set out below:
 
7% for average coal price per Mt sold up to and including
 
A$ 100 per Mt;
 
12.5% for average coal price per Mt sold from A$100 to
 
A$150 per Mt;
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
60
 
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.
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
61
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.
 
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. Upon the
 
closing of the
 
SGI Transaction,
 
EMG Group will
 
no longer own
 
at least 10%
 
of our
voting stock and we will be
 
governed by Section 203 at that
 
time. See “—Following the consummation of the SGI
Transaction, we expect that Coronado Group LLC and SGI
 
will have significant influence over corporate matters,
including control over
 
certain decisions that
 
require the approval
 
of stockholders”.
 
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,
 
2023, 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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
62
Further, pursuant to
 
the terms of the Series A
 
Share, Coronado Group and the
 
EMG Group or its successors
 
or
permitted
 
assigns,
 
as
 
the
 
beneficial
 
owner
 
of
 
the
 
Series A
 
Share,
 
at
 
its
 
option,
 
will
 
have
 
the
 
ability
 
to
 
elect
 
a
specified number of directors, or the Series A Directors, based on
 
the EMG Group’s aggregate level of beneficial
ownership of shares
 
of our common
 
stock. For more
 
details on the
 
ability of Coronado
 
Group and the
 
EMG Group
to elect Series A Directors, as
 
well as the rights of
 
stockholders to participate in the removal of
 
any such Series
A
Directors,
 
see
 
Item 5.
 
“Market
 
for
 
Registrant’s
 
Common
 
Equity,
 
Related
 
Stockholder
 
Matters
 
and
 
Issuer
Purchases of Equity Securities.”
Moreover, the
 
EMG Group’s beneficial
 
ownership of shares of
 
our common stock may
 
also adversely affect
 
the
price of our
 
common stock
 
to the extent
 
equity investors
 
perceive disadvantages
 
in owning common
 
stock of a
company with a controlling stockholder.
 
In addition, the EMG Group
 
is in the business of making
 
investments in
companies and may, from time to time, acquire interests in businesses that
 
directly or indirectly compete with us,
as well as businesses of our existing or potential significant
 
customers. The EMG Group may acquire or seek
 
to
acquire assets that
 
we seek to
 
acquire and, as
 
a result, those
 
acquisition opportunities
 
may not be
 
available to
us or
 
may be
 
more expensive
 
for us
 
to pursue,
 
and as
 
a result,
 
the interests
 
of the
 
EMG Group
 
may not
 
align
with the interests of our other stockholders.
The EMG Group has the
 
right, subject to certain conditions, to
 
require us to cooperate in
 
a sale of shares
of our common stock held by it (including in the form
 
of CDIs) under the Securities Act.
Pursuant to the Registration
 
Rights and Sell-Down Agreement,
 
dated as of September 24,
 
2018, between us and
Coronado
 
Group LLC,
 
or
 
the
 
Registration
 
Rights
 
and
 
Sell-Down
 
Agreement,
 
Coronado
 
Group LLC
 
(or
 
its
successors
 
or
 
permitted
 
assigns
 
or
 
transferees)
 
has
 
the
 
right,
 
subject
 
to
 
certain
 
conditions,
 
to
 
require
 
us
 
to
cooperate in a
 
sell-down of
 
shares of
 
our common
 
stock or
 
CDIs held by
 
it. By virtue
 
of its majority
 
ownership,
exercising its registration rights and selling a large number of shares or CDIs, Coronado Group LLC could cause
undue volatility in the
 
prevailing market price of
 
our common stock. See
 
Item 5. “Market for Registrant’s Common
Equity, Related Stockholder
 
Matters and Issuer Purchases of Equity Securities.”
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,
 
2023
 
63
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.
 
We
 
may
 
need
 
to
 
hire
 
more
 
employees
 
in
 
the
 
future
 
or
 
engage
 
outside
consultants, which will increase our costs and expenses.
In addition, changing laws,
 
regulations, and standards relating to
 
corporate governance and public disclosure
 
are
creating
 
uncertainty
 
for
 
public
 
companies,
 
increasing
 
legal
 
and
 
financial
 
compliance
 
costs
 
and
 
making
 
some
activities more time consuming.
 
These laws, regulations
 
and standards are subject
 
to varying interpretations, in
many cases due to their
 
lack of specificity and,
 
as a result, their
 
application in practice may
 
evolve over time as
new
 
guidance
 
is
 
provided
 
by
 
regulatory
 
and
 
governing
 
bodies.
 
This
 
could
 
result
 
in
 
continuing
 
uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance
practices.
 
We
 
intend
 
to
 
invest
 
resources
 
to
 
comply
 
with
 
evolving
 
laws,
 
regulations
 
and
 
standards,
 
and
 
this
investment may result in increased
 
general and administrative expenses
 
and a diversion of management’s
 
time
and
 
attention
 
from
 
sales-generating
 
activities
 
to
 
compliance
 
activities.
 
If
 
our
 
efforts
 
to
 
comply
 
with
 
new
 
laws,
regulations and standards differ from the activities intended by
 
regulatory or governing bodies due to ambiguities
related
 
to
 
their
 
application
 
and
 
practice,
 
regulatory
 
authorities
 
may
 
initiate
 
legal,
 
administrative
 
or
 
other
proceedings against us and our business may be harmed.
A state
 
court located within
 
the State
 
of Delaware (or, if
 
no state court
 
located within the
 
State of
 
Delaware
has jurisdiction, the
 
federal district court
 
for the District
 
of Delaware) will
 
be, to the
 
extent permitted by
law,
 
the
 
sole
 
and
 
exclusive
 
forum
 
for
 
substantially
 
all
 
state
 
law
 
based
 
disputes
 
between
 
us
 
and
stockholders.
Our bylaws provide
 
that, unless we
 
consent in writing
 
to the selection
 
of an alternative
 
forum, a state
 
or federal
court within the State of Delaware will be the sole and
 
exclusive forum for:
 
any derivative action or proceeding brought on our behalf;
 
any action or proceeding asserting a claim of breach of
 
a fiduciary duty owed by any director or
 
officer or
other employee or
 
agent of the
 
Company to the
 
Company or the
 
Company’s stockholders or debtholders;
 
any
 
action
 
or
 
proceeding
 
asserting
 
a
 
claim
 
against
 
the
 
Company
 
or
 
any
 
director
 
or
 
officer
 
or
 
other
employee or
 
agent of
 
the Company
 
arising pursuant
 
to any
 
provision of
 
the DGCL
 
or our
 
certificate of
incorporation or bylaws; or
 
any action
 
asserting
 
a claim
 
against
 
the
 
Company
 
or
 
any
 
director
 
or
 
officer
 
or
 
other
 
employee
 
of
 
the
Company
 
governed
 
by
 
the
 
internal
 
affairs
 
doctrine
 
or
 
other
 
“internal
 
corporate
 
claims”
 
as
 
defined
 
in
Section 115 of the DGCL.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
64
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.
Other factors
 
that may
 
negatively affect
 
investor sentiment
 
and influence
 
us, specifically,
 
or the
 
stock market,
more generally, include acts
 
of terrorism, an outbreak of international hostilities, fires, floods, earthquakes,
 
labor
strikes, civil
 
wars, natural
 
disasters, outbreaks
 
of disease,
 
including a
 
global pandemic,
 
or other
 
man-made
 
or
natural events.
Stock markets have
 
experienced extreme price
 
and volume fluctuations
 
in the past
 
that are
 
often disproportionate
or
 
unrelated
 
to
 
the
 
operating
 
performance
 
of
 
companies.
 
There
 
can
 
be
 
no
 
guarantee
 
that
 
trading
 
prices
 
and
volumes of any securities
 
will be sustained. These
 
factors may materially affect the
 
market price of our
 
securities,
regardless of our
 
operational performance. This
 
may then significantly
 
impact our ability
 
to raise new
 
equity which
may be required to fund our operations if our financial
 
performance deteriorates due to other factors.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
65
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 Senior Secured Notes Indenture governing our Notes and covenants under the New 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,
 
2023
 
66
ITEM 1B. UNRESOLVED
 
STAFF COMMENTS
None.
 
ITEM 1C. CYBERSECURITY
Risk Management and Strategy:
Coronado
 
has
 
implemented
 
software
 
governance
 
tools
 
to
 
assess,
 
identify,
 
and
 
manage
 
material
 
risks
 
from
cybersecurity threats. Coronado heavily relies on information technology systems throughout its operations, and
acknowledges
 
the
 
critical
 
importance
 
of
 
safeguarding
 
its
 
digital
 
assets
 
and
 
protecting
 
sensitive
 
information.
Regular security assessments are conducted
 
to monitor technological implementations against
 
global standards.
Coronado
 
also
 
maintains
 
a
 
suite
 
of
 
security
 
measures
 
to
 
help
 
defend
 
against
 
unauthorized
 
access
 
and
misappropriation
 
of
 
technology.
 
Additionally,
 
the
 
Coronado
 
IT
 
department
 
distributes
 
training
 
and
 
awareness
information covering email security,
 
password security,
 
data handling security,
 
and cloud security.
Coronado’s cybersecurity
 
risk management
 
is integrated
 
into its Group
 
risk management
 
processes, which
 
are
governed
 
by
 
the
 
Group
 
Risk
 
Management
 
Framework
 
and
 
Risk
 
Management
 
Policy.
 
The
 
Risk
 
Management
Framework and Risk Management Policy outline:
 
Risk management responsibilities;
 
Risk assessment frequency;
 
Risk assessment criteria (likelihood and consequence);
 
The requirement to implement internal controls; and
 
The level within the organization risk assessments are
 
to be performed.
Certain key controls considered through Coronado’s
 
internal control processes are linked to cybersecurity
 
risks,
these include controls over access and change management for key financial
 
systems. Where the management
of
 
these
 
key
 
financial
 
systems
 
is
 
outsourced
 
to
 
third
 
parties,
 
Coronado
 
receives
 
assurance
 
reports
 
on
 
the
effectiveness
 
of
 
key
 
vendor
 
controls.
 
Additionally,
 
Coronado
 
uses
 
third
 
parties
 
to
 
conduct
 
cybersecurity
penetration testing at Coronado's US and Australian
 
operations. In 2023, Coronado created the
 
Digital Advisory
Committee (Committee), which is
 
chaired by the
 
Vice President of
 
Information Technology.
 
As part of
 
Coronado’s
processes to
 
oversee and
 
identify cybersecurity
 
threats associated
 
with its
 
use of
 
third-party service
 
providers,
the Committee
 
is tasked
 
with reviewing
 
new software
 
requests from
 
Coronado’s various divisions.
 
The Committee
is comprised
 
of
 
business
 
systems,
 
plant,
 
and
 
operational
 
personnel
 
from
 
both
 
Coronado’s
 
US
 
and
 
Australian
operations.
As of
 
the filing
 
of this
 
Annual Report
 
on Form
 
10-K, Coronado
 
is not
 
aware of
 
any cybersecurity
 
incidents that
have occurred
 
since the
 
beginning of
 
2023 that
 
have materially
 
affected,
 
or are
 
reasonably likely
 
to materially
affect, Coronado, including Coronado’s
 
business strategy,
 
results of operations or financial condition.
 
Coronado
could be subject to cybersecurity incidents in
 
the future which may have a material
 
adverse effect on Coronado’s
business strategy, results of operations or financial
 
condition. For further information on
 
Coronado’s risks relating
to cybersecurity threats, see “Operation and Technology
 
Risks” in “Risk Factors” on page 51
of this Form 10-K.
 
Governance:
The
 
Board
 
of
 
Directors
 
(Board)
 
is
 
responsible
 
for
 
reviewing,
 
ratifying,
 
and
 
monitoring
 
systems
 
of
 
risk
management,
 
internal
 
control,
 
and
 
legal
 
compliance.
 
This
 
includes
 
identifying
 
the
 
main
 
risks
 
associated
 
with
Coronado's
 
businesses,
 
including
 
cybersecurity
 
risk,
 
and
 
implementing
 
appropriate
 
systems
 
to
 
manage
 
such
risks. As outlined in the Audit Governance and Risk
 
Committee (AGRC) charter, the
 
Board has delegated to the
AGRC responsibility for
 
overseeing corporate and governance
 
risk management, financial risk
 
management, and
compliance with applicable laws,
 
regulations, standards, and best
 
practice guidelines. In 2024,
 
the AGRC charter
was amended
 
to confirm
 
that this
 
responsibility includes the
 
oversight of
 
cybersecurity risk. The
 
AGRC is
 
informed
of cybersecurity risks by management, which includes an annual cybersecurity
 
risk presentation. As part of their
review of reports
 
from management,
 
the AGRC reports
 
cybersecurity risk
 
updates to the
 
Board, which enables
the Board to incorporate the insights of such reports into its
 
overall risk oversight analysis.
Supporting
 
this
 
governance
 
framework,
 
the
 
Executive
 
Leadership
 
Team
 
(ELT)
 
is
 
responsible
 
for
 
maintaining
effective systems of risk management and internal control, as well as responding to cybersecurity incidents. The
Vice
 
President
 
of
 
Information
 
Technology
 
is
 
responsible
 
for
 
the
 
cybersecurity
 
function.
 
The
 
Vice
 
President
 
of
Information
 
Technology
 
has
 
experience
 
in
 
various
 
roles
 
involving
 
managing
 
information
 
systems
 
and
cybersecurity functions
 
and developing
 
cybersecurity strategies.
 
The Vice
 
President of
 
Information Technology
reports to the Group Chief Financial Officer (Group
 
CFO), who is a member of the ELT.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
67
In order to prevent, detect, mitigate and
 
remediate cybersecurity incidents, Coronado maintains a Cyber Incident
Response
 
Plan
 
(Plan).
 
The
 
Plan
 
outlines
 
Coronado's
 
approach
 
to
 
identifying
 
and
 
containing
 
cybersecurity
incidents, along with recovery
 
and improvement processes.
 
The Plan includes incident
 
assessment criteria that
allow for
 
escalation of
 
potentially material
 
cybersecurity
 
incidents. The
 
Group CFO
 
reports to
 
the AGRC
 
in the
event
 
of
 
a
 
potentially
 
material
 
cybersecurity
 
incident.
 
Additionally,
 
annual
 
reviews
 
of
 
Coronado’s
 
current
cybersecurity status are presented to the Board and the AGRC
 
by management.
c561202310Kp68i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
68
ITEM 2.
 
PROPERTIES
 
Summary Overview of Mining Operations
Coronado owns and controls
 
a portfolio of operating
 
mines and development projects
 
in Queensland, Australia,
and
 
Virginia,
 
West
 
Virginia
 
and
 
Pennsylvania
 
in
 
the
 
United
 
States.
 
Our
 
Australian
 
Operations
 
consist
 
of
 
the
100%-owned Curragh
 
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 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:
c561202310Kp69i0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
69
13.6
12.8
26.4
12.4
13
25.3
12.8
12.6
25.4
Australia
United States
Group
ROM production (Mt)
FY21
FY22
FY23
11.1
6.3
17.4
9.8
6.2
16.0
10.0
5.8
15.8
Australia
United States
Group
Saleable production (Mt)
FY21
FY22
FY23
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, 2023, 2022 and 2021.
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, 2023.
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
70
Table 1.
 
Summary of Coronado Properties
Property
(Property
Stage)
Mineral Rights
(1)
Permit
Status
(2)
Mine Type(s)
Coal Type
Coal Seams of
Economic
Interest
(Formation)
Processing
Plants/
Facilities
Curragh
(Production)
25,586 hectares
leased; 6,381
hectares owned
Permitted
Surface &
Underground
(4)
HCC, SCC,
PCI, Thermal
Various (Rangal
Coal Measures)
CPP1 - 1,100 raw
Mt per hour;
CPP2 - 1,200 raw
Mt per hour; Rail
Loadout
Buchanan
(Production)
25,853 hectares
leased
(3)
; 7,725
hectares owned
1 Permit
Underground
Low-Vol
Pocahontas #3
(Pocahontas
Formation)
CPP - 1,270 raw
Mt per hour; Rail
Loadout
Logan
(Production)
13,114 hectares
leased
(3)
; 69
hectares owned
27 Permits
Surface &
Underground
HVA, HVB,
Thermal
Various
(Kanawha
Formation)
CPP - 1,088 raw
Mt per hour; Rail
Loadout
Mon Valley
(Development)
1,339 hectares
leased
(3)
; 40,276
hectares owned
Not
Permitted
Underground
(4)
High-Vol
Upper Freeport
(Freeport
Formation)
Future
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,
 
2023
 
71
Table 2.
 
Summary Coal Resources Exclusive of Reserves at End
 
of the Fiscal Year Ended December 31,
2023.
(1)
Coal Resources (In Situ, MMt)
(2)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
Australia
Curragh Open Cut
167
81
247
54
22.9%
0.6%
19.1%
Curragh Underground
41
62
103
106
18.6%
0.4%
18.1%
Total
 
Australia
208
143
350
160
United States
Buchanan
31
4
35
16.0%
0.8%
18.0%
Logan
39
36
75
3
17.0%
1.0%
31.0%
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
129
58
187
3
Total
337
201
537
163
(1)
 
For more
 
information regarding price
 
assumptions used
 
in the
 
calculation of
 
coal resources
 
as of
 
December 31,
 
2023, 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, 2023.
(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 Open Cut
173
16
189
12.2%
0.5%
19.5%
Curragh Underground
25
9
34
10.0%
0.3%
16.9%
Total
 
Australia
198
25
223
United States
Buchanan
87
5
92
6.0%
0.7%
20.0%
Logan
55
16
71
8.0%
0.9%
35.0%
Mon Valley
78
57
134
8.0%
1.2%
(3)
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
248
85
333
Total
446
110
556
(1)
 
For more
 
information regarding
 
price assumptions
 
used in
 
the calculation
 
of coal
 
reserves as
 
of December
 
31, 2023,
 
see the
individual property disclosures below.
(2)
 
For more information regarding moisture assumptions used in the calculation of coal
 
reserves as of December 31, 2023, see the
individual property disclosures below.
(3)
 
Life-of-mine,
 
or
 
LOM,
 
sulfur
 
for
 
Pangburn
 
is
 
an
 
estimated
 
1.2%;
 
however,
 
overall
 
Mon
 
Valley
 
complex
 
reserve
 
average
 
is
1.4%sulfur.
(4)
 
Some numerical figures in the
 
above table have been subject
 
to rounding adjustments. Accordingly,
 
numerical figures shown as
totals may not equal the sum of the figures that
 
precede them.
 
 
c561202310Kp72i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
72
Curragh
Curragh is a
 
production-stage mining property that
 
consists of two
 
active, open cut,
 
surface mines (Curragh
 
North
and Curragh Main) and one proposed
 
underground mine (east of the Curragh
 
North open cut mine).
 
Coal mine
development at
 
the Curragh
 
property has
 
been historically
 
accomplished by
 
surface mining
 
methods since
 
the
mine’s inception in 1983.
 
Presently, coal mine development at the Curragh property
 
is accomplished by surface
mining
 
methods
 
and
 
by
 
an
 
underground
 
development
 
project,
 
which
 
is
 
undergoing
 
operational
 
readiness
 
in
preparation for
 
execution and
 
commencement of
 
underground coal
 
production in
 
late 2024.
 
Curragh coals
 
are
widely known for their low
 
ash, low to mid volatile
 
matter, low sulfur
 
and low phosphorous content.
 
Curragh Met
coal products are also known
 
for their consistent delivered
 
quality, which
 
supports a consistent offtake
 
across a
diversified market base.
 
A map of the Curragh tenements is shown in Figure 3.
Figure 3.
 
Coronado Curragh Mine Complex Property Location
 
Map.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
73
The Curragh mine
 
complex is
 
located within the
 
Bowen Basin coalfields,
 
approximately 200
 
kilometers by road
west of Rockhampton, Queensland, Australia,
 
and approximately 14 kilometers north of
 
the town of Blackwater,
Queensland, Australia. The
 
coordinates of CPP1,
 
which is located
 
within Curragh Main,
 
are 688,561 meters
 
East,
7,400,933 meters North
 
in the AMG66 grid
 
system. Curragh owns
 
and operates the
 
necessary CPPs and
 
load-
out system
 
for dispatches
 
via Blackwater
 
rail line
 
to the
 
Port of
 
Gladstone or
 
the Stanwell
 
Power Station.
 
See
Item 1. “Business—Transportation
 
—Australian Operations” for
 
additional information regarding
 
the rail and port
services available to Curragh.
 
Curragh also has maintenance
 
facilities for the fleet
 
of mining equipment, as
 
well
as office
 
buildings for
 
the mine
 
staff and
 
personnel.
 
Established sealed
 
roads connect
 
the mine
 
to the
 
town of
Emerald, Queensland,
 
Australia,
 
to the
 
west and
 
the
 
Port of
 
Gladstone
 
to the
 
east.
 
Third-party
 
rail providers
operate the Blackwater rail line and transport Curragh
 
export coal, for sale to international customers, to
 
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
 
CPPs.
 
There
 
is
adequate power
 
on site
 
for establishing
 
the underground
 
mine and
 
commencing the
 
first two
 
continuous miner
units;
 
however,
 
upgrades
 
to
 
the
 
site
 
infrastructure
 
are
 
required
 
for
 
full
 
underground
 
production
 
with
 
four
continuous miner units.
 
The 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 a 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 petroleum
 
tenements which
 
overlap with
 
the
Tenements.
 
The priority,
 
consent and
 
coordination requirements
 
under the
 
MRA, MERCPA
 
and the
 
Petroleum
and Gas
 
(Production and Safety)
 
Act 2004
 
(Qld) (as relevant)
 
may apply
 
with respect to
 
those overlaps. Extensive
statutory
 
protocols
 
govern
 
the
 
relationships
 
between
 
co-existing
 
mining
 
and
 
exploration
 
rights
 
and
 
these
protocols
 
are
 
largely
 
focused
 
on
 
encouraging
 
the
 
overlapping
 
tenement
 
holders
 
to
 
negotiate
 
and
 
formulate
arrangements
 
that
 
enable
 
the
 
co-existence
 
of
 
their
 
respective
 
interests.
 
To
 
date,
 
we
 
have
 
negotiated
arrangements in place with all of our overlapping
 
tenement holders and full access
 
to all of our Tenements.
 
See
Item 1. “Business—Regulatory Matters—Australia” for additional
 
information regarding Curragh’s Tenements.
 
Property control and mining rights at Curragh are entirely expressed in the MLs and MDLs mentioned above. An
overlapping petroleum tenure exists over the
 
southern and eastern extents of
 
the Tenements.
 
Under the 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 regulated tiered
 
structure introduced July
 
1, 2022. This tiered
 
royalty payment regime
 
is dependent on the
received AUD/t
 
revenue received
 
from the
 
coal sales,
 
and varies
 
from 7%
 
for up
 
to A$100/t
 
sales, up
 
to 40%
payable for
 
sales over
 
A$300/t. These
 
royalties are
 
in addition
 
to the
 
Stanwell rebate,
 
as described
 
in Item
 
1.
“Business—Customers—Stanwell.” Additionally, if MDL 162
 
advances from development
 
to production,
 
we would
be required to
 
pay under a
 
private royalty deed
 
a base royalty
 
of A$0.50 per
 
Mt of coal and
 
a royalty of
 
A$0.70
for every Mt of SCC produced above 2.5 MMt per year.
A joint venture between
 
Arco Australia Ltd., Australian Consolidated Industries
 
Ltd., R.W. Miller & Co.
 
and Mitsui
& Co. (Australia) first began development on certain
 
of the Tenements in 1983.
 
Later, Arco Australia Ltd. bought
out the
 
other joint
 
venturers
 
and, in
 
2000, sold
 
the Curragh
 
property to
 
Wesfarmers
 
Ltd. In
 
2014, Wesfarmers
acquired MDL 162 from Peabody Budjero Pty
 
Ltd.
 
Coronado acquired all the Tenements
 
from Wesfarmers Ltd.
in March 2018.
 
Production history has been approximately
 
11.1 MMt in
 
2021, 9.8 MMt in 2022 and 10.0 MMt
 
in
2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
74
Beginning
 
in the
 
1960’s,
 
various
 
tenement
 
holders
 
began prospecting
 
and exploratory
 
drilling
 
at Curragh.
 
We
currently
 
have
 
an
 
active,
 
ongoing
 
exploration
 
program
 
at
 
Curragh
 
that
 
allows
 
us
 
to
 
update
 
and
 
refine
 
the
geological
 
model
 
ahead
 
of
 
pit
 
development.
 
Recently,
 
we
 
have
 
increasingly
 
focused
 
on
 
an
 
underground
exploration program,
 
which has
 
included seismic
 
2-D
 
and 3-D
 
surveys and
 
core drilling
 
for gas,
 
geotech, coal
quality
 
and
 
spontaneous
 
combustion
 
evaluation.
 
Additional
 
exploration
 
has
 
included
 
permeability
 
and
hydrological assessments.
Open cut coal mine development
 
at the Curragh property is presently
 
accomplished by surface mining methods
and has been so historically
 
since the mine’s inception.
 
The mine characteristics and output
 
levels allow it to be
ranked as
 
a large
 
coal operation
 
when compared
 
to domestic
 
producers in
 
Australia and
 
worldwide.
 
Curragh
operates four large electric draglines, one large electric
 
shovel and additional fleets of hydraulic excavators.
 
Curragh has two coal preparation
 
plants, CPP1 and CPP2. CPP1
 
is the oldest of the two processing
 
plants and
has a documented
 
nameplate capacity of
 
1,100 raw tons
 
per hour, or tph
 
(as received).
 
CPP2 has a
 
documented
nameplate capacity of 1,200 tph (as received) with a capability of up to
 
1350 tph when processing selected feed
types.
 
Curragh has
 
a loadout
 
facility for
 
loading coal
 
onto railcars,
 
which is
 
connected to
 
the main
 
Blackwater
rail link.
 
Generally, the mining equipment and facilities at Curragh are in good operating condition.
 
We focus on the long-
term
 
potential
 
of
 
the
 
mine
 
complex
 
and
 
regularly
 
monitor
 
developments
 
in
 
the
 
mining
 
industry
 
for
 
technology
improvements and
 
new equipment
 
that could
 
help us
 
increase efficiency
 
and lower our
 
costs. Curragh’s
 
oldest
mining
 
equipment,
 
including
 
two
 
draglines,
 
began
 
operations
 
in
 
1983.
 
Prior
 
to
 
Coronado
 
taking
 
over
 
mining
operations,
 
Wesfarmers
 
Ltd.
 
made
 
improvements
 
to
 
the
 
processing
 
facilities
 
at
 
Curragh,
 
including
 
the
commissioning of the second CPP
 
in 2012 and replacing the raw
 
coal crushing system at Curragh
 
Main with an
updated circuit
 
in 2016.
 
Wesfarmers Ltd.
 
also started
 
a corrosion
 
and structural
 
repair program
 
over ten
 
years
ago that
 
has continued
 
since acquisition.
 
This program
 
helps ensure
 
that the
 
assets are
 
available well
 
into the
future. From time to time, we also
 
update and improve other equipment and facilities to maintain their usefulness
and optimize our competitiveness. As of December 31, 2023, the book value of Curragh and its associated plant
and equipment was $767.8 million.
Studies
 
for
 
determining
 
the
 
feasibility
 
of
 
underground
 
mining
 
of
 
the
 
Curragh
 
North
 
mine
 
east
 
of
 
the
 
existing
Curragh
 
North
 
open
 
cut
 
mine
 
has
 
been
 
undertaken
 
between
 
2020 to
 
2023, comprising
 
a
 
pre-feasibility
 
study
completed
 
in
 
the
 
first quarter
 
of 2023
 
and
 
a subsequent
 
more
 
detailed
 
feasibility
 
study
 
on the
 
South
 
planned
operations
 
area in
 
the Mammoth
 
Seam. The
 
selected
 
mining
 
method for
 
the underground
 
project is
 
bord and
pillar mining using
 
primary extraction
 
of panels
 
with roadway
 
widths of
 
6.5 meters,
 
reducing to
 
6 meters
 
where
the overburden thickness or
 
mining conditions require. The
 
project is currently in
 
the operational readiness phase
and preparation is currently underway
 
for execution and commencement
 
of underground coal production
 
in late
2024. The ROM
 
coal is planned
 
to be transported
 
on the existing
 
installed overland conveyor south
 
to the existing
CPPs for
 
processing. The
 
product coal
 
will be
 
handled through
 
the existing
 
product coal
 
stockpile system
 
and
train load out facility at Curragh.
 
Underground mine access is planned
 
via four portal entries from the
 
southern end of the final highwall
 
of one of
the open
 
cut pits
 
in Curragh,
 
called S-Pit.
 
Surface infrastructure
 
planned for
 
the underground
 
mine includes
 
a
ROM stockpile
 
pad, conveyor
 
and radial
 
stacker, Mine Industrial
 
Area and
 
workshop. This
 
is planned
 
to be
 
located
adjacent to the S-Pit
 
portal entries from the
 
open cut, with access
 
to the underground mine
 
via mobile vehicles.
The mine access methodology and
 
surface infrastructure arrangement is consistent with other
 
underground bord
and pillar mines operating from existing open cut mines
 
in Queensland.
The underground mine has been
 
planned with three mining areas: South, Central and
 
North. Planned production
transitions
 
from
 
South
 
to
 
Central
 
and
 
then
 
North
 
areas
 
as
 
reserves
 
deplete
 
and
 
geographical
 
expansion
 
is
required to maintain
 
the required LOM
 
production. The mine
 
is expected to
 
commence in the
 
South area in
 
the
Mammoth Seam in late 2024 with two continuous miner
 
units, then later introducing additional continuous miner
units, with full production
 
using four units by
 
2026. Production is planned
 
to commence in the
 
Mackenzie Seam
in 2034 and continue throughout the expected LOM of approximately
 
20 years for the underground mine.
 
We are
 
not aware of
 
any significant
 
encumbrances or
 
defects in title
 
with respect
 
to the Curragh
 
property.
 
We
believe
 
we
 
have
 
secured
 
all
 
applicable
 
environmental
 
licenses
 
and
 
permits
 
under
 
both
 
Queensland
 
and
Australian Commonwealth
 
legislation and
 
have all
 
permits and
 
licenses regarding
 
cultural heritage,
 
native title
and various
 
other social
 
issues. See
 
Item 1. “Business
 
—Regulatory Matters—Australia”
 
for a discussion
 
of the
permitting conditions applicable to Curragh.
Summaries of Curragh’s
 
coal resources
 
and reserves estimates as
 
of December 31, 2023
 
and 2022 are shown
in Tables
 
4 and 5, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
75
Table
 
4.
 
Curragh
 
 
Summary
 
of
 
Coal
 
Resources
 
Exclusive
 
of
 
Reserves
 
at
 
the
 
End
 
of
 
the
 
Fiscal
 
Year
Ended December 31, 2023 and 2022.
(1)
Coal Resources
(Wet Tons, In Situ, MMt)
(2)(3)
Quality (Air-Dried Basis)
Measured
Indicated
Measured
+
Indicated
Inferred
Ash
Sulfur
Volatile
Matter
December 31, 2023
Open Cut
167
81
247
54
22.9%
0.60%
19.1%
Underground
41
62
103
106
18.6%
0.40%
18.1%
Total
208
143
350
160
December 31, 2022
Open Cut
328
184
512
142
19.5%
0.50%
18.4%
Total
328
184
512
142
(1)
 
Curragh determines the resources exclusive of reserves below a 15:1
 
in-situ strip ratio as being suitable for
 
open pit mining, and
above 15:1 in-situ strip ratio being suitable for underground
 
mining with a minimum seam thickness of 1.8
 
meters.
(2)
 
There are resources suitable for open
 
cut mining outside of the declared
 
reserves.
 
The initial economic assessment
 
for resources
exclusive of
 
reserves as
 
of December
 
31, 2022,
 
and 2023
 
assumed revenue
 
pricing based
 
on an
 
assumed long-term
 
average
realized sales prices
 
of $143 per
 
Mt (FOB) and
 
$133 per Mt (FOB),
 
respectively, for the open cut
 
resources and $147
 
per Mt (FOB)
and $140 per Mt (FOB), respectively, for the underground
 
resources. This is explained further in
 
Section 11.5 of the Curragh TRS.
(3)
 
Table 1-1 of the Curragh TRS provides a summary of Curragh resource tons inclusive
 
of reserve tons as of December 31, 2023.
(4)
 
Reported on a 5.3% in-situ moisture basis.
 
(5)
 
Some numerical figures in the
 
above table have been subject
 
to rounding adjustments. Accordingly,
 
numerical figures shown as
totals may not equal the sum of the figures that
 
precede them.
Table
 
5.
 
Curragh –
 
Summary of
 
Coal Reserves
 
(Marketable
 
Sales Basis)
 
at the
 
End of
 
the Fiscal
 
Year
Ended December 31, 2023 and 2022.
(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, 2023
Open Cut
173
16
189
12.2%
0.5%
19.5%
Underground
25
9
34
10.0%
0.3%
16.9%
Total
198
25
223
December 31, 2022
Open Cut
188
18
205
10.7%
0.4%
19.0%
Total
188
18
205
(1)
 
Based on
 
long-term revenue
 
pricing assumption
 
data outlined
 
by Coronado
 
described in
 
Section 16
 
of the
 
Curragh TRS.
 
The
pricing data assumes an average
 
realized price of $141 per
 
Mt produced over the LOM
 
as of December 31, 2022
 
and $131 per Mt
sold over the LOM as of December 31, 2023.
(2)
 
The December 31,
 
2022 marketable reserves
 
are reported on
 
an 11.0%
 
moisture basis. For
 
the December 31,
 
2023 marketing
reserves, the
 
open cut
 
marketable reserves
 
are
 
reported on
 
a
 
9.5% product
 
moisture
 
basis and
 
the underground
 
marketable
reserves are reported on a 10% product moisture
 
basis.
(3)
 
Some numerical figures in the
 
above table have been subject
 
to rounding adjustments. Accordingly,
 
numerical figures shown as
totals may not equal the sum of the figures that
 
precede them.
From
 
December
 
31,
 
2022,
 
to
 
December
 
31,
 
2023,
 
measured
 
and
 
indicated
 
resources
 
decreased
 
by
approximately 32%, from
 
512 MMt
 
to 350 MMt.
 
This decrease in
 
measured and indicated
 
resources is attributable
to the conversion of resources
 
to reserves being declared in
 
2023 for the underground project.
 
From December
31, 2022, to December 31,
 
2023, total marketable coal
 
reserves increased by approximately 9%,
 
from 205 MMt
to approximately 223 MMt. This increase
 
in marketable coal reserves is attributable
 
mainly to the addition of the
Curragh North
 
underground project
 
reserves estimate.
 
A TRS
 
with respect
 
to Curragh,
 
updating the
 
TRS with
respect to Curragh
 
incorporated by reference
 
into Coronado’s
 
Annual Report on
 
Form 10-K for
 
the year ended
December 31,
 
2022, was
 
prepared in
 
February
 
2024 due
 
to material
 
differences
 
in the
 
key modifying
 
factors,
including the addition of
 
an underground LOM plan
 
and changes to coal
 
sales price assumptions, operating
 
costs
and capital costs, from December 31, 2022 to December
 
31, 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
76
Barry Lay,
 
BSc Geology (Hons);
 
MAusIMM of Resology
 
Pty Ltd, Daniel
 
Millers, B. Eng.;
 
MAusIMM(CP), who
 
is
employed full-time as the Superintendent Long Term
 
Planning of our subsidiary, Coronado Curragh Pty Ltd, and
Chris Wilkinson, BSc
 
(Mining); MAusIMM(CP);
 
Director Mining
 
Consultancy Services
 
(Australia) Pty Ltd,
 
whom
we
 
refer
 
to,
 
collectively,
 
as
 
the
 
Australian
 
QPs,
 
prepared
 
the
 
estimates
 
of
 
coal
 
resources
 
and
 
reserves
summarized in Tables
 
4 and 5.
 
A copy of the Australian QPs’ technical report summary,
 
or TRS, with respect to
Curragh, dated February
 
16, 2024,
 
or the Curragh
 
TRS, is filed
 
as Exhibit 96.1
 
hereto. None of
 
Mr. Barry
 
Lay,
Resology
 
Pty
 
Ltd,
 
Mr.
 
Chris
 
Wilkinson
 
or
 
Mining
 
Consultancy
 
Services
 
(Australia)
 
Pty
 
Ltd
 
are
 
affiliated
 
with
Coronado.
 
The Australian QPs prepared the estimates of Curragh
 
coal resources and reserves using drilling data available
from exploration
 
activities at
 
Curragh conducted
 
by numerous
 
entities over
 
time.
 
Most of
 
this information
 
was
obtained prior to our
 
acquisition of Curragh,
 
using varying drilling and
 
core-logging techniques, survey
 
methods
and testing procedures.
 
As a
 
result, in verifying
 
the data,
 
the Australian
 
QPs made
 
certain assumptions
 
about
the adequacy of the
 
processes performed and
 
comparability of the data
 
based on their professional
 
experience
and familiarity with Curragh.
Per
 
Section
 
12.1
 
of
 
the
 
Curragh
 
TRS,
 
coal
 
reserve
 
estimates
 
were
 
classified
 
as
 
proven
 
or
 
probable,
 
with
consideration given to
 
“modifying factors,”
 
including mining, processing,
 
metallurgical, infrastructure,
 
economic,
marketing, legal,
 
environmental, social
 
and governmental
 
factors. Section
 
22.2 of
 
the Curragh
 
TRS includes
 
a
risk
 
assessment
 
of
 
the
 
key
 
modifying
 
factors
 
that
 
could
 
potentially
 
impact
 
the
 
operations
 
and
 
therefore
 
the
estimate of coal reserves and resources.
 
As
 
summarized
 
in
 
Section
 
7.1
 
of
 
the
 
Curragh
 
TRS,
 
the
 
concentration
 
of
 
exploration
 
drill
 
holes
 
varies
 
slightly
across the Curragh
 
property.
 
The location of
 
the drilling
 
is shown on
 
the maps
 
included in Section
 
7.
 
Points of
observation include
 
exploration drill
 
holes, degas
 
holes and
 
mine measurements,
 
which have
 
been fully
 
vetted
and
 
processed
 
into
 
a
 
geological
 
model.
 
The
 
geological
 
model
 
is
 
based
 
on
 
seam
 
depositional
 
modelling,
 
the
interrelationship
 
of
 
overlying
 
and
 
underlying
 
strata
 
on
 
seam
 
mineability,
 
seam
 
thickness
 
trends, the
 
impact
 
of
seam structure (i.e., faulting), intra-seam
 
characteristics, etc.
 
Section 11.6
 
of the Curragh TRS summarizes
 
the
drill hole spacings and accuracy associated with each
 
resource category.
Coal quality is instrumental
 
in determining whether there
 
are reasonable prospects
 
for economic extraction of
 
a
coal resource
 
and
 
the economic
 
viability
 
of a
 
coal
 
reserve.
 
These quality
 
attributes
 
aided
 
in converting
 
in-situ
resource tons to
 
demonstrated coal
 
reserves (recoverable washed
 
tons). The reserve
 
and resource criteria
 
are
presented in
 
Sections 12.1
 
and 11.3,
 
respectively,
 
of the Curragh
 
TRS, including
 
assumptions related
 
to seam
density, minimum
 
cut-off thickness, and recoveries.
 
Pricing data as provided
 
by Coronado is described in
 
Table
16.2 of the Curragh TRS.
 
These are weighted-average realized values across
 
the LOM schedule.
Regarding
 
production
 
rates
 
as
 
described
 
in
 
Section
 
13
 
of
 
the
 
Curragh
 
TRS,
 
the
 
mine
 
plan
 
and
 
productivity
expectations
 
consider
 
historical
 
performance
 
and
 
efforts
 
have
 
been made
 
to
 
adjust
 
the plan
 
to
 
reflect
 
current
technology and future
 
conditions. Additional mine-specific factors
 
can be found
 
in Section 13
 
of the Curragh
 
TRS.
 
Buchanan
Buchanan
 
is
 
a
 
production-stage
 
mining
 
property,
 
consisting
 
of
 
one
 
active
 
underground
 
mine
 
and
 
supporting
infrastructure that
 
produces Low-Vol
 
Met coal using
 
the longwall
 
mining method.
 
The mine complex
 
is located
in Buchanan County in southwest Virginia.
 
A map of Buchanan is shown in Figure 4.
c561202310Kp77i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
77
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 33,578 total hectares, of which 25,853 are leased or
subleased from private landholders under approximately 150 individual coal lease tracts, and
 
7,725 hectares are
owned by Coronado.
 
Subject to Coronado’s exercising
 
its renewal rights thereunder,
 
all the leases expire upon
exhaustion of the relevant coal reserves, which is expected
 
to occur in 2042.
 
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 4.4
 
MMt in 2021, 3.9 MMt
 
in 2022 and
3.6 MMt in 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
78
Our right
 
to commercially
 
mine and
 
recover coal
 
reserves at
 
Buchanan overlaps
 
with the
 
right of
 
an affiliate
 
of
CNX Resources Corporation, which we refer to as the Gas Party,
 
to commercially recover and develop coal gas
interests
 
from
 
the
 
mine
 
area.
 
The
 
Gas
 
Party
 
and
 
we
 
have
 
entered
 
into
 
certain
 
agreements
 
to
 
regulate
 
the
interaction between, and coordinate, our
 
respective operations.
 
In general, the combination of
 
these overlapping
interests allows
 
for mutual
 
benefits to
 
the parties,
 
namely,
 
the degassing
 
of our
 
coal mining
 
operations
 
in
 
the
mine, which helps assure the safety of mine
 
personnel, and the Gas Party’s
 
commercial capture and sale of the
coal gas.
 
In addition, the Gas Party’s drilling activities have contributed to exploration efforts with respect to coal
deposits at Buchanan.
 
As the only natural gas supplier in
 
the area, we purchase our requirements of
 
natural gas
for the operation of our thermal dryer at Buchanan from
 
the Gas Party.
 
Before
 
Coronado
 
took
 
over
 
mining
 
operations
 
at
 
Buchanan,
 
CONSOL
 
Energy
 
had
 
conducted
 
extensive
exploration of the property.
 
We have continued
 
exploration at the property
 
through a program of
 
core drilling to
confirm reserves, establish additional resources
 
and assess the geotechnical viability of mining.
 
Buchanan
 
produces
 
primarily
 
a
 
Low-Vol
 
HCC,
 
but
 
it
 
also
 
produces
 
a
 
premium
 
Low-Vol
 
PCI
 
product.
 
The
Buchanan mine
 
extracts coal
 
from the
 
Pocahontas #3
 
seam of
 
the Pennsylvanian-age
 
Pocahontas Formation,
which is the principal minable coal seam
 
of that formation.
 
The seam is situated below drainage
 
throughout the
Property and is accessed by vertical shafts.
 
The seam thickness averages 1.57 meters within the mining
 
area.
 
The Buchanan
 
mine currently
 
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, 2023, the book value of Buchanan and its
 
associated plant and equipment was $464.7 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,
 
2023
 
79
Summaries of Buchanan’s coal resources and reserves as of December 31,
 
2023 and 2022 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, 2023 and 2022.
(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, 2023
31
4
35
16.0%
0.8%
18.0%
December 31, 2022
34
6
40
25.0%
0.7%
16.0%
(1)
 
Pricing for
 
resources is
 
described in
 
Section 11.3.1
 
of the
 
Buchanan TRS
 
(as defined
 
below).
 
Based on
 
assumed long-term
average price of $110 per Mt (FOB loadout) for Buchanan
 
resources as of December 31,
 
2022 and $143 per Mt (FOB
 
loadout) for
resources at
 
December 31,
 
2023, 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, 2023.
(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, 2023 and 2022.
(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, 2023
87
5
92
6.0%
0.7%
20.0%
December 31, 2022
88
5
93
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, 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.
 
For Buchanan reserves as of December 31, 2023, the pricing data assumes
a weighted average domestic
 
and international FOB-mine
 
price of approximately
 
$172 per Mt for
 
calendar year 2024;
 
the weighted
average price decreases to approximately $138 to $145 per Mt through year 2028 and averages approximately $173 per Mt over
the LOM.
(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,
 
2022
 
to
 
December
 
31,
 
2023,
 
total
 
reserves
 
decreased
 
approximately
 
1%,
 
from
approximately
 
93.0
 
MMt
 
to
 
approximately
 
92.0
 
MMt.
 
This
 
net
 
reduction
 
of
 
1.0
 
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, 2022, was
 
prepared in February
 
2024 due to
 
material differences
 
in the
key financial modifying factors, including mining plans, coal sales price assumptions, operating costs and capital
costs from December 31,
 
2022 to December 31,
 
2023. Mining plans
 
are discussed in Section
 
13 of the Buchanan
TRS. Coal sales price assumptions underlying the reserve estimates are discussed in Sections
 
12 and 16 of the
Buchanan
 
TRS,
 
while
 
operating
 
costs
 
and
 
capital
 
costs
 
assumptions
 
underlying
 
the
 
reserve
 
estimates
 
are
discussed in Sections 18 and 19
 
of the Buchanan TRS.
 
The differences in the key financial modifying factors
 
did
not have
 
a material
 
impact
 
on the
 
reserve
 
estimates
 
from
 
December
 
31,
 
2022 to
 
December
 
31,
 
2023.
 
From
December 31,
 
2022 to
 
December 31, 2023,
 
measured and
 
indicated resources decreased
 
by approximately 13%,
due to conversion of a
 
portion of the resources
 
to reserves.
 
Updated financial inputs, including
 
coal sales price
assumptions and
 
operating and
 
capital costs
 
used in
 
estimating the
 
resources exclusive of
 
reserves, as
 
discussed
in Section
 
11.3
 
of the Buchanan
 
TRS, did
 
not have
 
a material
 
impact on the
 
measured and
 
indicated resource
estimates
 
as
 
of
 
December
 
31,
 
2023,
 
as
 
compared
 
to
 
the
 
measured
 
and
 
indicated
 
resource
 
estimates
 
as
 
of
December 31, 2022.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
80
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, 2023
 
summarized in Tables
 
6
and 7.
 
A copy of the U.S. QPs’ TRS with respect to Buchanan, dated as of February 16, 2024, or the Buchanan
TRS, is filed as Exhibit 96.2 hereto. The U.S. QPs are
 
not affiliated with Coronado.
The
 
U.S.
 
QPs
 
prepared
 
the
 
estimates
 
of
 
coal
 
resources
 
and
 
reserves
 
using
 
core
 
drilling
 
data
 
available
 
from
exploration
 
activities
 
at
 
Buchanan
 
conducted
 
by
 
numerous
 
entities
 
over
 
time.
 
Most
 
of
 
this
 
information
 
was
obtained
 
prior
 
to
 
our
 
acquisition
 
of
 
the
 
property,
 
using
 
varying
 
drilling
 
and
 
core-logging
 
techniques,
 
survey
methods and testing
 
procedures.
 
As a result,
 
in verifying the
 
data, the U.S.
 
QPs made certain
 
assumptions about
the adequacy of the
 
processes performed and
 
comparability of the data
 
based on their professional
 
experience
and familiarity with Buchanan.
 
Per
 
Section
 
12.1
 
of
 
the
 
Buchanan
 
TRS,
 
coal
 
reserves
 
were
 
classified
 
as
 
proven
 
or
 
probable
 
considering
“modifying
 
factors,”
 
including
 
mining,
 
metallurgical,
 
economic,
 
marketing,
 
legal,
 
environmental,
 
social
 
and
governmental factors.
 
Section 22.2
 
of the
 
Buchanan TRS includes
 
a risk
 
assessment of the
 
key modifying factors
that could potentially impact the operations and therefore the
 
estimate of coal reserves and resources.
 
As summarized in Section 7.1 in
 
the Buchanan TRS, the U.S. QPs utilized 15,725
 
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
and supporting
 
infrastructure that
 
produce High-Volatile
 
Met coal
 
using the
 
room and
 
pillar mining
 
method and
two
 
active
 
surface
 
mines
 
(Toney
 
Fork
 
and
 
Elklick)
 
and
 
supporting
 
infrastructure
 
that
 
produce
 
both
 
Met
 
and
thermal coal using
 
the contour
 
and highwall
 
mining methods.
 
Underground mine
 
operations were
 
active during
2023 at
 
the
 
Lower
 
War
 
Eagle,
 
Eagle
 
No.
 
1
 
and
 
Muddy
 
Bridge
 
Mines
 
with
 
three,
 
three
 
and
 
two
 
active
 
mining
sections, respectively.
 
The North Fork Winifrede Mine was active but was fully depleted in 2023.
 
The Powellton
No. 1
 
Mine
 
was
 
in
 
the
 
process
 
of being
 
rehabilitated
 
and had
 
minimal
 
production
 
during the
 
fourth
 
quarter
 
of
2023, with plans to initiate
 
full production with one mining
 
section in the first quarter
 
of 2024.
 
The Logan complex
life plan includes
 
13 proposed mines,
 
consisting of ten
 
underground mines and
 
three surface mines.
 
The property
is located in Boone,
 
Logan and Wyoming
 
Counties in southern
 
West Virginia.
 
The surface facilities
 
are located
in Logan County,
 
West Virginia.
 
A map of Logan is shown in Figure 5.
c561202310Kp81i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
81
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
 
2057.
 
One lease
expires in 2032; however,
 
Coronado is projected to have previously exhausted th
 
e
 
reserves covered thereby.
Under the terms of the leases, we are required to pay royalties ranging from 3.0% to 9.0%
 
of revenue from sales
of coal
 
produced depending
 
on mining
 
method. Certain
 
of the
 
leases also
 
provide for
 
“wheelage fees”
 
ranging
from 0.25% to 1.0%
 
of revenue from
 
sales of coal
 
mined and removed
 
from properties other
 
than the particular
leasehold and hauled across the leasehold premises.
The mining of
 
Logan was commenced in
 
1945 by Lorado
 
Mining Company, or Lorado. Lorado was
 
sold to Buffalo
Mining Company
 
in 1964
 
and then
 
to Pittston
 
Coal Company
 
in 1971.
 
Pittston operated
 
the property
 
until the
early 1990’s.
 
After being idle for
 
a period, the property
 
was then sold to
 
Addington Resources in
 
2004.
 
Imagin
Natural
 
Resources
 
acquired
 
the
 
property
 
in
 
2007
 
and
 
sold
 
it
 
to
 
Cliffs
 
Natural
 
Resources Inc.
 
(now
 
known
 
as
Cleveland-Cliffs Inc.) in 2011,
 
which in turn sold
 
the property to Coronado
 
in 2014. Production history
 
has been
approximately 1.9 MMt in 2021, 2.1 MMt in 2022 and 2.5 MMt
 
in 2023.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
82
Before
 
Coronado
 
acquired
 
Logan,
 
previous
 
owners
 
had
 
conducted
 
extensive
 
exploration
 
on
 
the
 
property.
Coronado
 
has
 
continued
 
exploration
 
at
 
the
 
property
 
through
 
a
 
program
 
of
 
core
 
drilling
 
to
 
confirm
 
reserves,
establish additional resources and assess the geotechnical
 
viability of mining.
 
Logan
 
produces
 
primarily
 
High-Vol
 
Met
 
coal
 
(HVA
 
HCC
 
and
 
HVB
 
HCC),
 
mined
 
from
 
various
 
seams
 
of
 
the
Kanawha Formation. A few of the seams lie below drainage;
 
however, a substantial number of metallurgical coal
seams
 
are
 
situated
 
above
 
drainage.
 
Logan
 
also
 
produces
 
thermal
 
coal
 
from
 
upper
 
portions
 
of
 
the
 
Kanawha
Formation.
As of December
 
31, 2023, underground
 
mine operations
 
were active at
 
the Lower
 
War Eagle,
 
Eagle No. 1
 
and
Muddy
 
Bridge
 
Mines
 
with
 
three,
 
three
 
and
 
two
 
active
 
mining
 
sections,
 
respectively,
 
using
 
the
 
room-and-pillar
method.
 
The North Fork
 
Winifrede Mine was
 
fully depleted in
 
2023.
 
The Powellton No.
 
1 Mine was in
 
process
of
 
being
 
rehabilitated
 
and
 
had
 
minimal
 
production
 
during
 
the
 
fourth
 
quarter
 
of
 
2023,
 
with
 
plans
 
to
 
initiate
 
full
production with one mining section in the first quarter of
 
2024.
All sections of the active underground mines at Logan are configured as
 
full super sections, with two continuous
miners per
 
section.
 
Each section
 
also has
 
two roof
 
bolters, four
 
shuttle cars
 
and two
 
scoops.
 
From the
 
continuous
miner at the production face, the shuttle cars haul extracted coal to a feeder breaker, which transfers raw coal to
a conveyor
 
belt for
 
transport
 
to a
 
surface stockpile
 
holding area.
 
A shared
 
overland conveyor
 
carries raw
 
coal
from the 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
 
and
 
Elklick
 
surface
 
mines
 
extract
 
Met
 
and
 
thermal
 
coal
 
using
 
the
 
contour
 
and
 
area
 
mining
methods.
 
The
 
mines
 
use
 
spreads
 
of
 
front-end
 
loaders,
 
large
 
tractors/dozers
 
and
 
rock
 
trucks
 
to
 
remove
overburden and expose the coal. We
 
will deploy highwall mining when
 
overburden volumes exceed economical
stripping ratios associated with area and
 
contour mining. Trucks haul raw coal from Toney Fork and Elklick to the
CPP site for cleaning or to the loading site to be shipped
 
directly to customers.
Our
 
current
 
plans
 
at
 
Logan
 
contemplate
 
13
 
proposed
 
mines,
 
consisting
 
of
 
ten
 
underground
 
mines
 
and
 
three
surface mines,
 
including the
 
six mines
 
currently in
 
operation.
 
The proposed
 
underground mines
 
would extract
coal using
 
the room
 
and pillar
 
mining method,
 
and the
 
proposed surface
 
mines would
 
extract coal
 
using area,
contour or highwall mining methods, or some combination thereof.
 
Generally,
 
the mining equipment
 
and facilities at Logan
 
are in good operating
 
condition.
 
We focus on the
 
long-
term
 
potential
 
of
 
the
 
mine
 
complex
 
and
 
regularly
 
monitor
 
developments
 
in
 
the
 
mining
 
industry
 
for
 
technology
improvements
 
and
 
new
 
equipment
 
that
 
could
 
help
 
us increase
 
efficiency
 
and
 
lower
 
our costs.
 
Logan’s
 
oldest
mining
 
equipment
 
and
 
facilities,
 
including
 
the
 
CPP
 
and
 
loadout
 
facility,
 
began
 
operations
 
in
 
2008,
 
when
 
the
Powellton
 
No.
 
1
 
mine
 
started
 
production.
 
Since
 
acquiring
 
the
 
Logan
 
operations,
 
we
 
have
 
implemented
improvements
 
at the
 
CPP,
 
which have
 
resulted in
 
increased capacity.
 
From time
 
to time,
 
we also
 
update and
improve
 
other
 
equipment
 
and
 
facilities
 
to
 
maintain
 
their
 
usefulness
 
and
 
optimize
 
our
 
competitiveness.
 
As
 
of
December 31, 2023, the book value of Logan and its associated
 
plant and equipment was $244.1 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
 
27 state
permits with associated NPDES permits.
 
Logan is subject to a federal black lung excise tax of $1.21 per ton for underground mining and $0.61 per ton for
surface and highwall mining; however, this
 
tax applies only with respect to coal sold domestically.
 
Logan is also
subject to a
 
federal reclamation
 
fee of $0.13
 
per ton
 
for underground
 
mining and
 
$0.31 per ton
 
for surface
 
and
highwall mining.
 
Additionally,
 
Logan is subject to
 
a West Virginia
 
reclamation tax of
 
$0.308 per ton and
 
a West
Virginia severance
 
tax of
 
1.0% to
 
5.0% of
 
revenues for
 
all coal
 
produced. See
 
Item 1.
 
“Business—Regulatory
Matters—United States” for a discussion of the permitting
 
conditions applicable to Logan.
 
Summaries of Logan’s
 
coal resources and
 
reserves as of
 
December 31, 2023
 
and 2022 are
 
shown in Tables
 
8
and 9, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
83
Table 8.
 
Logan – Summary of Coal Resources Exclusive
 
of Reserves at the End of the
 
Fiscal Year Ended
December 31, 2023 and 2022.
(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, 2023
39
36
75
3
17.0%
1.0%
31.0%
December 31, 2022
45
37
82
3
24.0%
1.0%
28.0%
(1)
 
Pricing for resources is described in Section
 
11.3.1 of the
 
Logan TRS (as defined below).
 
For Logan resources as of December
31,
 
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.
 
For Logan resources
as of December
 
31, 2023, based on
 
assumed long-term average price
 
of $154 per
 
Mt (FOB loadout)
 
for underground-mineable
resources, representing the long-term average
 
price forecast for HVB provided by
 
Coronado; surface resources were assessed
 
at
a sales price of $83 per Mt (FOB loadout)
 
based on estimated historical pricing for Coronado’s surface
 
operations.
(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, 2023.
(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, 2023 and 2022.
(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, 2023
55
16
71
8.0%
0.9%
35.0%
December 31, 2022
53
17
71
8.0%
0.9%
36.0%
(1)
 
Pricing data as
 
provided by Coronado is
 
described in Section
 
16.2 of the
 
Logan TRS.
 
For Logan reserves
 
as of December
 
31,
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. For Logan reserves as of
December 31, 2023, the pricing data assumes respective HVA,
 
HVB and thermal FOB-mine prices of approximately $162, $144,
and $120 per Mt for calendar year 2024.
 
HVA, HVB, and thermal prices respectively decrease to approximately $161, $143, and
$114 per Mt through year 2026, and then increase to $308, $273, and
 
$212 per Mt through year 2057.
(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, 2022
 
to December
 
31, 2023,
 
total reserves
 
remain unchanged.
 
This consistent
 
number of
total
 
reserves
 
was
 
attributable
 
to
 
a
 
combination
 
of
 
updates
 
to
 
the
 
mine
 
plans,
 
including
 
conversion
 
of
 
select
resources to reserves, along with
 
one year of mining depletion.
 
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, 2022,
was prepared
 
in February
 
2024 due to
 
material differences
 
in the key
 
financial modifying
 
factors including
 
coal
sales price
 
assumptions,
 
operating
 
costs
 
and
 
capital
 
costs
 
from
 
December
 
31,
 
2022, to
 
December
 
31,
 
2023.
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, 2023, as compared
 
to the reserve estimates as of
December
 
31,
 
2022.
 
From
 
December
 
31,
 
2022,
 
to
 
December
 
31,
 
2023,
 
measured
 
and
 
indicated
 
resources
decreased
 
by
 
approximately
 
8.5%,
 
from
 
approximately
 
82
 
MMt
 
to
 
75
 
MMt.
 
This
 
net
 
reduction
 
of
 
7
 
MMt
 
of
measured and indicated
 
mineral resources was
 
attributable to one
 
year of mining
 
depletion along with changes
to the mine
 
plan. Updated financial inputs,
 
including coal sales price
 
assumptions and operating and
 
capital costs
used
 
in
 
estimating
 
the
 
resources
 
exclusive
 
of
 
reserves,
 
including
 
conversion
 
of
 
resources
 
to
 
reserves,
 
as
discussed
 
in
 
Section
 
11.3
 
of
 
the
 
Logan
 
TRS,
 
did
 
not
 
have
 
a
 
material
 
impact
 
on
 
the
 
measured
 
and
 
indicated
resource estimates
 
as of December
 
31, 2023, as
 
compared to the
 
measured and
 
indicated resource
 
estimates
as of December 31, 2022.
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, 2023
 
summarized in Tables
 
8
and 9.
 
A copy of the U.S. QPs’ TRS with respect to Logan, dated as of February 16, 2024, or the Logan TRS, is
filed as Exhibit 96.3 hereto. The U.S. QPs are not affiliated
 
with Coronado.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
84
The
 
U.S.
 
QPs
 
prepared
 
the
 
estimates
 
of
 
coal
 
resources
 
and
 
reserves
 
using
 
core
 
drilling
 
data
 
available
 
from
exploration activities at Logan conducted by numerous
 
entities over time.
 
Most of this information was obtained
prior to
 
our acquisition
 
of the prop
 
erty,
 
using varying
 
drilling and
 
core-logging techniques,
 
survey methods
 
and
testing procedures.
 
As a
 
result, in
 
verifying the data,
 
the U.S.
 
QPs made
 
certain assumptions about
 
the adequacy
of the processes performed and comparability
 
of the data based on their
 
professional experience and familiarity
with Logan. Per Section 12.1 of the Logan TRS, coal reserves were
 
classified as proven or probable considering
“modifying
 
factors,”
 
including
 
mining,
 
metallurgical,
 
economic,
 
marketing,
 
legal,
 
environmental,
 
social
 
and
governmental factors.
 
Section 22.2
 
of the Logan
 
TRS includes
 
a risk
 
assessment of
 
the key
 
modifying factors
that could potentially impact the operations and therefore the
 
estimate of coal reserves and resources.
 
As summarized in Section 7.1 in the Logan TRS, the U.S. QPs utilized 1,133 available core, rotary, and gas well
drilling on and around
 
the Logan property. Mine data from active
 
underground mines was supplied to
 
supplement
the exploration
 
drillhole records,
 
by seam.
 
Points of
 
observation
 
include exploration
 
drill holes,
 
gas wells,
 
and
mine measurements, which have been fully vetted
 
and processed into a geologic model.
 
The geologic model is
based
 
on
 
seam
 
depositional
 
modeling,
 
the
 
interrelationship
 
of
 
overlying
 
and
 
underlying
 
strata
 
on
 
seam
mineability,
 
seam thickness
 
trends, the
 
impact of
 
seam structure
 
(i.e., faulting),
 
intra-seam characteristics,
 
etc.
 
The U.S.
 
QPs completed
 
a geostatistical
 
analysis on
 
drill holes
 
within the
 
reserve boundaries
 
to determine
 
the
applicability
 
of
 
the
 
common
 
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 of 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
 
cut-off
 
thickness,
 
and
recoveries.
 
Pricing data as provided by Coronado is described
 
in Section 16.2 of the Logan TRS.
 
Regarding production
 
rates as
 
described in
 
Section 13.2
 
of the
 
Logan TRS,
 
the projected
 
underground mines
are set up similarly to the
 
four active underground operations as of December 31,
 
2023.
 
Each mine is scheduled
to operate one
 
to three production
 
sections.
 
All sections are
 
configured as full
 
super sections with
 
two continuous
miners per section.
 
Three surface resource areas
 
were modeled.
 
Mining operations are projected
 
to utilize area,
as well as contour,
 
mining methods.
 
The three areas
 
planned for highwall
 
mining are assumed
 
to be mined
 
by
a
 
contractor;
 
therefore,
 
the
 
contractor
 
costs
 
included
 
in
 
the
 
financial
 
model
 
assume
 
that
 
the
 
contractor
 
is
responsible for staffing
 
those operations along
 
with providing necessary equipment
 
capital. Spoil for
 
final highwall
reclamation is expected
 
to come from
 
strategic placement
 
of spoil on
 
pre-existing benches
 
by haul trucks
 
such
that they
 
are within
 
the push
 
distance of
 
the reclamation
 
dozer.
 
Additional information
 
regarding mine-specific
production factors can be found in Section 13.4 of the
 
Logan TRS.
 
Mon Valley
The Mon Valley mine
 
complex comprises three
 
development-stage mining properties, namely, Pangburn, Shaner
and Fallowfield,
 
each consisting
 
of a
 
proposed underground
 
mine that
 
would produce
 
High-Vol
 
Met coal
 
using
the room
 
and
 
pillar
 
mining
 
method.
 
The
 
preliminary
 
design
 
for
 
the
 
properties
 
also
 
includes
 
plans
 
for
 
surface
facilities
 
and
 
a
 
preparation
 
plant
 
for
 
each
 
mine.
 
The
 
properties
 
reside
 
in
 
Allegheny,
 
Washington
 
and
Westmoreland Counties in southwestern Pennsylvania.
 
The proposed facilities include
 
a barge loading
 
dock and
CSX rail loadout
 
on the Monongahela
 
River in Allegheny County, Pennsylvania, which
 
would ship clean
 
coal from
all three mines to end customers.
 
A map of Mon Valley
 
is shown in Figure 6.
c561202310Kp85i0
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
85
Figure 6.
 
Coronado Mon Valley
 
Mine Complex Property Location Map.
Mon Valley is located
 
approximately 22.5 kilometers
 
southeast of
 
Pittsburgh, Pennsylvania, near
 
the communities
of Bentleyville,
 
Lockview,
 
Monongahela, Elizabeth,
 
Sutersville and
 
Irwin, Pennsylvania.
 
The coordinates
 
of the
proposed infrastructure are latitude 40° 15' 24" and longitude 79° 53' 50" (Easting
 
1,398,821’, Northing 343,480’
– in the PA State
 
Plane South NAD 27 grid system). From U.S. Interstate 70
 
and Pennsylvania Route 51, which
traverse
 
the
 
Fallowfield
 
and
 
Pangburn
 
areas,
 
respectively,
 
a
 
well-developed
 
network
 
of
 
improved
 
and
unimproved roads allows general access to the
 
property.
 
The Monongahela and Youghiogheny
 
Rivers also run
through the property.
 
The primary means of transport for produced coal would be by barge
 
on the Monongahela
River/Ohio River system.
 
Additionally,
 
a CSX rail line located
 
along the banks of the
 
Monongahela River would
provide another option for the shipment of coal.
Mon
 
Valley
 
has
 
sources
 
of
 
water,
 
power,
 
and
 
supplies
 
readily
 
available
 
for
 
use.
 
Personnel
 
in
 
the
 
area
 
have
historically
 
been
 
sourced
 
from
 
the
 
surrounding
 
communities
 
in
 
Allegheny,
 
Washington,
 
and
 
Westmoreland
Counties,
 
and
 
have
 
proven
 
to
 
be
 
adequate
 
in
 
numbers
 
to
 
operate
 
the
 
mines.
 
As
 
mining
 
is
 
common
 
in
 
the
surrounding areas, the
 
workforce is generally
 
familiar with mining
 
practices, and many are
 
experienced miners.
 
Water is expected to be sourced locally from a nearby public water sources or rivers.
 
Electricity is anticipated to
be
 
sourced
 
from
 
West
 
Penn
 
Power
 
or
 
Duquesne
 
Light.
 
The
 
service
 
industry
 
in
 
the
 
areas
 
surrounding
 
the
proposed mine complex has historically provided supplies,
 
equipment repairs and fabrication, etc.
 
The
 
property
 
mineral
 
rights
 
are
 
composed
 
of
 
41,615
 
total
 
hectares,
 
of
 
which
 
1,339
 
are
 
leased
 
from
 
private
landholders under two leases,
 
and 40,276 hectares are
 
owned by Coronado.
 
Subject to Coronado’s exercising
its renewal rights
 
thereunder,
 
both of the
 
leases expire
 
upon exhaustion
 
of the relevant
 
coal reserves,
 
which is
expected to occur in 2101.
 
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.
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
86
Under our current
 
mine development
 
plans, production
 
would begin at
 
the Pangburn
 
mine in 2033,
 
followed by
the Shaner mine in
 
2039 and, finally, the Fallowfield mine in
 
2058.
 
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, 2023, the book value of Mon
 
Valley was $17.5 million.
We are not aware of any significant encumbrances or defects in title with respect to the properties. However,
 
we
will be required to obtain alternate
 
zoning approval from the local township. Further, we will be required
 
to submit
formal permit
 
applications
 
to state
 
or federal
 
regulatory
 
agencies.
 
Although we
 
have commenced
 
the work
 
to
obtain the
 
necessary
 
permits and
 
zoning variances,
 
we are
 
aware that
 
the period
 
of time
 
necessary
 
to obtain
final authorizations,
 
for purposes
 
of commencing
 
the development,
 
construction and
 
ultimate production
 
at the
proposed mine site, may be significant, and there can be no assurance that we can obtain the necessary zoning
and
 
permits.
 
See
 
Item
 
1.
 
“Business—Regulatory
 
Matters—United
 
States”
 
for
 
a
 
discussion
 
of
 
the
 
permitting
conditions applicable to Mon Valley.
 
Coal mined from the
 
Mon Valley
 
mine complex would
 
be subject to a
 
federal black lung
 
excise tax of
 
$1.21 per
ton for underground mining and a
 
federal reclamation tax of $0.13 per ton
 
for underground mining.
 
However, the
federal black lung excise tax will only apply with respect
 
to coal sold domestically.
Mon Valley contains no resources exclusive of reserve tons as of
 
December 31, 2023 and 2022. Table 1-1 of the
Mon Valley
 
TRS (as
 
defined below)
 
provides a summary
 
of Mon Valley
 
resource tons
 
inclusive of
 
reserve tons
as of December 31, 2023.
A summary of Mon Valley’s
 
coal reserves as of December 31, 2023 and 2022 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, 2023 and 2022.
(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, 2023
78
57
134
8.0%
1.2%
(3)
35.0%
December 31, 2022
78
57
134
8.0%
1.2%
35.0%
 
(1)
 
Pricing data as
 
provided by
 
Coronado is described
 
in Section 16.2
 
of the
 
Mon Valley TRS. For
 
Mon Valley reserves as
 
of December
31,
 
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
 
$208
 
and
 
$178
 
per
 
Mt,
respectively, through year 2050, and
 
then increased by 2% annual inflation thereafter.
 
For Mon Valley reserves as
 
of December
31, 2023, the pricing data assumes
 
a blended HVB domestic and
 
export FOB-mine nominal price
 
of $164 per Mt for calendar
 
year
2029; HVB domestic and export prices respectively
 
are increased by 2% annual inflation thereafter.
(2)
 
Reported on a 6.0% moisture basis.
(3)
 
LOM sulfur for Pangburn is an estimated 1.2%; however, overall Mon
 
Valley Complex reserve average is 1.4% sulfur.
(4)
 
Some numerical figures in the
 
above table have been subject
 
to rounding adjustments. Accordingly,
 
numerical figures shown as
totals may not equal the sum of the figures that
 
precede them.
Total
 
reserves
 
did
 
not
 
change
 
from
 
December
 
31,
 
2022,
 
to
 
December
 
31,
 
2023.
 
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, 2022,
 
was prepared in February
 
2024 due to material differences
 
in the key financial
modifying factors
 
including coal sales
 
price assumptions,
 
operating costs
 
and capital
 
costs from
 
December 31,
2022, to
 
December
 
31,
 
2023.
 
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 16,
 
2024, or the Mon
 
Valley
 
TRS, is
filed as Exhibit 96.4 hereto. The U.S. QPs are not affiliated
 
with Coronado.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
87
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
 
cut-off
 
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.
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, and
thus no update was
 
completed for Greenbrier in
 
2024. Resources exclusive
 
of reserves are based
 
on assumed
(December 31, 2022)
 
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
 
December
 
31,
 
2022,
 
reserve
 
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%.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
88
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 $263
 
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:
 
 
Geology mapping, reports and models, including geotechnical and
 
hydrology aspects;
 
Coal resource and coal reserve estimates;
 
Mining operations and proposed growth options;
 
Coal preparation facilities;
 
Coal handling and transport;
 
Environmental matters and approvals;
 
Land management, including leases and other pertinent
 
agreements;
 
Veracity of existing information
 
supporting five-year plans and business plans;
 
Identification of key project drivers; and
 
Risks and opportunities.
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.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
89
Metallurgical.
 
Several factors
 
can influence
 
Met coal
 
supply and
 
demand and
 
pricing. Demand
 
is impacted
 
by
economic conditions and demand for
 
steel and is also impacted by competing
 
technologies used to make steel,
some of which do not use coal as a manufacturing input. Competition from other types of coal is also a key price
consideration
 
and
 
can
 
be
 
impacted
 
by
 
coal
 
quality
 
and
 
characteristics,
 
delivered
 
energy
 
cost
 
(including
transportation costs), customer service and support and
 
reliability of supply.
Seaborne
 
Met
 
coal
 
import
 
demand
 
can
 
be
 
significantly
 
impacted
 
by
 
the
 
availability
 
of
 
local
 
coal
 
production,
particularly
 
in
 
leading
 
Met
 
coal
 
import
 
countries
 
such
 
as
 
China
 
and
 
India,
 
among
 
others,
 
as
 
well
 
as
 
country-
specific policies restricting or promoting domestic supply. The competitiveness of seaborne Met coal supply from
leading Met coal
 
exporting countries, such as
 
Australia, the United
 
States, Russia, Canada and
 
Mongolia, among
others, is also an important price consideration.
In addition to
 
the factors noted
 
above, the prices
 
which may be
 
obtained at each
 
individual mine or
 
future mine
can be impacted
 
by factors such
 
as (i) the
 
mine’s location,
 
which impacts the
 
total delivered energy
 
costs to its
customers, (ii)
 
quality characteristics,
 
particularly
 
if they
 
are unique
 
relative
 
to competing
 
mines, (iii)
 
assumed
transportation costs and
 
(iv) other mine
 
costs that are
 
contractually passed on to
 
customers in certain
 
commercial
relationships.
Thermal.
 
Several factors can influence thermal coal supply
 
and demand and pricing. Demand is sensitive
 
to total
electric power generation volumes, which are
 
determined in part by the
 
impact of weather on heating
 
and cooling
demand,
 
inter-fuel
 
competition
 
in
 
the
 
electric
 
power
 
generation
 
mix,
 
changes
 
in
 
capacity
 
(additions
 
and
retirements),
 
inter-basin
 
or
 
inter-country
 
coal
 
competition,
 
coal
 
stockpiles
 
and
 
policy
 
and
 
regulations.
 
Supply
considerations
 
impacting
 
pricing
 
include
 
reserve
 
positions,
 
mining
 
methods,
 
strip
 
ratios,
 
production
 
costs
 
and
capacity and the cost of new supply (new mine developments
 
or extensions at existing mines).
The
 
cost
 
information
 
that
 
the
 
QPs
 
used
 
for
 
preliminary
 
resource
 
valuation
 
and
 
to
 
estimate
 
our
 
proven
 
and
probable reserves
 
were generally
 
internal projected
 
future costs
 
based on
 
historical costs
 
and expected
 
future
trends. The
 
estimated costs
 
normally include
 
mining, processing,
 
transportation, royalty,
 
tax and
 
other mining-
related
 
costs.
 
Our
 
estimated
 
mining
 
and
 
processing
 
costs
 
reflect
 
projected
 
changes
 
in
 
prices
 
of
 
consumable
commodities (mainly diesel fuel,
 
natural gas, explosives and
 
steel), labor costs,
 
geological and mining
 
conditions,
targeted
 
product
 
qualities
 
and
 
other
 
mining-related
 
costs.
 
Estimates
 
for
 
other
 
sales-related
 
costs
 
(mainly
transportation, royalty
 
and tax)
 
are based
 
on contractual
 
prices or
 
fixed rates.
 
Specific factors
 
that may
 
impact
the cost at our various operations include:
Geological settings.
 
The geological
 
characteristics of
 
each mine
 
are among
 
the most
 
important factors
that determine the mining cost. Our geology department conducts the exploration program and provides
geological models for the LOM process. Coal seam depth, thickness, dipping angle, partings and quality
constrain the available mining methods
 
and size of operations. Shallow
 
coal is typically mined by
 
surface
mining
 
methods
 
by
 
which
 
the
 
primary
 
cost
 
is
 
overburden
 
removal.
 
Deep
 
coal
 
is
 
typically
 
mined
 
by
underground
 
mining
 
methods
 
where
 
the
 
primary
 
costs
 
include
 
coal
 
extraction,
 
conveyance
 
and
 
roof
control.
Scale of operations and the equipment
 
sizes.
 
For surface mines, our dragline systems
 
generally have a
lower unit cost
 
than truck-and-shovel systems for
 
overburden removal. The longwall
 
operations generally
are more cost effective than bord-and-pillar operations
 
for underground mines.
Commodity prices.
 
For surface mines,
 
the costs of
 
diesel fuel and
 
explosives are
 
major components of
the total mining cost.
 
For underground mines, the
 
steel used for roof
 
bolts represents a significant
 
cost.
Commodity price
 
forecasts are
 
used to
 
project those
 
costs in
 
the financial
 
models we
 
use to
 
establish
our reserves.
Target
 
product quality.
 
By targeting
 
a premium
 
quality,
 
product, our
 
mining and
 
processing
 
processes
may experience
 
more coal
 
losses. By
 
lowering product
 
quality,
 
the coal
 
losses can
 
be minimized
 
and
therefore a lower cost per
 
Mt can be achieved. In
 
our mine plans, the product
 
qualities are estimated to
correspond to existing contracts and forecasted market
 
demands.
Transportation
 
costs.
 
We
 
have
 
entered
 
into
 
arrangements
 
with
 
third
 
parties
 
to
 
gain
 
access
 
to
transportation infrastructure and services where required, including
 
rail carriers and port owners. Where
coal
 
is
 
exported
 
or
 
sold
 
other
 
than
 
at
 
the
 
mine
 
gate,
 
the
 
costs
 
associated
 
with
 
these
 
arrangements
represent a significant portion of both the total cost of supplying coal to customers and of our production
costs.
 
As
 
a
 
result,
 
the
 
cost
 
of
 
transportation
 
is
 
not
 
only
 
a
 
key
 
factor
 
in
 
our
 
cost
 
base
 
but
 
also
 
in
 
the
purchasing
 
decision
 
of
 
customers.
 
Our
 
transportation
 
costs
 
vary
 
by
 
region.
 
See
 
Item
 
1.
 
“Business—
Transportation” for more information regarding
 
transportation arrangements for our operations.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
90
Royalty costs.
 
As conditions to
 
certain of the
 
Tenements,
 
Curragh is subject
 
to royalties payable
 
to the
Queensland
 
government
 
as
 
described
 
in
 
Item
 
1.
 
“Business—Regulatory
 
Matters—Australia—Mineral
Resources Act 1989
 
(Qld)”. These royalties
 
are in addition
 
to the Stanwell
 
rebate, as described
 
in Item
1. “Business—Customers—Stanwell.” Royalty
 
costs at our U.S. Operations
 
are based upon contractual
agreements for the coal
 
leased from private owners
 
and vary from
 
property to property
 
and by the type
of
 
mine
 
(i.e.,
 
surface
 
or
 
underground).
 
The
 
royalty
 
rates
 
under
 
leases
 
at
 
our
 
U.S.
 
Operations
 
range
between
 
3%
 
-
 
9%
 
of
 
revenues
 
from
 
coal
 
sales.
 
Under
 
some
 
of
 
the
 
leases,
 
we
 
are
 
required
 
to
 
pay
minimum royalties,
 
regardless
 
of production,
 
and/or “wheelage
 
fees” (i.e.,
 
fees payable
 
on coal
 
mined
and
 
removed
 
from
 
properties
 
other
 
than
 
the
 
particular
 
leasehold
 
and
 
hauled
 
across
 
the
 
leasehold
premises).
Black lung,
 
severance and
 
reclamation taxes.
 
Our U.S.
 
Operations are
 
subject to
 
a federal
 
black lung
excise tax on coal sold domestically.
Exchange rates.
 
Costs related to our Australian Operations are predominantly denominated in A$, while
the coal that our Australian Operations
 
export is sold in US$. As
 
a result, A$-US$ exchange rates impact
the U.S. dollar cost of our Australian Operations’ production
 
.
For further discussion of comprehensive risk inherent in the estimation, see Item 1A.
 
“Risk Factors—Operational
and Technology
 
Risks—We
 
rely on
 
estimates
 
of our
 
recoverable resources
 
and
 
reserves,
 
which
 
are complex
due to geological characteristics of the properties and the
 
number of assumptions made.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
91
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,
 
2023
 
92
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,
 
2023
 
93
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, 2023, we had 167,645,373
 
shares of our common stock issued
 
and outstanding with 7,735
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 7,734 registered owners
 
of our
CDIs on December 31, 2023.
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 Senior Secured
 
Notes Indenture governing
 
our Notes and
 
covenants under the
ABL Facility and any other factors the Board of Directors
 
may consider relevant.
 
Our objective in setting our dividend policy is to deliver
 
stockholder returns while maintaining flexibility to pursue
our strategic
 
initiatives within
 
a prudent
 
capital structure.
 
Our dividend
 
policy is
 
to distribute
 
between 60%
 
and
100%
 
of
 
available
 
free
 
cash.
 
Available
 
free
 
cash
 
is
 
defined
 
as
 
net
 
cash
 
from
 
operating
 
activities
 
less
 
capital
expenditure, acquisition expenditure,
 
amounts reserved for
 
capital expenditure and
 
acquisition expenditure and
amounts required for
 
debt servicing. In
 
circumstances where there is
 
surplus available free
 
cash, at the
 
discretion
of
 
our
 
Board
 
of
 
Directors
 
and
 
in
 
light
 
of
 
business
 
and
 
market
 
conditions,
 
we
 
may
 
consider
 
the
 
potential
 
for
additional
 
stockholder
 
returns
 
through
 
special
 
dividends
 
and
 
share
 
buy-backs
 
as
 
part
 
of
 
its
 
broader
 
capital
management strategy.
Summary Description of the Company’s
 
Non-Stockholder Approved Equity Compensation
 
Plans
The Company does not have any non-stockholder approved
 
equity compensation plans.
Recent Sales of Unregistered Securities
Other than as previously
 
disclosed in a Quarterly
 
Report on Form 10-Q
 
or in a Current
 
Report on Form 8-K,
 
we
did not issue
 
any shares of
 
our common stock
 
in a transaction
 
that was not
 
registered under
 
the Securities Act
during the year ended December 31, 2023.
Purchases of Equity Securities by the Issuer and
 
Affiliated Purchases
We had no repurchases of equity securities for the
 
three months ended December 31, 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
94
ITEM 6.
 
[Reserved]
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
95
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, 2023,
 
we produced and sold
 
15.8 MMt of coal.
 
Met coal and
 
thermal coal sales
represented 75.8% and 24.2%, respectively,
 
of our total volume of coal
 
sold and 91.4% and 8.6%,
 
respectively,
of total coal revenues.
During the year ended December 31, 2023, Coronado navigated through some operational headwinds that were
out of our control.
Our
 
Australian
 
Operations
 
suffered
 
production
 
downtime
 
as
 
a
 
result
 
of
 
severe
 
weather
 
events,
 
including
significant
 
rainfall
 
in
 
the
 
March
 
and
 
December
 
quarters,
 
and
 
unscheduled
 
downtime
 
of
 
a
 
dragline
 
due
 
to
mechanical failure. Despite these adverse
 
events, our Australian Operations completed
 
planned maintenance on
its
 
two
 
coal
 
preparation
 
plants
 
and
 
invested
 
in
 
additional
 
fleets
 
to
 
advance
 
pre-strip
 
waste
 
movement,
 
to
decongest the
 
operating pits,
 
and to
 
improve the
 
mine’s strike
 
-length and
 
future coal
 
availability.
 
In addition
 
to
lost production from
 
the unforeseen events,
 
our Australian Operation
 
also experienced significant
 
shipping delays
in the December quarter
 
due to labor
 
issues faced at the
 
RG Tanna
 
Coal Terminal
 
resulting in deferral
 
of sales
volumes to 2024.
Our U.S. Operations
 
were impacted
 
by geotechnical
 
issues at the
 
Buchanan mine, specifically
 
a roof fall
 
in the
December
 
quarter,
 
resulting
 
in
 
10
 
days
 
outage
 
to
 
production
 
to
 
repair
 
equipment
 
and
 
secure
 
additional
 
roof
support, and the
 
impact of
 
a rock intrusion
 
in the September
 
quarter resulting
 
in a 14-day
 
outage to production
as
 
we
 
mined
 
through
 
the
 
intrusion.
 
Both
 
events
 
have
 
been
 
successfully
 
addressed,
 
with
 
normal
 
longwall
operating conditions restored at the mine.
Overall, for
 
the year
 
ended December
 
31, 2023,
 
saleable production
 
was 0.2MMt
 
lower and sales
 
volume was
0.6MMt compared to the year ended December 31, 2022.
The
 
benchmark
 
PLV
 
HCC
 
FOB
 
AUS average
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
of
 
$296.3
 
per
 
Mt
 
was
18.5% lower compared to
 
$363.7 per Mt for
 
the year ended December 31,
 
2022, when we saw
 
record high prices
as global Met coal supply readjusted from the impact
 
of the Russia and Ukraine war.
 
Met coal
 
market remains
 
buoyant as
 
demand
 
in emerging
 
and developing
 
economies,
 
such as
 
India, a
 
major
export destination, continues
 
to be strong. The
 
PLV HCC
 
FOB AUS index price
 
trended upwards in
 
the second
half of 2023 increasing 39% to $323.8 per Mt at the end of December 31, 2023. This increase
 
is primarily due to
a combination of tight supply
 
from Australia, caused by
 
adverse weather events and
 
reduced port throughput in
Queensland,
 
and
 
heightened
 
demand
 
from
 
Indian
 
and
 
Asian
 
steel
 
makers
 
who
 
were
 
restocking
 
from
 
lower
inventory levels.
 
Coal revenues of $2,830.7
 
million for the year ended
 
December 31, 2023, 19.8%
 
lower compared to 2022,
 
was
largely driven by lower sales
 
volumes, 0.6MMt lower compared to
 
2022 and lower average realized Met
 
price per
Mt sold,
 
which was
 
$50.2 per
 
Mt lower
 
than the
 
average realized
 
Met price
 
of $265.8
 
per Mt
 
sold for
 
the year
ended December 31, 2022.
 
Mining costs for the
 
year ended December 31, 2023, were
 
$273.1 million and $19.2 per
 
Mt sold higher compared
to the
 
corresponding period in
 
2022, largely
 
driven by
 
the impacts of
 
lower production
 
following significant weather
events
 
and
 
equipment
 
breakdown
 
at
 
our
 
Australian
 
Operations,
 
adverse
 
geological
 
conditions
 
at
 
our
 
U.S.
Operations,
 
combined
 
with
 
elevated
 
inflation
 
levels
 
mobilization
 
of
 
additional
 
fleets,
 
and
 
port
 
constraints
impacting sales volumes at our Australian Operations.
 
Dividends
During the year
 
ended December
 
31, 2023, Coronado
 
paid total dividends
 
of $16.7 million
 
to stockholders
 
and
CDI holders on the ASX.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
96
Liquidity
As of December
 
31, 2023,
 
our net cash
 
position was
 
$96.7 million,
 
comprised of
 
$339.0 million
 
cash and cash
equivalents
 
(excluding
 
restricted
 
cash)
 
less
 
$242.3
 
million
 
aggregate
 
principal
 
amount
 
of
 
Notes
 
outstanding.
Coronado
 
had
 
available
 
liquidity
 
of
 
$489.0
 
million
 
as
 
of
 
December
 
31,
 
2023,
 
consisting
 
of
 
cash
 
and
 
cash
equivalents
 
(excluding
 
restricted
 
cash),
 
unrestricted
 
short-term
 
deposits
 
of
 
$21.9
 
million
 
and
 
$128.1
 
million
availability under our New ABL facility.
Safety
For
 
our
 
Australian
 
Operations,
 
the
 
twelve-month
 
rolling
 
average
 
Total
 
Reportable
 
Injury
 
Frequency
 
Rate
 
at
December 31, 2023
 
was 1.83 compared
 
to 3.92 at
 
the end of
 
December 31,
 
2022. At our
 
U.S. Operations,
 
the
twelve-month rolling average Total
 
Reportable Incident Rate, at December 31, 2023 was 1.44 compared to 2.42
at the end of December 31, 2022.
 
These strong results reflect a record
 
safety rate at our U.S. Operations
 
under
Coronado’s ownership, and the best safety
 
rate since May 2018 for our Australian
 
Operations. Reportable rates
for our Australian and U.S. Operations are below the relevant
 
industry benchmarks.
Our Lower
 
War Eagle
 
mine, part
 
of our
 
Logan mining
 
complex at
 
our U.S.
 
Operations, which
 
includes multiple
underground and surface mines, achieved 4 years of being Lost
 
Time Injury,
 
or LTI, free
 
in 2023.
The safety of our workforce is our number one priority,
 
and we remain focused on the safety and wellbeing of all
employees and
 
contracting parties. Coronado
 
continues to implement
 
safety initiatives to
 
improve our
 
safety rates
every quarter.
Segment Reporting
In accordance with
 
Accounting Standards Codification,
 
or ASC, 280,
 
Segment Reporting, we
 
have adopted the
following reporting
 
segments: Australia and
 
the United
 
States. In
 
addition, “Other and
 
Corporate” is
 
not a
 
reporting
segment but is disclosed for the purposes of reconciliation
 
to our Consolidated Financial Statements.
Results of Operations
How We Evaluate Our Operations
We
 
evaluate
 
our
 
operations
 
based
 
on
 
the
 
volume
 
of
 
coal
 
we
 
can
 
safely
 
produce
 
and
 
sell
 
in
 
compliance
 
with
regulatory
 
standards,
 
and
 
the
 
prices
 
we
 
receive
 
for
 
our
 
coal.
 
Our
 
sales
 
volume
 
and
 
sales
 
prices
 
are
 
largely
dependent upon
 
the terms
 
of our
 
coal sales
 
contracts, for
 
which prices
 
generally are
 
set based
 
on daily
 
index
averages, on a quarterly basis or on annual fixed price
 
contracts.
Our management
 
uses a
 
variety of
 
financial and
 
operating metrics
 
to analyze
 
our performance.
 
These metrics
are significant factors
 
in assessing
 
our operating results
 
and profitability.
 
These financial
 
and operating metrics
include: (i) safety and environmental metrics; (ii) Adjusted EBITDA; (iii) total sales volumes and average realized
price
 
per
 
Mt
 
sold,
 
which
 
we
 
define
 
as
 
total
 
coal
 
revenues
 
divided
 
by
 
total
 
sales
 
volume;
 
(iv)
 
Met
 
coal
 
sales
volumes and average realized Met price per
 
Mt sold, which we define as Met coal
 
revenues divided by Met coal
sales volume; (v)
 
average segment mining
 
costs per Mt sold,
 
which we define
 
as mining costs
 
divided by sales
volumes (excluding non-produced coal) for the respective segment; (vi) average segment operating costs per
 
Mt
sold, which we define as segment operating costs
 
divided by sales volumes for the respective segment
 
and (vii)
net cash, which we define
 
as cash and cash equivalents
 
(excluding restricted cash)
 
less outstanding aggregate
principal amount of the Notes.
Coal revenues are shown on our Consolidated Statements of Operations
 
and Comprehensive Income exclusive
of other
 
revenues. Generally,
 
export sale
 
contracts for
 
our Australian
 
Operations require
 
us to
 
bear the
 
cost of
freight
 
from
 
our
 
mines
 
to
 
the
 
applicable
 
outbound
 
shipping
 
port,
 
while
 
freight
 
costs
 
from
 
the
 
port
 
to
 
the
 
end
destination
 
are typically
 
borne
 
by the
 
customer.
 
In circumstances
 
where
 
we sell
 
through
 
intermediaries
 
to the
export market from our
 
U.S. Operations, sales
 
are recognized when
 
the title to the
 
coal passes to the
 
customer
at the
 
mine
 
load out
 
similar
 
to a
 
domestic
 
sale.
 
For
 
our domestic
 
sales,
 
customers
 
typically
 
bear
 
the
 
cost
 
of
freight.
 
As
 
such,
 
freight
 
expenses
 
are
 
excluded
 
from
 
the
 
cost
 
of
 
coal
 
revenues
 
to
 
allow
 
for
 
consistency
 
and
comparability in evaluating our operating performance.
Non-GAAP Financial Measures; Other Measures
The
 
following
 
discussion
 
of
 
our
 
results
 
includes
 
references
 
to
 
and
 
analysis
 
of
 
Adjusted
 
EBITDA,
 
Segment
Adjusted EBITDA and mining
 
costs, which are financial
 
measures not recognized in
 
accordance with U.S. GAAP.
Non-GAAP financial
 
measures, including
 
Adjusted EBITDA,
 
Segment Adjusted
 
EBITDA and
 
mining costs,
 
are
useful to our investors to measure our operating performance.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
97
Non-GAAP financial measures are intended to provide additional information only and do not have any standard
meaning prescribed
 
by U.S.
 
GAAP.
 
These measures
 
should not
 
be considered
 
in isolation
 
or as
 
substitute for
measures of performance prepared in accordance with
 
U.S. GAAP.
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, tax, depreciation, depletion and
amortization
 
and
 
other
 
foreign
 
exchange
 
losses.
 
Adjusted
 
EBITDA
 
is
 
also
 
adjusted
 
for
 
certain
 
discrete
 
non-
recurring items that we exclude in
 
analyzing each of our segments’
 
operating performance. Adjusted EBITDA
 
is
not intended to
 
serve as an
 
alternative to U.S. GAAP
 
measures of performance
 
and may not
 
be comparable to
similarly titled measures presented
 
by other companies. A reconciliation
 
of Adjusted EBITDA to its most
 
directly
comparable measure under U.S. GAAP is included below.
 
Segment
 
Adjusted
 
EBITDA
 
is
 
defined
 
as
 
Adjusted
 
EBITDA
 
by
 
operating
 
and
 
reporting
 
segment,
 
adjusted
 
for
certain
 
transactions,
 
eliminations
 
or
 
adjustments
 
that
 
our
 
CODM
 
does
 
not
 
consider
 
for
 
making
 
decisions
 
to
allocate resources among segments or assessing segment performance.
 
Segment Adjusted EBITDA is used as
a
 
supplemental
 
financial
 
measure
 
by
 
management
 
and
 
by
 
external
 
users
 
of
 
our
 
Consolidated
 
Financial
Statements such
 
as investors,
 
industry analysts
 
and lenders
 
to assess
 
the operating
 
performance of
 
the business.
Mining costs,
 
a non-GAAP
 
measure, are
 
based on
 
the reported
 
cost of
 
coal revenues,
 
which is
 
shown on
 
our
statement of
 
operations and comprehensive
 
income exclusive of
 
freight expense, Stanwell
 
rebate, other royalties,
depreciation,
 
depletion
 
and
 
amortization
 
and
 
selling,
 
general
 
and
 
administrative
 
expenses,
 
adjusted
 
for
 
other
items that do not relate
 
directly to the costs incurred to
 
produce coal at the mine.
 
Mining costs exclude these cost
components as
 
our CODM
 
does not
 
view these
 
costs as
 
directly attributable
 
to the
 
production of
 
coal. Mining
costs
 
is
 
used
 
as
 
a
 
supplemental
 
financial
 
measure
 
by
 
management,
 
providing
 
an
 
accurate
 
view
 
of
 
the
 
costs
directly attributable to the production
 
of coal at our mining
 
segments, and by external
 
users of our Consolidated
Financial Statements,
 
such as
 
investors, industry
 
analysts and
 
ratings agencies,
 
to assess
 
our mine
 
operating
performance in comparison to the mine operating performance
 
of other companies in the coal industry.
Year Ended December 31,
 
2023 Compared to Year
 
Ended December 31, 2022
Summary
The financial and operational highlights for the year ended December
 
31, 2023 include:
 
Net income of $156.1 million for the
 
year ended December 31, 2023, decreased
 
by $615.6 million, from
$771.7 million for the year
 
ended December 31, 2022. The
 
decrease was primarily driven
 
by lower coal
revenues
 
and
 
higher
 
mining
 
and
 
operating
 
costs,
 
partially
 
offset
 
by
 
an
 
income
 
tax
 
benefit
 
in
 
2023
compared to an income tax expense in 2022.
 
 
Average realized Met price per
 
Mt sold of $215.7 for the year
 
ended December 31, 2023 was
 
$50.2 per
Mt sold lower compared to $265.8 per Mt sold for the year ended December 31, 2022, largely a result of
lower Met coal index price in 2023 compared to the record
 
highs in 2022 from the impacts of the Russia
and Ukraine war.
 
The first half
 
of 2023 saw
 
Met coal index
 
prices decline significantly
 
as steel demand
weakened, however,
 
Met coal prices trended upwards in the second half of 2023 due to tight supply and
port constraints in Australia.
 
Total sales volume was 15.8 MMt for the
 
year ended December 31, 2023,
 
or 0.6 MMt lower
 
than the year
ended December 31, 2022. The lower sales volumes were primarily driven by port constraints impacting
shipments from RG Tanna
 
Terminal
 
in Queensland, Australia
 
and production downtime
 
from significant
wet weather events
 
and equipment breakdowns
 
at our Australian
 
Operations combined
 
with geological
issues at our U.S. Operations.
 
 
Adjusted EBITDA for
 
the year ended
 
December 31, 2023,
 
totaled $381.7 million,
 
a decrease of
 
$833.9
million, from Adjusted EBITDA of $1,215.6 million
 
for the year ended December 31, 2022.
 
This decrease
was a result of lower coal revenues and higher operating
 
costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
98
For Year Ended December 31,
 
(US$ in thousands)
2023
2022
Change
%
Revenues:
Coal revenues
2,830,689
3,527,626
(696,937)
(19.8%)
Other revenues
59,914
43,916
15,998
36.4%
Total
 
revenues
2,890,603
3,571,542
(680,939)
(19.1%)
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
1,731,630
1,515,585
216,045
14.3%
Depreciation, depletion and amortization
160,711
167,046
(6,335)
(3.8%)
Freight expenses
259,710
249,081
10,629
4.3%
Stanwell rebate
136,523
165,995
(29,472)
(17.8%)
Other royalties
345,882
385,065
(39,183)
(10.2%)
Selling, general, and administrative expenses
84,177
42,499
41,678
98.1%
Total
 
costs and expenses
2,718,633
2,525,271
193,362
7.7%
Other income (expenses):
Interest expense, net
(56,751)
(67,632)
10,881
(16.1%)
Loss on debt extinguishment
(1,385)
(5,336)
3,951
(74.0%)
Decrease (increase) in provision for discounting and
credit losses
4,216
(3,821)
8,037
(210.3%)
Other, net
5,764
33,795
(28,031)
(82.9%)
Total
 
other expense, net
(48,156)
(42,994)
(5,162)
12.0%
Income before tax
123,814
1,003,277
(879,463)
(87.7%)
Income tax benefit (expense)
32,251
(231,574)
263,825
(113.9%)
Net income
156,065
771,703
(615,638)
(79.8%)
Net income attributable to Coronado Global
Resources Inc.
156,065
771,703
(615,638)
(79.8%)
Coal revenues
Coal
 
revenues
 
were
 
$2,830.7 million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
a
 
decrease
 
of
 
$696.9
 
million,
compared to $3,527.6 million for
 
the year ended
 
December 31, 2022.
 
This decrease was driven
 
by 0.6 MMt
 
lower
sales volumes in 2023 and lower average realized Met price per Mt sold of $215.7 for the year ended December
31, 2023, compared to $265.8 per Mt sold in 2022.
 
Other revenues
Other revenues
 
were $59.9 million
 
for the
 
year ended
 
December 31, 2023,
 
an increase of
 
$16.0 million,
 
compared
to $43.9 million for the same
 
period in 2022. This increase was
 
primarily driven by termination fee revenue
 
from
a coal sales contract cancelled at our U.S. Operations.
Cost of coal revenues (exclusive of Items shown
 
separately below)
Cost of coal revenues comprised of costs related to produced tons sold, along with changes in both the volumes
and carrying values of coal inventory.
 
Cost of coal revenues include items
 
such as direct operating costs, which
include employee-related costs, materials and supplies, contractor services, coal handling and preparation costs
and production taxes.
 
Total
 
cost of coal revenues
 
was $1,731.6 million for
 
the year ended
 
December 31, 2023,
 
an increase of $216.0
million, compared to $1,515.6 million for the same period
 
in 2022.
 
Cost of coal revenues for our Australian Operations for the year ended
 
December 31, 2023, were $155.8 million
higher compared to
 
the same period
 
in 2022, primarily
 
driven by additional
 
fleets mobilized in
 
2023 to advance
pre-strip
 
overburden
 
removal,
 
the
 
inflationary
 
impact
 
on
 
labor,
 
contractor
 
and
 
other
 
supply
 
costs,
 
higher
maintenance
 
expenses
 
from
 
unexpected
 
equipment
 
failures,
 
partially
 
offset
 
by
 
lower
 
purchased
 
coal
 
and
favorable foreign
 
exchange
 
rate on
 
translation
 
of our
 
Australian Operations
 
for the
 
year
 
ended December
 
31,
2023,
 
of
 
A$/US$:
 
0.66
 
compared
 
to
 
0.70
 
for
 
the
 
same
 
period
 
in
 
2022.
 
Cost
 
of
 
coal
 
revenues
 
for
 
our
 
U.S.
Operations were
 
$60.3 million
 
higher for
 
the year
 
ended December
 
31, 2023,
 
compared to
 
the same
 
period in
2022,
 
also
 
impacted
 
by
 
an
 
elevated
 
inflationary
 
environment
 
and
 
higher
 
consumables
 
and
 
unplanned
maintenance costs following a rock intrusion and a roof
 
collapse in 2023.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
99
Depreciation, depletion and amortization
Depreciation, depletion and amortization were $160.7 million for the
 
year ended December 31, 2023, a
 
decrease
of $6.3 million, compared to
 
$167.0 million for the
 
year ended December 31,
 
2022. The decrease was
 
associated
with assets fully depreciated, lower depreciation
 
rates following annual useful life review at
 
the beginning of 2023
and
 
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, 2023.
Freight expenses
Freight expenses
 
totaled
 
$259.7
 
million for
 
the year
 
ended December
 
31, 2023,
 
an increase
 
of $10.6
 
million,
compared to $249.1 million
 
for the same
 
period in 2022. Rail
 
costs at our Australian
 
Operations contributed $13.2
million to the
 
increase, mainly
 
due to higher
 
regulated costs
 
associated with access
 
to the Central
 
Queensland
Coal Network, partially offset by lower freight costs
 
at our U.S. Operations due to lower sales volumes.
 
Stanwell rebate
The Stanwell rebate was
 
$136.5 million for the
 
year ended December
 
31, 2023, a decrease
 
of $29.5 million, as
compared
 
to
 
$166.0
 
million
 
for the
 
year
 
ended
 
December
 
31,
 
2022.
 
The
 
decrease
 
was
 
due
 
to
 
lower
 
realized
reference coal pricing
 
for the prior
 
twelve-month period used to
 
calculate the rebate compared
 
to the same
 
period
in 2022 and favorable average foreign exchange rate
 
on translation of the Australian Operations.
Other royalties
Other
 
royalties
 
were
 
$345.9 million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
a
 
decrease
 
of
 
$39.2 million,
 
as
compared
 
to $385.1
 
million
 
for the
 
year
 
ended December
 
31,
 
2022. Our
 
Australian
 
Operations
 
contributed
 
to
$36.0
 
million
 
of
 
the
 
decrease
 
due
 
to
 
lower
 
coal
 
revenues
 
and
 
favorable
 
exchange
 
rate
 
on
 
translation
 
of
 
the
Australian Operations, partially
 
offset by
 
the adverse impact
 
of the new
 
QLD royalty regime,
 
effective from
 
July
1, 2022, which resulted in $59 million additional royalty
 
cost in 2023.
Selling, general, and administrative expenses
 
Selling,
 
general,
 
and
 
administrative
 
expenses
 
increased
 
by
 
$41.7
 
million
 
to
 
$84.2
 
million
 
for
 
the
 
year
 
ended
December 31, 2023, compared
 
to $42.5 million for
 
the year ended December
 
31, 2022. The increase
 
relates to
the additional accrual of $41.3 million relating to the stamp
 
duty on Curragh’s acquisition assessed by the
 
QRO.
The Company
 
disputes
 
the
 
amount
 
assessed by
 
the
 
QRO. Refer
 
to Part
 
II, Item
 
8. Financial
 
Statements and
Supplementary Data, Note 26 “Contingencies” for further
 
information.
Interest Expense, net
Interest
 
expense,
 
net
 
was
 
$56.8
 
million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
a
 
decrease
 
of
 
$10.9
 
million
compared
 
to
 
$67.6
 
million
 
for
 
the
 
same
 
period
 
in
 
2022.
 
The
 
decrease
 
was
 
due
 
to
 
lower
 
aggregate
 
principal
amount of the Notes outstanding following redemptions
 
of $72.7 million in the fourth quarter of 2022.
Decrease (increase) in Provision for Discounting and
 
Credit Losses
Decrease in provision for discounting
 
and credit losses of $4.2 million for
 
the year ended December 31, 2023,
 
a
favorable movement
 
of $8.0 million
 
compared to
 
increase in
 
provision for
 
discounting and
 
credit losses
 
of $3.8
million for the
 
year ended December
 
31, 2022. The
 
lower provision was
 
primarily driven by
 
collection of certain
overdue trade receivables at December 31, 2022 during
 
the year ended December 31, 2023.
Other, net
Other,
 
net was
 
$5.8 million
 
in the
 
year ended
 
December 31,
 
2023, a
 
decrease of
 
$28.0 million
 
compared to
 
of
$33.8 million
 
for the
 
year ended
 
December
 
31, 2022.
 
The decrease
 
largely
 
relates
 
to lower
 
foreign
 
exchange
gains recognized
 
in the translation
 
of short-term
 
inter-entity balances
 
between certain
 
entities within
 
the Group
that are denominated in currencies other than their
 
respective functional currencies.
Income tax benefit (expense)
Income tax benefit
 
of $32.2 million
 
for the year
 
ended December
 
31, 2023, compared
 
to $231.6 million
 
income
tax
 
expense
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2022,
 
primarily
 
driven
 
by
 
loss
 
before
 
tax
 
from
 
our
 
Australian
operations and the benefit of prior year tax return adjustments
 
and amendments.
The income tax benefit for
 
the year ended December 31,
 
2023 resulted in an annual effective
 
tax rate of (26.0%).
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
100
Year Ended December 31,
 
2022 Compared to Year
 
Ended December 31, 2021
The Company’s comparison of 2022 results to
 
2021 results is included in the
 
Company’s
 
under Part II Item 7,
 
“Management’s Discussion and Analysis
of Financial Condition and Results of Operations”.
 
Supplemental Segment Financial Data
Year Ended December 31,
 
2023 Compared to Year
 
Ended December 31, 2022
Australian Operations
For Year Ended December 31,
(US$ in thousands)
2023
2022
Change
%
Sales Volume (MMt)
9.9
10.0
(0.1)
(1.0)%
Total
 
revenues ($)
1,681,522
2,116,555
(435,033)
(20.6)%
Coal revenues ($)
1,645,752
2,078,518
(432,766)
(20.8)%
Average realized price per Mt sold ($/Mt)
167.0
208.9
(41.9)
(20.0)%
Met sales volume (MMt)
6.8
6.5
0.3
4.2%
Met coal revenues ($)
1,557,471
1,968,173
(410,702)
(20.9)%
Average realized Met price per Mt sold ($/Mt)
230.2
303.1
(72.9)
(24.1)%
Mining costs ($)
1,058,598
864,616
193,982
22.4%
Mining costs per Mt sold ($/Mt)
108.5
89.5
19.0
21.2%
Operating costs ($)
1,679,954
1,575,786
104,168
6.6%
Operating costs per Mt sold ($/Mt)
170.5
158.3
12.2
7.7%
Segment Adjusted EBITDA ($)
2,249
541,208
(538,959)
(99.6)%
Coal revenues
 
for our
 
Australian Operations
 
for the
 
year ended
 
December
 
31, 2023,
 
were $1,645.8
 
million,
 
a
decrease of $432.8 million, or 20.6%, compared to $2,078.5 million for the year ended December 31, 2022. This
decrease was primarily driven by lower average realized Met price of $230.2 per Mt, a decrease of
 
$72.9 per Mt,
compared to $303.1 per Mt sold during the
 
same period in 2022. The higher realized price during the
 
year ended
December
 
31,
 
2022,
 
was
 
a
 
result
 
of
 
higher
 
Met
 
coal
 
index
 
prices
 
from
 
disruptions
 
in
 
trade
 
flows
 
and
 
supply
dynamics caused by
 
the war between
 
Russia and Ukraine.
 
Significant wet weather
 
events and port
 
constraints
during
 
2023
 
impacted
 
the
 
recovery
 
from
 
low
 
sales
 
volumes
 
in
 
2022
 
and
 
overall
 
sales
 
volumes
 
remained
consistent year on year.
 
Operating costs increased
 
by $104.2 million, or
 
6.6%, for the year
 
ended December 31,
 
2023, compared to the
year ended
 
December 31,
 
2022. The
 
increase was
 
driven by
 
higher mining
 
costs and
 
freight expense.
 
Mining
costs were $194.0
 
million, or 22.4%,
 
higher for the
 
year ended December 31,
 
2023, compared to the
 
same period
in
 
2022,
 
due
 
to
 
additional
 
fleets
 
mobilized
 
in
 
2023,
 
inflationary
 
impact
 
on
 
costs
 
and
 
additional
 
repairs
 
and
maintenance
 
costs
 
associated
 
with
 
equipment
 
failures.
 
Higher
 
mining
 
costs
 
were
 
partially
 
offset
 
by
 
favorable
average foreign exchange on translation of our Australian Operations, lower Stanwell rebate and other royalties’
expense as a result
 
of lower sales volume
 
and lower price
 
realizations. Mining and
 
Operating costs per
 
Mt sold
increased by
 
$19.0 and $12.2,
 
respectively,
 
compared to
 
the same
 
period in 2022,
 
due to increased
 
costs and
lower sales volume.
For
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
Segment
 
Adjusted
 
EBITDA
 
was
 
$2.2
 
million,
 
a
 
decrease
 
of
 
$539.0
million compared
 
to Segment
 
Adjusted EBITDA
 
of $541.2
 
million for
 
the year
 
ended December
 
31, 2022.
 
This
decrease was a result of lower coal revenues and higher
 
mining and operating costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
101
United States
For Year Ended December 31,
(US$ in thousands)
2023
2022
Change
%
Sales Volume (MMt)
6.0
6.4
(0.4)
(7.2)%
Total
 
revenues ($)
1,209,081
1,454,987
(245,906)
(16.9)%
Coal revenues ($)
1,184,937
1,449,108
(264,171)
(18.2)%
Average realized price per Mt sold ($/Mt)
198.4
225.2
(26.8)
(11.9)%
Met sales volume (MMt)
5.2
6.2
(1.0)
(14.9)%
Met coal revenues ($)
1,031,012
1,394,880
(363,868)
(26.1)%
Average realized Met price per Mt sold ($/Mt)
196.9
226.5
(29.6)
(13.1)%
Mining costs ($)
610,925
531,812
79,113
14.9%
Mining costs per Mt sold ($/Mt)
106.0
86.5
19.5
22.5%
Operating costs ($)
793,791
739,940
53,851
7.3%
Operating costs per Mt sold ($/Mt)
132.9
115.0
17.9
15.6%
Segment Adjusted EBITDA ($)
421,093
716,661
(295,568)
(41.2)%
Coal revenues
 
for our
 
U.S. Operations
 
decreased by
 
$264.2 million,
 
or 18.2%,
 
to $1,184.9
 
million for
 
the year
ended
 
December
 
31,
 
2023,
 
as
 
compared
 
to
 
$1,449.1
 
million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2022.
 
This
decrease was driven
 
by a lower
 
average realized Met
 
price per Mt
 
sold for the
 
year ended December
 
31, 2023
of $196.9
 
compared to
 
$226.5 per
 
Mt sold
 
for the
 
same period
 
in 2022,
 
a result
 
of lower
 
Met coal
 
price index,
product mix skewed towards lower quality Met
 
coal and lower sales volumes driven primarily
 
by lower production
as a result of adverse geological conditions experienced
 
at the Buchanan mine.
Operating costs
 
increased by
 
$53.9 million,
 
or 7.3%,
 
to $793.8
 
million for
 
the year
 
ended December
 
31, 2023,
compared to
 
operating costs
 
of $739.9
 
million for
 
the year
 
ended December
 
31, 2022,
 
driven by
 
higher mining
costs, partially offset
 
by lower royalties
 
and freight expenses
 
from lower sales volume.
 
Mining costs contributed
$79.1 million
 
of the
 
increase driven
 
by continued
 
inflationary
 
impact on
 
labor and
 
supply costs
 
and unplanned
maintenance costs. Mining
 
and Operating costs
 
per Mt sold
 
increased by $19.5
 
and $17.9, respectively,
 
due to
lower sales volume and higher costs for the year ended December
 
31, 2023.
 
Segment Adjusted EBITDA
 
of $421.1
 
million for
 
the year ended
 
December 31,
 
2023, decreased by
 
$295.6 million,
or 41.2%, compared to
 
$716.7 million for the
 
year ended December 31, 2022.
 
This decrease was primarily
 
driven
by lower coal revenues and higher mining and other
 
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)
2023
2022
Change
%
Corporate and other expenses
42,856
42,499
357
0.8%
Other, net
(1,227)
(254)
(973)
383.1%
Total
 
Corporate and Other Adjusted EBITDA
41,629
42,245
(616)
(1.5)%
Corporate
 
and
 
other
 
costs
 
decreased
 
$0.6
 
million
 
to
 
$41.6
 
million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
compared to $42.2 million for the year ended December
 
31, 2022, due to the timing of certain corporate costs
 
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
102
Mining and operating costs for the Year Ended December 31, 2023 compared to Year
 
December 31, 2022
A reconciliation of
 
segment costs and
 
expenses, segment operating
 
costs, and segment
 
mining costs is
 
shown
below:
For Year Ended December 31, 2023
(US$ in thousands)
Australia
United States
Other /
Corporate
Total
Consolidated
Total costs and
 
expenses
1,756,635
876,753
85,245
2,718,633
Less: Selling, general and administrative expense
(30)
(84,147)
(84,177)
Less: Depreciation, depletion and amortization
(76,651)
(82,962)
(1,098)
(160,711)
Total operating costs
1,679,954
793,791
2,473,745
Less: Other royalties
(294,467)
(51,415)
(345,882)
Less: Stanwell rebate
(136,523)
(136,523)
Less: Freight expenses
(166,980)
(92,730)
(259,710)
Less: Other non-mining costs
(23,386)
(38,721)
(62,107)
Total mining costs
1,058,598
610,925
1,669,523
Sales Volume excluding non-produced
 
coal (MMt)
9.8
5.8
15.5
Mining cost per Mt sold ($/Mt)
108.5
106.0
107.6
For Year Ended December 31, 2022
(US$ 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
Average realized Met price for the Year
 
Ended December 31, 2023 compared to Year
 
December 31, 2022
A reconciliation of the Company’s average realized
 
Met coal revenue is shown below:
For Year Ended December 31,
(US$ in thousands)
2023
2022
Change
%
Met sales volume (MMt)
12.0
12.7
(0.7)
(5.5)%
Met coal revenues ($)
2,588,483
3,363,053
(774,570)
(23.0)%
Average realized met price per Mt sold ($/Mt)
215.7
265.8
(50.2)
(19.0)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
103
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
For year ended December 31,
(US$ in thousands)
2023
2022
2021
Reconciliation to Adjusted EBITDA:
Net income
156,065
771,703
189,423
Add: Depreciation, depletion and amortization
160,711
167,046
177,875
Add: Interest expense, net
56,751
67,632
68,062
Add: Other foreign exchange (gains) losses
(2,899)
(32,259)
7,049
Add: Loss on debt extinguishment
1,385
5,336
8,477
Add: Income tax (benefit) expense
(32,251)
231,574
53,102
Add: Uncertain stamp duty position
41,321
Add: Restructuring costs
2,300
Add: Losses on idled assets held for sale
4,846
771
2,732
Add: Gain on disposal of asset held for sale
(14,845)
Add: (Decrease) increase in provision for discounting
and credit losses
(4,216)
3,821
(8,042)
Adjusted EBITDA
381,713
1,215,624
486,133
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 our debt
 
facilities.
 
Our main uses of cash have historically been, and are expected to continue to be, the funding of our
 
operations,
working capital,
 
capital
 
expenditure,
 
debt
 
service
 
obligations,
 
business
 
or assets
 
acquisitions
 
and
 
payment
 
of
dividends. Based
 
on our
 
outlook for
 
the next
 
twelve months,
 
which is
 
subject to
 
completion of
 
the SGI
 
Transaction,
continued 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
 
ongoing
 
civil
 
unrest
 
and
 
wars,
 
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.
 
Under
 
the
 
Senior
 
Secured
 
Notes
 
Indenture,
 
upon
 
a
 
change
 
of
 
control,
 
we
 
are
 
required
 
to
 
make
 
an
 
offer
 
to
purchase the Notes from the holders at a
 
price of 101% of the principal amount thereof,
 
plus accrued and unpaid
interest.
 
Under the New ABL Facility,
 
a change of control constitutes a Review Event pursuant to which the Lenders may
request to meet
 
and consult with
 
us to agree
 
a strategy to
 
address the relevant
 
Review Event including
 
but not
limited to a restructure of the terms of the New ABL Facility
 
to the satisfaction of the Lenders.
 
Refer to Part II, Item 8. Financial Statements and Supplementary Data - Note 16. “Interest Bearing Liabilities” for
further information.
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
104
Liquidity as of December 31, 2023 and December 31,
 
2022 was as follows:
December 31,
(US$ in thousands)
2023
2022
Cash and cash equivalents, excluding restricted cash
339,043
334,378
Short-term deposits
21,906
Availability under the Predecessor ABL Facility
100,000
Availability under the New ABL Facility
(1)
128,094
Total
489,043
434,378
(1)
 
The New ABL Facility
 
provides for up
 
to $150.0 million
 
in borrowings, including
 
a $100.0 million
 
sublimit for the issuance
 
of letters of
 
credit,
of which $21.9 million has been issued, and $70.0 million sublimit as a revolving credit facility. The letter of credit sublimit contributes to our
liquidity as the Company can replace cash collateral, provided in the form of restricted deposits, with letters of credit allowing the release of
such restricted deposits to cash and cash equivalents.
Our total indebtedness as of December 31, 2023 and
 
December 31, 2022 consisted of the following:
(US$ in thousands)
2023
2022
Interest bearing liabilities, excluding current installments
242,326
242,326
Current installments of other financial liabilities and finance
 
lease obligations
2,893
4,585
Other financial liabilities and finance lease obligations, excluding current
installments
5,307
8,336
Total
250,526
255,247
Liquidity
As
 
of
 
December
 
31,
 
2023,
 
available
 
liquidity
 
was
 
$489.0
 
million,
 
comprising
 
of
 
cash
 
and
 
cash
 
equivalents
(excluding restricted cash)
 
of $339.0 million,
 
short-term deposits of $21.9
 
million and $128.1 million
 
of available
borrowings under our New 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 and cash equivalents
Cash
 
and
 
cash
 
equivalents
 
are
 
held
 
in
 
multicurrency
 
interest
 
bearing
 
bank
 
accounts
 
available
 
to
 
be
 
used
 
to
service
 
the
 
working
 
capital
 
needs
 
of
 
the
 
Company.
 
Cash
 
balances
 
surplus
 
to
 
immediate
 
working
 
capital
requirements
 
are
 
invested
 
in
 
short-term
 
interest-bearing
 
deposit
 
accounts
 
or
 
used
 
to
 
repay
 
interest
 
bearing
liabilities.
Senior Secured Notes
As
 
of
 
December
 
31,
 
2023,
 
the
 
outstanding
 
principal
 
amount
 
of
 
our
 
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
 
Senior
 
Secured
 
Notes
 
Indenture,
 
which
 
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
Senior Secured
 
Notes 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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
105
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.
Based on information that
 
we are currently aware
 
of, on completion of
 
the SGI Transaction, a “Change
 
of Control”
as defined under the Senior
 
Secured Notes Indenture may occur.
 
Refer to Part II, Item 8.
 
Financial Statements,
Note 16. “Interest Bearing Liabilities” for further information.
 
As of December 31, 2023, we were in compliance with all applicable covenants under the Senior Secured Notes
Indenture.
New ABL Facility
On May 8, 2023, we entered into
 
a senior secured asset-based revolving credit agreement in an
 
initial aggregate
amount of $150.0 million, or the New ABL Facility.
On August 3, 2023, the
 
Company satisfied all conditions
 
precedent under the New ABL
 
Facility,
 
at which time it
became effective and replaced the predecessor
 
ABL Facility.
 
The New
 
ABL Facility
 
matures in
 
August 2026
 
and provides
 
for up
 
to $150.0
 
million in
 
borrowings, including
 
a
$100.0 million sublimit for the issuance
 
of letters of credit and $70.0
 
million sublimit as a revolving
 
credit facility.
Availability under the New
 
ABL Facility is
 
limited to an
 
eligible borrowing base, determined
 
by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the New
 
ABL Facility bear interest
 
at a rate per
 
annum equal to applicable
 
rate of 2.80% and
BBSY,
 
for loans denominated in A$, or SOFR, for loans
 
denominated in US$, at the Borrower’s election.
 
Subject
 
to
 
customary
 
grace
 
periods
 
and
 
notice
 
requirements,
 
the
 
New
 
ABL
 
Facility
 
also
 
contains
 
customary
events of default.
Based on information that
 
we are currently aware
 
of, on completion of
 
the SGI Transaction, a “Change
 
of Control”
as defined
 
under the
 
terms of
 
the New
 
ABL Facility
 
may occur.
 
Refer to
 
Part II,
 
Item 8.
 
Financial Statements,
Note 16. “Interest Bearing Liabilities” for further information.
 
As at
 
December 31 2023,
 
letter of
 
credit sublimit had
 
been partially used
 
to issue $21.9
 
million of bank
 
guarantees
on behalf
 
of the
 
Company and no
 
amounts were drawn
 
under the
 
revolving credit sublimit
 
of the
 
New ABL Facility.
As at
 
December 31,
 
2023, the
 
Company was
 
in compliance
 
with all
 
applicable covenants
 
under the
 
New ABL
Facility.
Predecessor ABL Facility
On August 3, 2023, we satisfied all conditions precedent under the New ABL Facility at which time the New ABL
Facility replaced
 
the predecessor ABL
 
Facility. As a result
 
of the
 
early termination of
 
the predecessor ABL
 
Facility,
we
 
recorded
 
a
 
loss
 
on
 
debt
 
extinguishment
 
of
 
$1.4
 
million
 
in
 
our
 
Consolidated
 
Statement
 
of
 
Operations
 
and
Comprehensive Income for the year ended December
 
31, 2023.
Surety Bonds, Letters of Credit and Bank Guarantees
We
 
are
 
required
 
to
 
provide
 
financial
 
assurances
 
and
 
securities
 
to
 
satisfy
 
contractual
 
and
 
other
 
requirements
generated in the
 
normal course of
 
business. Some of
 
these assurances are provided
 
to comply with
 
state or other
government agencies’ statutes and regulations.
 
For
 
the
 
U.S.
 
Operations
 
in
 
order
 
to
 
provide
 
the
 
required
 
financial
 
assurance
 
for
 
post
 
mining
 
reclamation,
 
we
generally
 
use
 
surety
 
bonds.
 
We
 
use
 
surety
 
bonds
 
and
 
bank
 
letters
 
of
 
credit
 
to
 
collateralize
 
certain
 
other
obligations including contractual obligations under
 
workers’ compensation insurances. As of
 
December 31, 2023,
we had outstanding surety bonds of $44.0 million and letters of credit of $16.8 million issued from available bank
guarantees under the New ABL Facility.
 
For the Australian
 
Operations as
 
at December 31,
 
2023, we had
 
bank guarantees
 
outstanding of $24.4
 
million,
including $5.1 million issued from the New ABL Facility, primarily in respect of certain rail and port arrangements
of the Company.
 
As at December 31, 2023,
 
we, in aggregate, had total
 
outstanding bank guarantees provided
 
of $41.2 million to
secure obligations and commitments, including $21.9
 
million issued from the New ABL Facility.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
106
Future regulatory changes relating to the above obligations could result in
 
increased obligations, additional costs
or additional collateral requirements.
Restricted deposits – cash collateral
As required by certain agreements,
 
we had cash collateral in the form
 
of deposits in the amount of $68.7
 
million
and $89.1
 
million
 
as of
 
December
 
31,
 
2023
 
and
 
2022, respectively,
 
to
 
provide
 
back-to-back
 
support for
 
bank
guarantees,
 
financial
 
payments,
 
other
 
performance
 
obligations,
 
various
 
other
 
operating
 
agreements
 
and
contractual obligations
 
under workers
 
compensation insurance.
 
These deposits
 
are restricted
 
and classified
 
as
long-term assets in the Consolidated Balance Sheets.
In accordance
 
with the
 
terms of
 
the New
 
ABL Facility,
 
we may
 
be required
 
to cash
 
collateralize the
 
New 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, 2023, no such letter
 
of credit was outstanding after the expiration or termination date
 
and no
cash collateral was required.
Dividend
During the year ended December 31, 2023, we paid $16.7 million in dividends to stockholders or CDI holders on
the ASX,
 
net of $0.1
 
million foreign exchange
 
gain on payment
 
of dividends to
 
certain CDI holders
 
that elected
to be paid in Australian dollars.
On
 
February
 
19,
 
2024,
 
the
 
Company’s
 
Board
 
of
 
Directors
 
declared
 
a
 
bi-annual
 
fully
 
franked
 
fixed
 
ordinary
dividend of $8.4 million, or
 
0.5 cents per CDI. The
 
dividend will have a
 
record date of March
 
12, 2024, Australia
time, and
 
be payable
 
on April
 
4, 2024,
 
Australia time.
 
The total
 
ordinary dividend
 
will be
 
funded from
 
available
cash.
Capital Requirements
Our main uses of cash have historically been the funding
 
of our operations, working capital, capital expenditure,
the payment of
 
interest and dividends.
 
We intend
 
to use cash
 
to fund debt
 
service payments
 
on our Notes,
 
the
New 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.
Historical Cash Flows
 
The
 
following
 
table
 
summarizes
 
our
 
cash
 
flows
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2023,
 
2022
 
and
 
2021
 
as
reported in the accompanying Consolidated Financial Statements:
Cash Flow
For Year Ended December 31,
 
(US$ in thousands)
2023
2022
2021
Net cash provided by operating activities
268,282
926,643
442,014
Net cash used in investing activities
(238,168)
(208,343)
(134,332)
Net cash (used in) provided by financing activities
(24,679)
(784,251)
80,836
Net change in cash and cash equivalents
5,435
(65,951)
388,518
Effect of exchange rate changes on cash and cash
 
equivalents
(769)
(37,351)
3,677
Cash and cash equivalents at beginning of period
334,629
437,931
45,736
Cash and cash equivalents at end of period
339,295
334,629
437,931
Operating activities
Net cash provided
 
by operating activities
 
was $268.3 million
 
for the year ended
 
December 31, 2023,
 
compared
to $926.6
 
million
 
for the
 
year
 
ended
 
December
 
31,
 
2022.
 
The
 
decrease
 
in
 
cash
 
from
 
operating
 
activities
 
was
primarily driven by lower coal revenues,
 
higher operating costs and income tax
 
paid of $147.1 million during the
year.
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
107
Investing activities
Net cash
 
used in
 
investing
 
activities was
 
$238.2 million
 
for the
 
year
 
ended December
 
31, 2023,
 
compared
 
to
$208.3 million
 
for the
 
year ended
 
December 31,
 
2022. Cash
 
spent on
 
capital expenditures
 
for the
 
year ended
December
 
31,
 
2023,
 
was
 
$237.2
 
million,
 
of
 
which
 
$65.4
 
million
 
was
 
related
 
to
 
the
 
Australian
 
Operations
 
and
$171.2
 
million was related to the U.S. Operations.
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
 
deposits
 
were
 
provided
 
by
 
our
Australian Operations to satisfy contractual requirements
 
in the normal course of business.
Financing activities
Net cash used in financing activities was $24.7
 
million for the year ended December 31, 2023,
 
compared to cash
used
 
in
 
financing
 
activities
 
of
 
$784.3
 
million
 
for
 
the
 
year
 
ended
 
December
 
31,
 
2022.
 
The
 
net
 
cash
 
used
 
in
financing activities for the year ended December 31, 2023, largely related to dividend payments of $16.8 million,
payment of debt issuance costs in connection with the establishment
 
of the New ABL Facility of $3.4 million and
the remainder related to repayment of other financial liabilities.
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.
Contractual Obligations
The following is a summary of our contractual obligations
 
at December 31, 2023:
Payments Due By Year
Less than
1
 
3
3
 
5
More than
(US$ in thousands)
Total
1 Year
Years
Years
5 Years
Long
term debt obligations
(1)
9,172
3,466
5,706
Senior secured notes
(2)
242,326
242,326
Mineral lease commitments
(3)
53,075
5,795
10,703
10,415
26,162
Lease commitments
99,229
29,218
48,989
21,022
Unconditional purchase obligations
(4)
20,872
20,872
Take
or
pay contracts
(5)
788,431
94,688
187,326
189,295
317,122
Total
 
contractual cash obligations
1,213,105
154,039
495,050
220,732
343,284
(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 Note 16 “Interest
Bearing
 
Liabilities”
 
in
 
the
 
accompanying
 
audited
 
Consolidated
 
Financial
 
Statements
 
for
 
additional
discussion.
(3)
 
Represents
 
future
 
minimum
 
royalties
 
and
 
payments
 
under
 
mineral
 
leases.
 
Refer
 
to
 
Note
 
25
“Commitments”
in
 
the
 
accompanying
 
audited
 
Consolidated
 
Financial
 
Statements
 
for
 
additional
discussion.
(4)
 
Represents firm purchase commitments for
 
capital expenditures (based on order to
 
suppliers for capital
purchases) for 2024.
(5)
 
Represents various short- and long-term
 
take-or-pay arrangements in
 
Australia associated with rail and
port commitments for the delivery of coal.
This
 
table
 
does
 
not
 
include
 
our
 
estimated
 
Asset
 
Retirement
 
Obligations,
 
or
 
ARO.
 
As
 
discussed
 
in
 
“—Critical
Accounting
 
Policies
 
and
 
Estimates—Carrying
 
Value
 
of
 
Asset
 
Retirement
 
Obligations”
 
below,
 
the
 
current
 
and
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
108
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 $163.9 million as of
 
December 31, 2023.
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
Long-Lived Assets
We
 
review
 
the
 
carrying
 
value
 
of
 
long-lived
 
assets
 
to
 
be
 
used
 
in
 
operations
 
annually
 
or
 
whenever
 
events
 
or
changes
 
in
 
circumstances
 
indicate
 
that
 
the
 
carrying
 
amount
 
of
 
the
 
assets
 
or
 
asset
 
groups
 
might
 
not
 
be
recoverable.
 
Factors that would necessitate
 
an impairment assessment
 
include a significant adverse
 
change in the extent
 
or
manner in which an asset is
 
used, a significant adverse change in
 
legal factors or the business climate
 
that could
affect
 
the
 
value
 
of
 
the
 
asset
 
group
 
or
 
a significant
 
decline
 
in
 
the
 
observable
 
market
 
value
 
of
 
an
 
asset
 
group,
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,
 
2023,
 
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,
 
2023, 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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
109
points throughout
 
the current
 
and prior
 
year for
 
other purposes
 
to ensure
 
there is
 
no contrary
 
evidence to
 
our
analysis. At
 
December 31,
 
2023, we
 
did not
 
perform a
 
quantitative impairment
 
assessment as
 
we determined,
based on our qualitative assessment, that no impairment
 
indicators existed.
Carrying Value of Asset Retirement Obligations
The Company is required to maintain a liability
 
(and associated asset) for the expected value of future
 
retirement
obligations on their mines, in line with ASC 410, Asset
 
Retirement and Environmental Obligations.
Reclamation
 
of
 
areas
 
disturbed
 
by
 
mining
 
operations
 
must
 
be
 
performed
 
by
 
us
 
in
 
accordance
 
with
 
approved
reclamation plans and in compliance with state and federal laws in the states of West Virginia and Virginia
 
in the
U.S., and Queensland in Australia. For areas disturbed, a significant amount of the reclamation will take place in
the future, when
 
operations cease. There
 
were no assets
 
that were
 
legally restricted for
 
purposes of settling
 
asset
retirement obligations
 
as of
 
December 31,
 
2023. In
 
addition, state
 
agencies monitor
 
compliance with
 
the mine
plans, including reclamation.
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
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
110
 
future operating costs.
Each of these factors may in fact vary considerably from the
 
assumptions used in estimating reserves. For these
reasons,
 
estimates
 
of
 
the
 
economically
 
recoverable
 
quantities
 
of
 
coal
 
attributable
 
to
 
a
 
particular
 
group
 
of
properties, and classifications
 
of these reserves
 
based on the
 
risk of recovery
 
and estimates of
 
future net cash
flows,
 
may
 
vary
 
substantially.
 
Actual
 
production,
 
revenues
 
and
 
expenditures
 
with
 
respect
 
to
 
our
 
reserves
 
will
likely
 
vary
 
from
 
estimates,
 
and
 
these
 
variances
 
may
 
be
 
material.
 
See
 
Item 1A.
 
“Risk
 
Factors—We
 
rely
 
on
estimates of our
 
recoverable reserves,
 
which is complex
 
due to geological
 
characteristics of the
 
properties and
the number of assumptions made”
 
and Item 2. “Properties” for discussions
 
of the uncertainties in estimating
 
our
proven and probable coal reserves.
Taxes
We are required to
 
estimate the amount of
 
tax payable or
 
refundable for the
 
current year and the
 
deferred income
tax liabilities and assets
 
for the future tax consequences
 
of events that have
 
been reflected in our
 
Consolidated
Financial Statements
 
or tax
 
returns for
 
each taxing
 
jurisdiction in
 
which we
 
operate. This
 
process requires
 
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,
 
2023
 
111
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. Met
 
coal prices
 
were lower
 
in 2023
 
compared to
 
record highs
 
achieved
in 2022 from the impacts of the Russia and Ukraine war. The first half of 2023 saw Met coal index prices
 
decline
significantly as steel
 
demand weakened,
 
however,
 
Met coal prices
 
trended upwards
 
in the second
 
half of 2023
due to
 
tight supply
 
and port
 
constraints in
 
Australia. The
 
demand and
 
supply in
 
the Met
 
coal industry
 
changes
from time to time. There are no
 
assurances that oversupply will not occur,
 
that demand will not decrease or
 
that
overcapacity will not occur, which could cause
 
declines in the prices of
 
coal, which could have a
 
material adverse
effect on our financial condition and results
 
of operations
Access to
 
international markets
 
may be
 
subject to
 
ongoing interruptions
 
and trade
 
barriers due
 
to policies
 
and
tariffs
 
of
 
individual
 
countries.
 
We
 
may
 
or
 
may
 
not
 
be
 
able
 
to
 
access
 
alternate
 
markets
 
of
 
our
 
coal
 
should
interruptions
 
or
 
trade
 
barriers
 
occur
 
in
 
the
 
future.
 
An
 
inability
 
for
 
metallurgical
 
coal
 
suppliers
 
to
 
access
international markets would likely result
 
in an oversupply of Met coal and
 
may result in a decrease in prices
 
and
or the curtailment of production.
We manage
 
our commodity
 
price risk
 
for our non-trading,
 
thermal coal
 
sales through
 
the use
 
of long-term
 
coal
supply agreements in our
 
U.S. Operations. In Australia, thermal
 
coal is sold
 
to Stanwell on a
 
supply contract. See
Part I, Item 1A. “Risk Factors—Risks related to the Supply Deed with Stanwell may
 
adversely affect our financial
condition and results of operations.”
Sales commitments in the
 
Met coal market are typically
 
not long-term in nature, and
 
we are therefore subject
 
to
fluctuations in
 
market pricing.
 
Certain coal
 
sales are
 
provisionally priced
 
initially.
 
Provisionally priced
 
sales are
those for which price finalization,
 
referenced to the relevant index,
 
is outstanding at the reporting
 
date. The final
sales price
 
is determined
 
within 7
 
to 90
 
days after
 
delivery to
 
the customer.
 
As of
 
December 31,
 
2023, we had
$11.9
 
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 $1.2 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,
 
2023
 
112
Diesel Fuel
We may
 
be exposed
 
to price
 
risk in
 
relation to
 
other commodities
 
from time
 
to time
 
arising from
 
raw materials
used in
 
our operations
 
(such as
 
gas or
 
diesel). The
 
expectation of
 
future prices
 
for diesel
 
depends upon
 
many
factors
 
beyond
 
our
 
control.
 
The
 
current
 
Israel-Palestine
 
conflict
 
could
 
create
 
significant
 
uncertainty
 
regarding
interruptions to global oil supply causing significant
 
volatility in prices of related commodities,
 
including the price
of diesel fuel we
 
purchase. These commodities
 
may be hedged
 
through financial instruments
 
if the exposure
 
is
considered material and where the exposure cannot be
 
mitigated through fixed price supply agreements.
The fuel required for our operations in 2024 will be purchased
 
under fixed-price contracts or on a spot basis.
 
Interest Rate Risk
Interest rate risk is the risk that a change in interest rates
 
on our borrowing facilities will have an adverse impact
on
 
our
 
financial
 
performance,
 
investment
 
decisions
 
and
 
stockholder
 
return.
 
Our
 
objectives
 
in
 
managing
 
our
exposure
 
to
 
interest
 
rates
 
include
 
minimizing
 
interest
 
costs
 
in
 
the
 
long
 
term,
 
providing
 
a
 
reliable
 
estimate
 
of
interest costs for the
 
annual work program
 
and budget and ensuring
 
that changes in interest
 
rates will not have
a material impact on our financial performance.
As
 
of
 
December
 
31,
 
2023,
 
we
 
had
 
$250.5
 
million
 
of
 
fixed-rate
 
borrowings
 
and
 
no variable-rate
 
borrowings
outstanding.
 
We currently do not hedge against interest rate
 
fluctuations.
 
Foreign Exchange Risk
A significant portion of our
 
sales are denominated in US$.
 
Foreign exchange risk is
 
the risk that our earnings
 
or
cash flows are adversely impacted by movements in
 
exchange rates of currencies that are not in US$.
Our main exposure
 
is to the
 
A$-US$ exchange rate
 
through our Australian
 
Operations, which have
 
predominantly
A$
 
denominated
 
costs.
 
In
 
2023,
 
greater
 
than
 
70%
 
of
 
expenses
 
incurred
 
at
 
our
 
Australian
 
Operations
 
were
denominated in
 
A$. Approximately
 
30% 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 $122.8 million for the year ended December
 
31, 2023.
 
Under normal market conditions, we generally do not consider it necessary to hedge our
 
exposure to this foreign
exchange risk.
 
However,
 
there
 
may be
 
specific commercial
 
circumstances,
 
such
 
as the
 
hedging
 
of significant
capital
 
expenditure,
 
acquisitions,
 
disposals
 
and
 
other
 
financial
 
transactions,
 
where
 
we
 
may
 
deem
 
foreign
exchange hedging
 
as appropriate
 
and
 
where a
 
US$ contract
 
cannot
 
be negotiated
 
directly with
 
suppliers
 
and
other third parties.
 
For our Australian
 
Operations, we
 
translate all
 
monetary assets
 
and liabilities
 
at the period-end
 
exchange rate,
all non-monetary
 
assets and
 
liabilities
 
at historical
 
rates
 
and revenue
 
and expenses
 
at the
 
average exchange
rates in effect
 
during the periods. The
 
net effect of
 
these translation adjustments
 
is shown in the
 
accompanying
Consolidated Financial Statements within components
 
of net income.
We currently do not hedge our non-US$ exposures
 
against exchange rate fluctuations.
Credit Risk
Credit risk is the risk of
 
sustaining a financial loss
 
as a result of a counterparty
 
not meeting its obligations
 
under
a financial instrument or customer contract.
We are exposed
 
to credit risk
 
when we have financial
 
derivatives, cash deposits,
 
lines of credit, letters
 
of credit
or bank guarantees
 
in place with
 
financial institutions.
To
mitigate against credit risk
 
from financial counterparties,
we have minimum credit rating requirements with financial
 
institutions where we transact.
We
 
are
 
also
 
exposed
 
to
 
counterparty
 
credit
 
risk
 
arising
 
from
 
our
 
operating
 
activities,
 
primarily
 
from
 
trade
receivables. Customers who wish to trade
 
on credit terms are subject to credit
 
verification procedures, including
an assessment of their independent credit rating, financial position, past experience and industry reputation.
 
We
monitor the financial performance
 
of counterparties on a routine
 
basis to ensure credit
 
thresholds are achieved.
Where required, we will request additional credit
 
support, such as letters of credit,
 
to mitigate against credit risk.
Credit
 
risk
 
is
 
monitored
 
regularly,
 
and
 
performance
 
reports
 
are
 
provided
 
to
 
our
 
management
 
and
 
Board
 
of
Directors.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
113
As of December
 
31, 2023,
 
we had financial
 
assets of
 
$694.7 million, comprising
 
of cash and
 
cash equivalents,
trade
 
receivables,
 
short
 
term
 
deposits
 
and
 
restricted
 
deposits,
 
which
 
are
 
exposed
 
to
 
counterparty
 
credit
 
risk.
These
 
financial
 
assets
 
have
 
been
 
assessed
 
under
 
ASC
 
326,
 
Financial
 
Instruments
 
 
Credit
 
Losses,
 
and
 
a
provision for
 
discounting and
 
credit losses
 
of $0.9 million
 
was recorded
 
as of
 
December 31,
 
2023. See
 
Item 8.
Financial Statements and Supplementary Data—Note
 
8. Provision for Discounting and Credit Losses.
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
114
ITEM 8. FINANCIAL STATEMENTS
 
AND SUPPLEMENTARY
 
DATA
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Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
115
Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
December 31,
2023
December 31,
2022
Current assets:
Cash and cash equivalents
 
$
339,295
$
334,629
Trade receivables, net
7
 
263,951
409,979
Income tax receivable
22
 
44,906
Inventories
9
 
192,279
158,018
Other current assets
10
 
103,609
60,188
Assets held for sale
4
 
26,214
Total
 
current assets
 
944,040
989,028
Non-current assets:
Property, plant and
 
equipment, net
11
 
1,506,437
1,389,548
Right of use asset – operating leases, net
14
 
80,899
17,385
Goodwill
12
 
28,008
28,008
Intangible assets, net
12
 
3,108
3,311
Restricted deposits
26
 
68,660
89,062
Deferred income tax assets
22
 
27,230
Other non-current assets
10
 
19,656
33,585
Total
 
assets
 
$
2,678,038
$
2,549,927
Liabilities and Stockholders’ Equity
Current liabilities:
 
Accounts payable
 
$
113,273
$
61,780
Accrued expenses and other current liabilities
13
 
312,705
343,691
Income tax payable
22
 
119,981
Asset retirement obligations
15
 
15,321
10,646
Contract obligations
17
 
40,722
40,343
Lease liabilities
14
 
22,879
7,720
Other current financial liabilities
 
2,825
4,458
Liabilities held for sale
4
 
12,241
Total
 
current liabilities
 
507,725
600,860
Non-current liabilities:
Asset retirement obligations
15
 
148,608
127,844
Contract obligations
17
 
61,192
94,525
Deferred consideration liability
18
 
277,442
243,191
Interest bearing liabilities
16
 
235,343
232,953
Other financial liabilities
 
5,307
8,268
Lease liabilities
14
 
61,692
15,573
Deferred income tax liabilities
22
 
100,145
95,671
Other non-current liabilities
 
34,549
27,952
Total
 
liabilities
 
$
1,432,003
$
1,446,837
Common stock $
0.01
 
par value;
1,000,000,000
 
shares authorized,
167,645,373
 
shares issued and outstanding as of December 31, 2023 and
December 31, 2022
 
1,677
1,677
Series A Preferred stock $
0.01
 
par value;
100,000,000
 
shares authorized,
1
Share issued and outstanding as of December 31, 2023 and
 
December 31,
2022
Additional paid-in capital
 
1,094,431
1,092,282
Accumulated other comprehensive losses
24
 
(89,927)
(91,423)
Retained earnings
 
239,854
100,554
Total
 
stockholders’ equity
 
1,246,035
1,103,090
Total
 
liabilities and stockholders’ equity
 
$
2,678,038
$
2,549,927
See accompanying notes to consolidated financial
 
statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
116
Consolidated Statements of Operations and Comprehensive
 
Income
(In US$ thousands, except share data)
 
Year ended December 31,
Note
2023
2022
2021
Revenues:
Coal revenues
$
2,830,689
$
3,527,626
$
2,010,996
Coal revenues from related parties
27
97,335
Other revenues
59,914
43,916
40,140
Total
 
revenues
3
2,890,603
3,571,542
2,148,471
Costs and expenses:
Cost of coal revenues (exclusive of items shown
separately below)
1,731,630
1,515,585
1,195,250
Depreciation, depletion and amortization
160,711
167,046
177,875
Freight expenses
259,710
249,081
241,862
Stanwell rebate
136,523
165,995
55,403
Other royalties
345,882
385,065
142,751
Selling, general, and administrative expenses
 
84,177
42,499
30,666
Restructuring costs
2,300
Total
 
costs and expenses
2,718,633
2,525,271
1,846,107
Other income (expenses):
Interest expense, net
(56,751)
(67,632)
(68,062)
Loss on debt extinguishment
(1,385)
(5,336)
(8,477)
Decrease (increase) in provision for discounting and
credit losses
 
4,216
(3,821)
8,042
Gain on disposal of asset held for sale
14,845
Other, net
5
5,764
33,795
(6,187)
Total
 
other expense, net
(48,156)
(42,994)
(59,839)
Income before tax
123,814
1,003,277
242,525
Income tax benefit (expense)
22
32,251
(231,574)
(53,102)
Net income
156,065
771,703
189,423
Less: Net loss attributable to noncontrolling
interest
(2)
Net income attributable to Coronado Global
Resources Inc.
$
156,065
$
771,703
$
189,425
Other comprehensive loss, net of income taxes:
Foreign currency translation adjustment
1,496
(47,195)
(17,451)
Net gain on cash flow hedges, net of tax
2,029
Total
 
other comprehensive gain (loss)
1,496
(47,195)
(15,422)
Total
 
comprehensive income
157,561
724,508
174,001
Less: Net loss attributable to noncontrolling
interest
(2)
Total
 
comprehensive income attributable to
Coronado Global Resources Inc.
 
$
157,561
$
724,508
$
174,003
Earnings per share of common stock
Basic
6 (c)
 
0.93
4.60
1.21
Diluted
6 (c)
 
0.93
4.60
1.21
See accompanying notes to consolidated financial
 
statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
117
Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
paid in
capital
Accumulated
other
comprehensive
losses
(Accumulated
losses)
Retained
earnings
Noncontrolling
interest
Total
stockholders'
equity
Shares
Amount
Series A
Amount
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 loss (net of $
870
deferred income tax)
(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
Net income
156,065
156,065
Other comprehensive income
1,496
1,496
Total comprehensive income
1,496
156,065
157,561
Stock-based compensation for equity
classified awards
2,149
2,149
Dividends
(16,765)
(16,765)
Balance December 31, 2023
167,645,373
$
1,677
1
$
$
1,094,431
$
(89,927)
$
239,854
$
$
1,246,035
See accompanying notes to consolidated financial
 
statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
118
Consolidated Statements of Cash Flows
(In US$ thousands)
Year Ended December 31,
2023
2022
2021
Cash flows from operating activities:
Net income
$
156,065
$
771,703
$
189,423
Adjustments to reconcile net income to cash and
 
cash equivalents provided
by operating activities:
Depreciation, depletion and amortization
163,862
165,503
175,814
Amortization of right of use asset - operating leases
12,415
6,704
8,899
Amortization of deferred financing costs
4,300
1,933
3,133
Non-cash interest expense
30,997
31,362
29,120
Amortization of contract obligations
(33,026)
(36,519)
(33,967)
Loss on disposal of property, plant and equipment
516
855
415
Equity-based compensation expense (gain)
2,149
2,735
(250)
Loss on debt extinguishment
1,385
5,336
8,477
Deferred income taxes
(21,338)
40,423
24,417
Reclamation of asset retirement obligations
(5,334)
(4,543)
(4,273)
Change in estimate of asset retirement obligation
(3,151)
1,543
2,061
Gain on disposal of asset held for sale
(14,845)
(Decrease) increase in provision for discounting and
 
credit losses
(4,216)
3,821
(8,042)
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables,
 
net
155,056
(156,818)
(33,545)
Inventories
(32,774)
(41,243)
(9,637)
Other current assets
(477)
(12,365)
24,573
Accounts payable
40,159
(27,664)
24,166
Accrued expenses and other current liabilities
(25,435)
84,041
64,285
Operating lease liabilities
(14,597)
(8,244)
(10,986)
Income tax payable
(164,834)
96,326
Change in other liabilities
6,560
1,754
2,776
Net cash provided by operating activities
268,282
926,643
442,014
Cash flows from investing activities:
Capital expenditures
(237,205)
(199,716)
(89,661)
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 and other deposits
(27,213)
(9,761)
(103,997)
Redemption of restricted and other deposits
26,250
816
30,281
Net cash used in investing activities
(238,168)
(208,343)
(134,332)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other
 
financial liabilities
411,524
Debt issuance costs and other financing costs
(3,436)
(15,263)
Principal payments on interest bearing liabilities
 
and other financial liabilities
(4,361)
(81,310)
(412,046)
Call premiums paid on early redemption of debt
(2,557)
(1,050)
Principal payments on finance lease obligations
(127)
(140)
(70)
Dividends paid
(16,755)
(700,244)
Proceeds from stock issuance, net
97,741
Net cash (used in) provided by financing activities
(24,679)
(784,251)
80,836
Net increase (decrease) in cash and cash equivalents
5,435
(65,951)
388,518
Effect of exchange rate changes on cash and cash equivalents
(769)
(37,351)
3,677
Cash and cash equivalents at beginning of period
334,629
437,931
45,736
Cash and cash equivalents at end of period
$
339,295
$
334,629
$
437,931
Supplemental disclosure of cash flow information:
Cash payments for interest
$
28,632
$
36,728
$
33,462
Cash paid (refund) for taxes
$
147,106
$
90,888
$
(16,582)
Restricted cash
$
251
$
251
$
251
See accompanying notes to consolidated financial
 
statements
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
119
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 6 “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
 
the
 
Company’s
future operating results, purchase or investment opportunities
 
in the coal mining industry.
Concentration of customers
The Company has a credit
 
policy that establishes procedures
 
to determine creditworthiness
 
and credit limits for
trade customers and counterparties
 
in the over-the-counter coal
 
market. Generally,
 
credit is extended based on
an evaluation
 
of the customer’s
 
financial condition.
 
Collateral is
 
not generally
 
required, unless
 
credit cannot
 
be
established.
 
Payments from customers are generally due between
 
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 coal revenues in the year ended
 
December 31, 2023.
 
 
 
 
Year Ended December 31,
2023
2022
2021
Tata
 
Steel
21%
19%
17%
ArcelorMittal
10%
8%
7%
For the
 
year ended
 
December 31,
 
2023, $
1,509.1
 
million, or
53.3
% of
 
total coal
 
revenues, were
 
attributable to
five
 
customers. In
 
comparison, for
 
the year
 
ended December
 
31, 2022,
 
$
1,848.8
 
million, or
52.6
% of
 
total coal
revenues were
 
attributable to
five
 
customers and for
 
the year ended
 
December 31, 2021,
 
$
971.6
 
million, or
46.3
%
of
 
total
 
revenues
 
were
 
attributable
 
to
five
 
customers.
 
As
 
of
 
December
 
31,
 
2023,
 
the
 
Company
 
had
three
customers that
 
accounted for
 
$
152.9
 
million, or
57.9
%, of
 
accounts receivable.
 
As of
 
December 31,
 
2022, the
Company had
four
 
customers that accounted for $
212.5
 
million, or
51.6
%, of accounts receivable.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
120
The
 
following
 
table
 
presents
 
revenues
 
as
 
a
 
percent
 
of
 
total
 
revenue
 
from
 
external
 
customers
 
by
 
geographic
region:
 
 
 
 
Year Ended December 31,
2023
2022
2021
Asia
50%
46%
48%
North America
11%
12%
7%
South America
8%
8%
6%
Europe
6%
11%
12%
Australia
4%
4%
6%
Brokered sales
21%
19%
21%
Total
100%
100%
100%
The Company uses shipping destination as the
 
basis for attributing revenue to individual
 
countries. The transfer
of title on
 
brokered transactions
 
may occur at
 
a point that
 
does not reflect
 
the end usage
 
point, therefore
 
these
sales are reflected as exports and classified as brokerage sales.
Concentration of labor
Out
 
of
 
the
 
Company’s
 
total
 
employees,
10.8
%
 
as
 
of
 
December
 
31,
 
2023,
are
 
subject
 
to
 
the
 
Curragh
 
Mine
Enterprise
 
Agreement
 
2023.
 
This
 
agreement
 
covers
 
work
 
carried out
 
by permanent,
 
full-time,
 
temporary,
 
and
casual coal
 
mining employees
 
engaged by
 
Curragh to
 
fulfil production,
 
maintenance and
 
processing activities.
Other than
 
the Curragh
 
Mine Enterprise
 
Agreement 2023,
 
there are
 
no other
 
collective bargaining
 
agreements
or union contracts covering employees of the Company
 
.
Transportation
The Company depends
 
upon port and
 
rail transportation
 
systems to deliver
 
coal to
 
its customers.
 
Disruption of
these
 
transportation
 
services
 
due
 
to
 
weather-related
 
problems,
 
mechanical
 
difficulties,
 
strikes,
 
lockouts,
bottlenecks, and other
 
events could temporarily
 
impair the Company’s
 
ability to supply
 
coal to its
 
customers. In
the past, disruptions in these services have resulted in
 
delayed shipments and production interruptions.
2.
 
Summary of Significant Accounting Policies
(a)
 
Newly Adopted Accounting Standards
During the period,
 
there have
 
been no new
 
Accounting Standards
 
Updates issued
 
by the Financial
 
Accounting
Standards Board, or FASB,
 
that had a material impact on the Company’s Consolidated
 
Financial Statements.
 
(b)
 
Accounting Standards Not Yet
 
Implemented
Accounting Standards
 
Update, or
 
ASU, No. 2023-07
 
“Segment Reporting”
 
(Topic
 
280)
: In November
 
2023, the
FASB
 
issued
 
ASU
 
2023-07,
 
which
 
intended
 
to
 
improve
 
reportable
 
segment
 
disclosure
 
requirements
 
through
enhanced disclosures of significant segment expenses. The guidance is effective for fiscal years
 
beginning after
December 15, 2023,
 
and interim periods
 
within fiscal years
 
beginning after December
 
31, 2024. Early
 
adoption
is permitted. The
 
updated standard is
 
to be applied
 
retrospectively to all
 
prior periods presented
 
in the financial
statements. The
 
Company is
 
currently evaluating
 
the impact
 
that the updated
 
standard will
 
have in its
 
financial
statement disclosures.
 
ASU 2023-09
 
“Income Taxes”
 
(Topic
 
740):
 
In December
 
2023, the
 
FASB
 
issued 2023-09,
 
which modifies
 
the
rules on
 
income tax
 
disclosures to
 
require companies
 
to disclose:
 
specific categories
 
in the
 
rate reconciliation,
the income
 
or loss
 
from continuing
 
operations before income
 
tax expense
 
or benefit
 
(separated between
 
domestic
and
 
foreign)
 
and
 
income
 
tax
 
expense
 
or
 
benefit
 
from
 
continuing
 
operations
 
(separated
 
by
 
federal,
 
state,
 
and
foreign). The updated standard is
 
effective for annual periods beginning after December
 
15, 2024. The Company
is currently evaluating the impact that the updated standard
 
will have in its financial statement disclosures.
 
There have been
 
no other recent
 
accounting pronouncements not yet
 
effective that have significance,
 
or potential
significance, to the Company’s Consolidated Financial
 
Statements.
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
121
(c) Use of Estimates
The preparation
 
of Consolidated
 
Financial
 
Statements
 
in conformity
 
with U.S. GAAP
 
requires
 
management
 
to
make certain
 
judgements, estimates
 
and assumptions
 
that affect
 
the reported
 
amounts of
 
assets and
 
liabilities
and disclosure of
 
contingent assets and contingent
 
liabilities at the
 
date of the
 
Consolidated Financial Statements
and
 
the
 
reported
 
amounts
 
of
 
revenues
 
and
 
expenses
 
during
 
the
 
reporting
 
periods.
 
Actual
 
results
 
could
 
differ
materially
 
from
 
those
 
estimates.
 
Significant
 
items
 
subject
 
to
 
such
 
estimates
 
and
 
assumptions
 
include
 
asset
retirement obligations; useful lives for depreciation,
 
depletion and amortization; expected credit
 
losses; deferred
income tax
 
assets and
 
liabilities; values
 
of coal
 
properties;
 
goodwill; workers’
 
compensation
 
liability and
 
other
contingencies.
(d)
 
Foreign Currency
Financial Statements of foreign operations
The reporting currency of the Company is the U.S. Dollar,
 
or US$.
Functional
 
currency
 
is
 
determined
 
by
 
the
 
primary
 
economic
 
environment
 
in
 
which
 
an
 
entity
 
operates.
 
The
functional currency of
 
the Company
 
and its subsidiaries
 
is the US$,
 
with the exception
 
of two foreign
 
operating
subsidiaries, 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
 
$
2.5
 
million, $
47.6
 
million and
 
$
1.7
 
million for
 
the years
 
ended
December 31,
 
2023,
 
2022 and
 
2021, 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
 
loss of
 
$
1.0
 
million, net
 
gain of
 
$
15.0
million and $
8.7
 
million for the years ended December 31, 2023, 2022
 
and 2021, respectively.
(e)
 
Cash and Cash Equivalents
Cash and cash
 
equivalents include cash
 
at bank and
 
short-term highly liquid investments
 
with an original
 
maturity
date of three months or less. At December 31, 2023,
 
the Company had $
130.0
 
million of short-term highly liquid
investments classified as cash equivalents. At December
 
31, 2022, the Company had
no
 
cash equivalents.
 
“Cash
 
and
 
cash
 
equivalents”,
 
as disclosed
 
in
 
the
 
accompanying
 
Consolidated
 
Balance
 
Sheets,
 
includes
 
$
0.3
million of restricted cash at December 31, 2023 and
 
2022.
(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.
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
122
The amount of credit
 
loss is recognized in
 
the Consolidated Statements
 
of Operations and Other Comprehensive
Income within “Provision for discounting and credit losses”. The Company writes off a financial asset when there
is information indicating there is no realistic prospect of recovery of the asset from the counterparty. Subsequent
recoveries of amounts
 
previously written off
 
are credited against “Provision
 
for discounting and
 
credit losses” in
the Consolidated Statements of Operations and Other
 
Comprehensive Income.
(g)
 
Inventories
Coal is recorded
 
as inventory at the
 
point in time
 
the coal is
 
extracted from the
 
mine. Raw coal
 
represents coal
stockpiles that
 
may be
 
sold in
 
current condition
 
or may
 
be further
 
processed
 
prior to
 
shipment to
 
a customer.
Saleable coal represents coal stockpiles which require no further
 
processing prior to shipment to a customer.
Coal inventories are stated
 
at the lower of average
 
cost and net realizable
 
value. The cost of coal
 
inventories is
determined based
 
on an
 
average cost
 
of production,
 
which includes
 
all costs
 
incurred to
 
extract, transport
 
and
process
 
the coal.
 
Net
 
realizable
 
value
 
considers
 
the
 
estimated
 
sales
 
price
 
of
 
the
 
particular
 
coal
 
product,
 
less
applicable selling costs, and, in the case of raw coal, estimated
 
remaining processing costs.
Supplies
 
inventory
 
is
 
comprised
 
of
 
replacement
 
parts
 
for
 
operational
 
equipment
 
and
 
other
 
miscellaneous
materials and supplies
 
required for mining
 
which are stated
 
at cost on the
 
date of purchase.
 
Supplies inventory
is valued at
 
the lower of
 
average cost or
 
net realizable
 
value, less a
 
reserve for obsolete
 
or surplus items.
 
This
reserve incorporates several factors, such as anticipated usage, inventory turnover and inventory levels. It is not
customary to sell these inventories; the Company plans
 
to use them in mining operations as needed.
(h)
 
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.
 
All criteria
must be met at or prior to balance sheet date for a long-lived asset to qualify as held for
 
sale. 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.
 
When any
 
of the
 
criteria are
 
not met
 
after initial
classification, the Company ceases to classify the asset as held for sale and reclassify the asset as held for use.
On reclassification, the asset is measured
 
at the lower of its (a) carrying
 
amount before it was classified
 
as held
for sale, adjusted
 
for any depreciation
 
expense or impairment
 
losses that would
 
have been recognized
 
had the
asset been continuously classified as held and used or
 
(b) fair value at the date of reclassification.
(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
 
to
10
 
years for machinery, mining
 
equipment
and
 
transportation
 
vehicles,
5
 
to
10
 
years
 
for
 
office
 
equipment,
 
and
10
 
to
20
 
years
 
for
 
plant,
 
buildings
 
and
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,
 
2023
 
123
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.
 
The
 
Company
 
concluded
 
that
no
 
impairment
 
charges
 
were
 
required
 
at
 
any
 
of
 
the
Company’s mining assets for the years ended December
 
31, 2023, 2022 and 2021.
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
 
million. Goodwill
 
is not
amortized but
 
is reviewed
 
for impairment
 
annually or
 
when circumstances or
 
other events
 
indicate that
 
impairment
may have occurred. The Company follows the guidance in Accounting Standards Update 2017-04 “
Intangibles –
Goodwill
 
and
 
Other:
 
Simplifying
 
the
 
Test
 
for
 
Goodwill
 
Impairment
 
(ASU 2017-04).
 
The
 
Company
 
makes
 
a
qualitative assessment of whether it
 
is more likely than
 
not that a
 
reporting unit’s fair value is
 
less than its carrying
amount. Circumstances that are considered as
 
part of the qualitative
 
assessment and could trigger a
 
quantitative
impairment test include but are
 
not limited to: a significant
 
adverse change in the business
 
climate; a significant
adverse legal judgment;
 
adverse cash flow
 
trends; an
 
adverse action
 
or assessment
 
by a government
 
agency;
unanticipated
 
competition;
 
and
 
a
 
significant
 
restructuring
 
charge
 
within
 
a
 
reporting
 
unit.
 
If
 
a
 
quantitative
assessment
 
is
 
determined
 
to
 
be
 
necessary,
 
the
 
Company
 
compares
 
the
 
fair
 
value
 
of
 
a
 
reporting
 
unit
 
with
 
its
carrying amount, including goodwill.
 
If the carrying amount
 
of a reporting unit
 
exceeds its fair value,
 
the Company
recognizes an impairment
 
charge for the
 
amount by which
 
the carrying amount
 
exceeds its fair
 
value to the
 
extent
of the amount of goodwill allocated to that reporting unit.
The Company defines reporting
 
units at the mining
 
asset level. For purposes
 
of testing goodwill for
 
impairment,
goodwill has been allocated to the reporting units to the
 
extent it relates to each reporting unit.
(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
 
interest capitalized during the years ended December
 
31, 2023 and 2022.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
124
(l)
 
Leases
From time to
 
time, the Company
 
enters into contractual
 
agreements to
 
lease property,
 
plant and equipment.
 
In
addition, the Company also enters into mining services contracts which may include embedded leases of mining
equipment. Based
 
upon the
 
Company’s assessment
 
of the
 
terms of
 
a specific
 
lease agreement,
 
the Company
classifies a lease as either finance or operating.
Finance leases
Right of Use,
 
or ROU,
 
assets related
 
to finance
 
leases are
 
presented in
 
Property,
 
plant and
 
equipment, net
 
on
the Consolidated
 
Balance 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
 
$
8.9
 
million
 
and
 
$
6.8
 
million
respectively, included
 
in “Other current assets” as of December 31, 2023
 
and 2022.
(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,
 
2023
 
125
(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
 
unsatisfied
 
and/or
 
partially
 
satisfied
performance obligations at December 31, 2023 and 2022.
Shipping and Handling
The Company
 
accounts
 
for
 
shipping
 
and
 
handling
 
activities
 
on
 
Free
 
on
 
Rail
 
sales
 
after
 
the
 
customer
 
obtains
control of the good. In this instance,
 
shipping and handling costs
 
paid to third party carriers and
 
invoiced to coal
customers are recorded as freight expense and other revenues, respectively.
(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
 
.
 
enter into derivative financial instruments to hedge exposures to fuel
 
price fluctuations.
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
126
There are
no
 
derivative contracts outstanding December 31, 2023 and
 
2022.
(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 categorized
 
in one of 3 levels of inputs.
Refer to Note 23 “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
 
derivative contracts outstanding at December 31, 2023
 
and 2022.
(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 CDI to common share ratio).
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.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
127
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
 
21 “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
 
16
“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
 
100%-owned
 
producing
 
mine
complexes
 
(Buchanan
 
and
 
Logan),
one
 
100%-owned
 
idled
 
mine
 
complex
 
(Greenbrier)
 
and
two
 
development
properties (Mon Valley
 
and Russell County).
 
The
 
Company
 
operates
 
its
 
business
 
along
two
 
reportable
 
segments:
 
Australia
 
and
 
United
 
States.
 
The
organization of the
two
 
reportable segments reflects how Coronado’s chief
 
operating decision maker, or
 
CODM,
manages and allocates resources to the various components
 
of the Company’s business.
 
The CODM
 
uses Adjusted
 
EBITDA as
 
the primary
 
metric to
 
measure each
 
segment’s
 
operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP.
 
Investors should be
aware that
 
the Company’s
 
presentation of
 
Adjusted EBITDA
 
may not
 
be comparable
 
to similarly
 
titled financial
measures used by other companies.
 
Adjusted EBITDA is
 
defined as earnings
 
before interest, taxes,
 
depreciation, depletion and
 
amortization and other
foreign exchange losses. Adjusted EBITDA is
 
also adjusted for certain discrete items that
 
management exclude
in analyzing each
 
of the
 
Company’s segments’ operating performance.
 
“Other and corporate”
 
relates to additional
financial information for the
 
corporate function such as financial reporting and accounting,
 
treasury, legal, human
resources, compliance,
 
and tax.
 
As such, the
 
corporate function
 
is not determined
 
to be
 
a reportable segment
but is discretely disclosed for purposes of reconciliation to the
 
Company’s Consolidated Financial Statements.
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
128
Reportable segment results for the years ended December 31,
 
2023, 2022 and 2021 are presented below:
 
 
 
 
 
(US$ thousands)
Australia
United
States
Other and
Corporate
Total
Year ended December 31,
 
2023
Total
 
revenues
$
1,681,522
$
1,209,081
$
$
2,890,603
Adjusted EBITDA
2,249
421,093
(41,629)
381,713
Total
 
assets
1,322,610
1,010,199
345,229
2,678,038
Capital expenditures
55,412
171,686
660
227,758
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
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
Total
 
assets
1,357,132
822,222
282,058
2,461,412
Capital expenditures
38,733
50,787
1,616
91,136
The reconciliation of Adjusted EBITDA to net income attributable to the Company for
 
the years ended December
31, 2023, 2022 and 2021 are as follows:
 
 
 
 
 
 
 
 
Year Ended December 31,
(US$ thousands)
2023
2022
2021
Net income
$
156,065
$
771,703
$
189,423
Depreciation, depletion and amortization
160,711
167,046
177,875
Interest expense, net
(1)
56,751
67,632
68,062
Income tax (benefit) expense
(32,251)
231,574
53,102
Other foreign exchange (gains) losses
(2)
(2,899)
(32,259)
7,049
Loss on debt extinguishment
1,385
5,336
8,477
Uncertain stamp duty position
(3)
41,321
Restructuring costs
2,300
Losses on idled assets
(4)
4,846
771
2,732
Gain on disposal of assets held for sale
(14,845)
(Decrease) increase in provision for discounting
 
and credit losses
(4,216)
3,821
(8,042)
Consolidated adjusted EBITDA
$
381,713
$
1,215,624
$
486,133
(1)
Includes interest income of $
7.6
 
million, $
1.5
 
million, and $
0.1
 
million for the years ended December 31, 2023,
2022, 2021, respectively.
(2)
Refer to Note 5 “Other, net”
 
for further discussion.
(3)
 
Relates to stamp duty on Curragh’s acquisition.
 
Refer to Note 26 “Contingencies” for further discussion.
 
(4)
These losses
 
relate to idled
 
non-core assets
 
that the Company
 
has an
 
active plan
 
to sell. Prior
 
to March
 
31,
2023, the Company had idled assets that were classified as
 
held for sale.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
129
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, 2023,
 
2022 and
2021 are as follows:
 
 
 
 
 
 
 
 
Year Ended December 31,
(US$ thousands)
2023
2022
2021
Capital expenditures per Consolidated Statement of Cash
flows
$
237,205
$
199,716
$
89,661
Payment for capital acquired in prior period
(11,243)
(7,475)
(6,000)
Accruals for capital expenditures
10,790
11,243
7,475
Advance payment to acquire long lead capital items
(8,994)
(18,127)
Capital expenditures per segment detail
$
227,758
$
185,357
$
91,136
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, 2023
(US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,557,471
$
1,031,012
$
2,588,483
Thermal coal
88,281
153,925
242,206
Total
 
coal revenue
1,645,752
1,184,937
2,830,689
Other
(1)
35,770
24,144
59,914
Total
$
1,681,522
$
1,209,081
$
2,890,603
 
 
 
 
 
 
 
 
 
 
 
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
(1)
Included
 
in
 
Other
 
revenue
 
for
 
Australian
 
Operation
 
is
 
the
 
amortization
 
of
 
Stanwell
 
non-market
 
coal
 
supply
agreement liability recognized
 
on acquisition
 
of Curragh. See
 
further discussion in
 
Note 17
 
“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,
 
2023
 
130
 
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
 
mining asset, or
 
the
Greenbrier asset, and determined that all of
 
the criteria to classify assets and liabilities as
 
held for sale were met.
The Greenbrier asset is part
 
of the Company’s U.S. segment, located
 
in the State of
 
Virginia in the United States.
The Greenbrier asset does not form part
 
of the Company’s core business
 
strategy and has been idle since April
1, 2020.
The
 
Company
 
remains
 
committed
 
to
 
a
 
plan
 
to
 
sell
 
the
 
Greenbrier
 
asset,
 
however,
 
on
 
March
 
31,
 
2023,
 
the
Company concluded that
 
the timing
 
of the
 
sale within the
 
next twelve months
 
is uncertain. As
 
such, the
 
Greenbrier
mining asset
 
has been
 
classified
 
as held
 
and
 
used since
 
March
 
31, 2023,
 
as it
 
does not
 
meet
 
the criteria
 
for
classification as held for sale.
 
The assets and liabilities
 
of the Greenbrier asset
 
met the criteria for
 
classification as held for
 
sale as of December
31, 2022,
 
therefore
 
the Consolidated
 
Balance Sheet
 
continues to
 
reflect these
 
asset
 
and liabilities
 
as held
 
for
sale as of that date.
 
5.
 
Other, net
Other, net consists of the following:
 
 
 
 
 
 
 
 
Year Ended December 31,
 
(US$ thousands)
2023
2022
2021
Other foreign exchange gains (losses)
(1)
$
2,899
$
32,259
$
(7,049)
Other income
2,865
1,536
862
Total
 
Other, net
$
5,764
$
33,795
$
(6,187)
(1)
 
Other foreign
 
exchange gains
 
(losses) primarily
 
relates to
 
gains and
 
losses recognized
 
on the
 
translation of
short-term
 
inter-entity
 
balances
 
between
 
certain
 
entities
 
within
 
the
 
Group
 
that
 
are
 
denominated
 
in
 
currencies
other than their respective functional currencies.
6.
 
Capital Structure
(a)
 
Stockholders’ Equity
Authorized capital stock
The Company’s Certificate of Incorporation, as amended, authorize the Company to
 
issue
1,100,000,000
 
shares
of $
0.01
 
par value capital stock consisting of
1,000,000,000
 
shares of common stock and
100,000,000
 
shares of
preferred stock.
Common Stock / CDIs
The following table summarizes Common Stock activity
 
during the periods presented below:
 
 
 
 
 
 
 
 
Year Ended December 31,
 
2023
2022
2021
Shares outstanding at the beginning of the year
167,645,373
167,645,373
138,387,890
Shares issued during the year
-
-
29,257,483
Shares outstanding at the end of the year
167,645,373
167,645,373
167,645,373
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
131
A portion of the
 
Company’s common
 
stock is publicly
 
traded on the ASX
 
under the ticker
 
“CRN,” in the
 
form of
CHESS Depositary Interests (“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
 
vote for every
10
 
CDIs they
hold. CDI
 
holders
 
are to
 
receive
 
entitlements
 
which attach
 
to underlying
 
shares
 
such as
 
participation
 
in rights
issues, bonus issues, capital reductions and liquidation preferences.
The CDIs entitle
 
holders to dividends,
 
if any, and other rights
 
economically equivalent to
 
shares of common
 
stock,
including the right
 
to attend stockholders’
 
meetings. CDN, as
 
the stockholder of
 
record, will vote
 
the underlying
shares in accordance with the directions of the CDI holders
 
.
 
As of December 31,
 
2023,
831,392,221
 
CDIs (representing beneficial
 
interest in
83,139,233
 
shares of common
stock) were owned by investors in the form of CDIs publicly
 
traded on the ASX.
Coronado Group LLC
As
 
of
 
December
 
31,
 
2023,
 
Coronado
 
Group
 
LLC,
 
the
 
Company’s
 
controlling
 
stockholder,
 
beneficially
 
owns
845,061,399
 
CDIs (representing a beneficial interest
 
in
84,506,140
 
shares of common stock) representing
50.4
%
of
 
the
 
total
1,676,453,730
 
CDIs
 
(representing
 
a
 
beneficial
 
interest
 
in
167,645,373
 
shares
 
of
 
common
 
stock)
outstanding.
 
Refer to Note 21 “Stock-Based Compensation” for
 
options to purchase common stock issued
 
and outstanding as
of December 31, 2023 and 2022.
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, 2023, the Company
 
declared:
 
Dividends of $
8.4
 
million, or $
0.005
 
per CDI ($
0.05
 
per share of common stock),
 
on February 21, 2023;
and
 
Dividends of $
8.4
 
million, or $
0.005
 
per CDI ($
0.05
 
per share of common stock), on August 7, 2023.
 
The Company paid a
 
total of $
16.7
 
million to stockholders and CDI
 
holders on the ASX, net
 
of $
0.1
 
million foreign
exchange gain on
 
payment 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, 2022, the Company
 
declared:
 
Dividends of $
150.9
 
million, or $
0.09
 
per CDI ($
0.90
 
per share of common stock), on February 24, 2022;
 
Dividends of $
200.1
 
million, or $
0.119
 
per CDI ($
1.19
 
per share of common stock), on May 9, 2022;
 
 
Dividends of $
125.7
 
million, or $
0.075
 
per CDI ($
0.75
 
per share of
 
common stock),
 
on August 8,
 
2022;
and
 
Dividends of $
225.0
 
million, or $
0.134
 
per CDI ($
1.34
 
per share of common stock), on
 
October 30, 2022.
The
 
Company
 
paid
 
a
 
total
 
of
 
$
700.2
 
million
 
to
 
stockholders
 
and
 
CDI
 
holders
 
on
 
the
 
ASX,
 
net
 
of
 
$
1.4
 
million
foreign exchange gain on payment to certain CDI
 
holders that elected to be paid in Australian dollars,
 
in relation
to the above declared dividends.
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
132
During the year ended December 31, 2021, the Company did
no
t declare or pay dividends.
(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):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
(US$ thousands, except per share data)
2023
2022
2021
Numerator:
Net income
$
156,065
$
771,703
$
189,423
Less:
 
Net loss attributable to non-controlling interest
(2)
Net income attributable to Company stockholders
$
156,065
$
771,703
$
189,425
Denominator (in thousands):
Weighted-average shares of common stock outstanding
167,645
167,645
156,710
Effects of dilutive shares
421
201
132
Weighted average diluted shares of common stock
 
outstanding
168,066
167,846
156,842
Earnings Per Share (US$):
Basic
0.93
4.60
1.21
Dilutive
0.93
4.60
1.21
7. 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)
2023
2022
Trade receivables
$
264,218
$
414,490
Provision for discounting and credit losses (Note 8)
(267)
(4,511)
Trade receivables, net
$
263,951
$
409,979
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
133
8. Provision for Discounting and Credit Losses
The following
 
table provides
 
the reconciliation
 
of the
 
allowance for
 
credit losses
 
that is
 
deducted from
 
financial
assets to present the net amount expected to be collected:
 
 
 
 
 
 
 
 
 
 
 
 
 
(US$ thousands)
Trade
receivables
Other
Assets
Total
As at January 1, 2021
$
734
$
522
$
1,256
Change in estimates during the current period
3,777
44
3,821
As of December 31, 2022
4,511
566
5,077
Change in estimates during the current period
(4,244)
28
(4,216)
As of December 31, 2023
$
267
$
594
$
861
9. Inventories
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Raw coal
$
55,998
$
50,604
Saleable coal
81,314
45,913
Total
 
coal inventories
137,312
96,517
Supplies inventory
54,967
61,501
Total
 
inventories
$
192,279
$
158,018
Coal inventories measured at its net realizable value were
 
$
2.4
 
million and $
5.0
 
million at December 31, 2023
and 2022, respectively,
 
and primarily relates to coal designated for deliveries under
 
the Stanwell below market
coal supply agreement. See further discussion in Note
 
17 “Contract Obligations”.
10.
 
Other Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Other current assets:
 
Prepayments
$
34,175
$
26,831
 
Long service leave receivable
8,438
7,884
 
Tax
 
credits receivable
3,265
4,183
 
Deposits to acquire mining equipment
18,935
 
Short term deposits
21,906
 
Other
16,890
21,290
Total
 
other current assets
$
103,609
$
60,188
Other non-current assets:
 
Favorable mineral leases
$
3,310
$
3,448
 
Deferred debt issue costs
2,672
2,463
 
Long service leave receivable
1,485
585
 
Tax
 
credits receivable
4,004
7,269
 
Deposits to acquire long lead mining equipment
8,185
18,126
 
Other
1,694
Total
 
other non-current assets
$
19,656
$
33,585
The Company
 
has other assets
 
which includes prepayments,
 
favorable mineral leases,
 
deferred debt issue
 
costs,
long service leave receivable
 
,
 
equipment deposits, short
 
term deposits and coalfield
 
employment enhancement
tax credit receivable.
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
134
Long service leave for
 
eligible coal mine workers
 
at the Company’s
 
Australian Operations is
 
paid when leave is
taken, with a subsequent
 
reimbursement received from
 
the Coal Mining Industry
 
(Long Service Leave Funding)
Corporation
 
in
 
Queensland,
 
Australia.
 
The
 
reimbursement
 
entitlement
 
is
 
recognized
 
as
 
a
 
receivable
 
and
 
is
measured as
 
the present
 
value of
 
expected future
 
reimbursements to
 
be received
 
for the
 
corresponding leave
liability recognized.
 
The Company
 
recognized tax
 
credits receivable
 
relating to
 
the Virginia
 
coalfield employment
 
enhancement tax
credit for
 
coal sales
 
from the
 
Company’s
 
mining properties
 
in the
 
State of
 
West
 
Virginia in
 
the U.S.
 
during the
2018
 
to
 
2021
 
income
 
years.
 
Where
 
the
 
credits
 
exceed
 
the
 
Company’s
 
state
 
tax
 
liability
 
for
 
the
 
tax
 
year,
 
the
excess is redeemable by the
 
Tax
 
Commissioner on behalf of
 
the Commonwealth of Virginia
 
for
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.
Deposits to acquire long lead mining equipment are advance
 
payments made for future mining equipment.
 
Short term deposits
 
are term deposits
 
held with financial
 
institutions with
 
maturity greater
 
than ninety
 
days and
less than twelve months and that do not meet the cash
 
and cash equivalents criteria.
The favorable mineral leases were recognized on acquisition of certain U.S. assets
 
that are amortized based on
the
 
coal
 
tonnage
 
removed
 
from
 
the
 
lease
 
property
 
relative
 
to
 
the
 
total
 
estimated
 
acquired
 
reserves
 
on
 
that
property.
 
The deferred debt issue costs as of December 31, 2023 and
 
December 31, 2022, are unamortized costs relating
to the
 
establishment of
 
the senior
 
secured asset-based
 
revolving credit facilities
 
(refer to
 
Note 16
 
“Interest Bearing
Liabilities” for
 
further description
 
of these
 
facilities). The
 
deferred issue
 
costs are
 
amortized over
 
the life
 
of the
facility on a straight-line basis
 
and included in “Interest expense, net”
 
in the Company’s Consolidated Statements
of Operations and Comprehensive Income
.
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)
2023
2022
Land
$
28,282
$
27,711
Buildings and improvements
102,642
91,336
Plant, machinery, mining
 
equipment and transportation vehicles
1,189,088
1,012,844
Mineral rights and reserves
389,868
373,309
Office and computer equipment
9,771
9,488
Mine development
579,717
565,106
Asset retirement obligation asset
88,384
87,877
Construction in progress
143,041
82,713
Total
 
cost of property,
 
plant and equipment
2,530,793
2,250,384
Less accumulated depreciation, depletion and amortization
1,024,356
860,836
Property, plant and
 
equipment, net
$
1,506,437
$
1,389,548
The amount of depreciation and amortization expense
 
for property, plant
 
and equipment for the years ended
December 31, 2023, 2022 and 2021 was $
152.4
 
million, $
155.8
 
million and $
166.2
 
million, respectively.
12.
 
Goodwill and Other Intangible Assets
(a)
 
Goodwill
In connection with the
 
Buchanan acquisition on
 
March 31, 2016, the Company
 
recorded goodwill in the
 
amount
of $
28.0
 
million. The
 
Company performed
 
a qualitative
 
assessment to
 
determine if
 
impairment was
 
required at
December 31, 2023 and 2022. Based upon the Company’s qualitative assessment,
 
it is more likely than not that
the fair value
 
of the reporting
 
unit is greater
 
than its carrying amount
 
at December 31, 2023 and
 
2022. As a
 
result,
no
 
impairment was required, and
 
the balance of
 
goodwill at both
 
December 31, 2023 and 2022
was $
28.0
 
million.
The Company has not noted any indicators of impairment since
 
the acquisition date.
 
 
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
135
(b)
 
Acquired Intangible Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2023
(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
$
1,068
$
574
Mining permits - Buchanan
28
3,501
967
2,534
Total
 
intangible assets
$
5,143
$
2,035
$
3,108
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
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,
 
2023,
 
2022
 
and
 
2021,
 
were
$
0.2
 
million,
 
$
0.2
 
million
 
and
 
$
0.2
 
million,
 
respectively.
 
Estimated
amortization expense for each of the next five years is
 
$
0.2
 
million.
13.
 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
 
following:
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Wages and employee benefits
$
42,348
$
38,687
Taxes
 
other than income taxes
6,728
5,988
Accrued royalties
45,770
117,131
Accrued freight costs
47,549
44,496
Accrued mining fees
89,622
103,492
Acquisition related accruals
53,700
11,669
Other liabilities
26,988
22,228
 
Total
 
accrued expenses and other current liabilities
$
312,705
$
343,691
Acquisition
 
related
 
accruals
 
is
 
an
 
accrual
 
for
 
the
 
remaining
 
estimated
 
stamp
 
duty
 
payable
 
on
 
the
 
Curragh
acquisition of $
53.7
 
million (A$
79.0
 
million). Refer to Note 26 “Contingencies” for further
 
details.
14. Leases
During the year ended December 31,
 
2023, the Company entered into a
 
number of agreements to lease
 
mining
equipment.
 
Based
 
on
 
the
 
Company’s
 
assessment
 
of
 
terms
 
within
 
these
 
agreements,
 
the
 
Company
 
classified
these leases as
 
operating leases. On
 
mobilization of th
 
ese leased mining
 
equipment, the Company
 
recognized
right-of-use assets and operating lease liabilities of $
72.5
 
million.
 
Information related to Company’s right-of use assets
 
and related lease liabilities are as follows:
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
136
 
 
 
 
 
 
Year ended December 31,
(US$ thousands)
2023
2022
Operating lease costs
$
17,013
$
8,088
Cash paid for operating lease liabilities
14,597
8,244
Finance lease costs:
Amortization of right of use assets
133
304
Interest on lease liabilities
11
20
Total
 
finance lease costs
$
144
$
324
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Operating leases:
Right of use asset – operating leases, net
$
80,899
$
17,385
Finance leases:
Property and equipment
371
371
Accumulated depreciation
(309)
(186)
Property and equipment, net
62
185
Current operating lease obligations
22,811
7,593
Non-current operating lease obligations
61,692
15,505
Total
 
Operating lease liabilities
84,503
23,098
Current finance lease obligations
68
127
Non-current finance lease obligations
68
Total
 
Finance lease liabilities
68
195
Current lease obligations
22,879
7,720
Non-current lease obligations
61,692
15,573
Total
 
lease obligations
$
84,571
$
23,293
 
 
 
 
December 31,
2023
2022
Weighted Average Remaining
 
Lease Term (Years)
Weighted average remaining lease term – finance
 
leases
0.5
1.5
Weighted average remaining lease term – operating
 
leases
3.7
4.1
Weighted Average Discount
 
Rate
Weighted discount rate – finance lease
7.6%
7.6%
Weighted discount rate – operating lease
9.0%
8.9%
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
137
The Company’s leases have remaining lease terms of
1 year
 
to
5 years
, some of which include
 
options to extend
the terms
 
where the
 
Company deems
 
it is
 
reasonably certain
 
the options
 
will be
 
exercised. Maturities
 
of lease
liabilities as at December 31, 2023, are as follows:
 
 
 
 
 
 
 
 
 
(US$ thousands)
Operating
Lease
Finance
Lease
Year ending
 
December 31,
2024
$
29,148
$
70
2025
28,361
2026
20,628
2027
12,235
Thereafter
8,787
Total
 
lease payments
99,159
70
Less imputed interest
(14,656)
(2)
Total
 
lease liability
$
84,503
$
68
15.
 
Asset Retirement Obligations
Reclamation of
 
areas disturbed
 
by mining
 
operations
 
must be
 
performed
 
by the
 
Company in
 
accordance
 
with
approved
 
reclamation
 
plans
 
and
 
in
 
compliance
 
with
 
state
 
and
 
federal
 
laws
 
in
 
the
 
states
 
of
 
West
 
Virginia
 
and
Virginia
 
in
 
the
 
United
 
States
 
and
 
Queensland
 
in
 
Australia.
 
For
 
areas
 
disturbed,
 
reclamation
 
is
 
performed
progressively,
 
however,
 
a
 
significant
 
amount
 
of
 
the
 
reclamation
 
will
 
take
 
place
 
in
 
the
 
future
 
when
 
operations
cease. There were
no
 
assets that were
 
legally restricted for
 
purposes of settling asset
 
retirement obligations as
of December 31,
 
2023 and 2022.
 
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,
 
2023 and
 
December 31,
 
2022
were as follows:
 
 
 
 
 
 
 
(US$ thousands)
December 31,
2023
December 31,
2022
Total
 
asset retirement obligations at beginning of the year
$
138,490
$
120,277
ARO liability additions - new disturbances
9,923
1,835
Accretion
11,252
9,066
Reclamation performed in the year
(5,334)
(3,270)
Reclass of asset held for sale
(1)
11,115
Gain on settlement of ARO
(53)
Change in estimate recorded to operations
(3,151)
(2)
Change in estimate recorded to assets
682
15,381
Foreign currency translation adjustment
952
(4,744)
Total
 
Asset retirement obligations at end of the year
163,929
138,490
Total
 
Asset retirement obligations at December 31
(15,321)
(10,646)
Asset retirement obligation, excluding current portion
$
148,608
$
127,844
(1)
 
Refer to Note 4 “Assets Held for Sale”
 
for further information.
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
138
16. Interest Bearing Liabilities
 
 
 
 
 
 
 
 
 
 
 
The following is a summary of interest-bearing liabilities
 
at December 31, 2023:
 
(US$ thousands)
December 31,
2023
December 31,
2022
Weighted Average
Interest Rate at
December 31, 2023
Final
Maturity
10.75
% Senior Secured Notes
$
242,326
$
242,326
12.14
%
(2)
2026
New ABL Facility
2026
Discount and debt issuance costs
(1)
(6,983)
(9,373)
Total
 
interest bearing liabilities
$
235,343
$
232,953
(1)
Relates to discount
 
and debt
 
issuance costs
 
on the establishment
 
of the Notes.
 
Deferred debt
 
issuance costs
 
incurred on
 
the establishment
of the New ABL Facility has been included
 
within "Other non-current assets" on the Consolidated
 
Balance Sheets.
(2)
 
Represents the effective interest rate.
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
 
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 New ABL Collateral), or the Notes Collateral, and (ii) a
second-priority lien on the New 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 $
150.0
 
million, or the New 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. As of
 
December 31, 2023,
the Company was in compliance with all applicable covenants
 
under the Indenture.
Under the terms of the
 
Indenture, upon the occurrence of a “Change
 
of Control” (as defined in the
 
Indenture), the
issuer
 
is
 
required
 
to
 
make
 
an
 
offer,
 
or
 
a
 
Change
 
of
 
Control
 
Offer,
 
to
 
repurchase
 
the
 
Notes
 
at
101
%
 
of
 
the
aggregate principal
 
amount thereof,
 
plus accrued
 
and unpaid
 
interest, if
 
any,
 
to, but
 
excluding, the
 
repurchase
date. Alternatively,
 
if the
 
issuer elects
 
to redeem
 
all of
 
the Notes,
 
during the
 
12-month period
 
commencing
 
on
May 15 of
 
the years set
 
forth below at
 
the redemption
 
prices (expressed in
 
percentages of principal
 
amount on
the redemption date) set forth below, plus accrued and unpaid interest to,
 
but not including, the redemption date,
the issuer is not required to make a Change of Control
 
Offer:
Period
Redemption price
2024
104.03%
2025 and thereafter
100.00%
New Asset Based Revolving Credit Facility
 
On May
 
8, 2023,
 
the Company, Coronado Coal
 
Corporation, a Delaware
 
corporation and wholly
 
owned subsidiary
of the Company,
 
Coronado Finance Pty
 
Ltd, an Australian
 
proprietary company
 
and a wholly
 
owned subsidiary
of the Company,
 
or an Australian
 
Borrower, Coronado
 
Curragh Pty Ltd,
 
an Australian proprietary
 
company and
wholly
 
owned
 
subsidiary
 
of
 
the
 
Company,
 
or
 
an
 
Australian
 
Borrower
 
and,
 
together
 
with
 
the
 
other
 
Australian
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
139
Borrower, the Borrowers,
 
and the other guarantors party
 
thereto, collectively with the Company,
 
the Guarantors
and, together
 
with the
 
Borrowers, the
 
Loan Parties,
 
entered into
 
a senior
 
secured asset-based
 
revolving credit
agreement in
 
an initial
 
aggregate amount
 
of $
150.0
 
million, or
 
the New
 
ABL Facility,
 
with Global
 
Loan Agency
Services Australia
 
Pty Ltd,
 
as the
 
Administrative Agent,
 
Global Loan
 
Agency Services
 
Australia Nominees
 
Pty
Ltd, as the
 
Collateral Agent,
 
the Hongkong and
 
Shanghai Banking Corporation
 
Limited, Sydney
 
Branch, as the
Lender, and DBS Bank
 
Limited, Australia Branch,
 
as the
 
Lender and, together
 
with the other
 
Lender, the Lenders.
On August 3, 2023, the Company
 
satisfied all conditions precedent
 
under the New ABL Facility,
 
at which time it
became effective and replaced the predecessor
 
ABL Facility.
 
The New
 
ABL Facility
 
matures in
 
August 2026
 
and provides
 
for up
 
to $
150.0
 
million in
 
borrowings, including
 
a
$
100.0
 
million sublimit for the issuance
 
of letters of credit and $
70.0
 
million sublimit as a revolving
 
credit facility.
Availability under the New
 
ABL Facility is
 
limited to an
 
eligible borrowing base, determined
 
by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under
 
the New
 
ABL Facility
 
bear interest
 
at a
 
rate per
 
annum equal
 
to an
 
applicable rate
 
of
2.80
%
plus BBSY,
 
for loans denominated in A$, or SOFR, for loans denominated
 
in US$, at the Borrower’s election.
 
The New
 
ABL Facility
 
is guaranteed
 
by the
 
Guarantors.
 
Amounts outstanding
 
under the
 
New ABL
 
Facility are
secured by
 
(i) first
 
priority lien
 
in the
 
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, collectively,
the New ABL Collateral, (ii)
 
a second-priority lien on substantially
 
all of the Company’s
 
assets and the assets
 
of
the guarantors, other than the New ABL
 
Collateral, and (iii) solely in the case of
 
the obligations of the Australian
Borrower, a featherweight
 
floating security interest over certain
 
assets of the Australian Borrower,
 
in each case,
subject to certain customary exceptions.
 
The New
 
ABL Facility
 
contains customary representations
 
and warranties
 
and affirmative and
 
negative covenants
including, among
 
others, a
 
covenant regarding
 
the maintenance
 
of leverage
 
ratio to
 
be less
 
than
3.00
 
times, a
covenant regarding maintenance of interest coverage ratio to be more than
3.00
 
times, covenants relating to the
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or
 
any of its
Subsidiaries,
 
covenants
 
relating
 
to
 
financial
 
reporting,
 
covenants
 
relating
 
to
 
the
 
incurrence
 
of
 
liens
 
or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and
 
sales of all
 
or substantially all
 
of the Borrowers
 
and Guarantors’, collectively
 
the Loan Parties,
 
assets
and limitations on changes in the nature of the Loan Parties’
 
business.
Subject
 
to
 
customary
 
grace
 
periods
 
and
 
notice
 
requirements,
 
the
 
New
 
ABL
 
Facility
 
also
 
contains
 
customary
events of default.
Under the terms of New ABL Facility,
 
a Review Event (as defined in the New ABL Facility) is triggered if, among
other matters, a “change of control” (as defined in the
 
New ABL Facility) occurs.
 
Following the
 
occurrence of
 
a Review
 
Event, the
 
Borrowers must
 
promptly meet
 
and consult
 
in good
 
faith with
the Administrative Agent and the Lenders to agree a
 
strategy to address the relevant Review Event including but
not limited to a restructure of the terms of the New ABL Facility to the satisfaction of the Lenders.
 
If at the end of
a period
 
of
20
 
business days
 
after the
 
occurrence
 
of the
 
Review Event,
 
the Lenders
 
are not
 
satisfied
 
with the
result of their discussion or meeting with the Borrowers or do not
 
wish to continue to provide their commitments,
the Lenders may declare all amounts owing
 
under the ABL Facility immediately due and payable,
 
terminate such
Lenders’
 
commitments
 
to
 
make
 
loans
 
under
 
the
 
ABL
 
Facility,
 
require
 
the
 
Borrowers
 
to
 
cash
 
collateralize
 
any
letter of credit obligations and/or exercise any and all remedies
 
and other rights under the New ABL Facility.
To establish
 
the New ABL Facility, the Company incurred debt issuance costs of $
3.4
 
million. The Company has
elected an accounting
 
policy to present debt
 
issuance costs incurred
 
before the debt liability
 
is recognized (e.g.
before the debt
 
proceeds are received)
 
as an asset
 
which will be
 
amortized ratably
 
over the term
 
of the facility.
The costs
 
will not
 
be subsequently
 
reclassified as
 
a direct
 
deduction of
 
the liability.
 
The carrying
 
value of
 
debt
issuance costs, recorded
 
as “Other non-current
 
assets” in the
 
Consolidated Balance
 
Sheet was
 
$
2.7
 
million as
at December 31, 2023.
As
 
at
 
December
 
31,
 
2023,
 
the
 
letter
 
of
 
credit
 
sublimit
 
had
 
been
 
partially
 
used
 
to
 
issue
 
$
21.9
 
million
 
of
 
bank
guarantees on
 
behalf of
 
the Company
 
and
no
 
amounts were
 
drawn under
 
the revolving
 
credit sublimit
 
of New
ABL Facility. As at December 31, 2023, the Company was in compliance with all applicable covenants under the
New ABL Facility.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
140
Predecessor ABL Facility
 
On
 
August
 
3,
 
2023,
 
the
 
New
 
ABL
 
Facility
 
replaced
 
the
 
predecessor
 
ABL
 
Facility.
 
As
 
a
 
result
 
of
 
the
 
early
termination of the predecessor ABL Facility, the Company recorded a loss on
 
debt extinguishment of $
1.4
 
million
in the
 
Consolidated Statement of
 
Operations and Comprehensive
 
Income for the
 
year ended December
 
31, 2023.
17. 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
 
million related to the non-market
 
portion of the coal leases
 
and is amortizing it ratably
 
over the respective
estimated coal reserves as they are mined and sold.
In
 
connection
 
with
 
the
 
acquisition
 
of
 
Curragh,
 
the
 
Company
 
assumed
 
the
 
Stanwell
 
below
 
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
 
million (A$
400.0
 
million) related
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
 
years
 
ended December
 
31, 2023,
 
2022 and
 
2021 were
 
$
32.8
million,
 
$
36.2
 
million
 
and
 
$
33.7
 
million,
 
respectively,
 
and
 
recorded
 
as
 
“Other
 
revenues”
 
in
 
the
 
Consolidated
Statements of Operations and Comprehensive Income.
The following is a summary of the contract obligations
 
as of December 31, 2023:
 
 
 
 
 
 
 
(US$ thousands)
Short-term
Long-term
Total
Coal leases contract liability
$
843
$
19,476
$
20,319
Stanwell below market coal supply agreement
39,879
41,716
81,595
$
40,722
$
61,192
$
101,914
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
18.
 
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
 
million (A$
210.0
 
million), calculated using the contractual pre-tax discount rate of
13
% representing
 
fair
 
value
 
of
 
the
 
arrangement
 
at
 
the
 
date
 
of
 
acquisition.
 
The
 
deferred
 
consideration
 
liability
reflects passage of
 
time changes by
 
way of an annual
 
accretion at the
 
contractual pre-tax discount
 
rate of
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
 
liability is
recognized
 
within
 
“Interest
 
expense,
 
net”
 
in
 
the
 
Consolidated
 
Statements
 
of
 
Operations
 
and
 
Comprehensive
Income. The Right-to-mine-asset are amortized over the
 
coal reserves mined from the SRA.
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Stanwell Reserved Area deferred consideration
$
277,442
$
243,191
$
277,442
$
243,191
19.
 
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.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
141
The Company obtained workers
 
compensation insurance for work
 
related injuries, including black
 
lung, through
a third-party
 
commercial
 
insurance company.
 
The insurance
 
policy covers
 
claims
 
that exceed
 
$
0.5
 
million
 
per
occurrence for all years, or aggregate claims in excess of $
29.1
million, $
22.7
 
million and $
22.0
 
million for policy
years ending May 2024,
 
May 2023 and May
 
2022. Per the contractual
 
agreements, the Company
 
was required
to provide a collateral
 
security of $
63.4
 
million for policy
 
years 2017 through 2024,
 
ending May 31, 2024,
 
which
is accomplished through providing a combination of letters of credit and cash collateral in an escrow account.
As
of December 31,
 
2023, the Company
 
has provided $
16.8
 
million of letters
 
of credit, $
28.4
 
million of cash
 
collateral
and surety bonds of $
15.2
 
million totaling $
60.4
 
million. The remaining collateral
 
was provided in January 2024,
as required.
For the
 
years ended
 
December 31, 2023,
 
2022 and
 
2021, 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
 
$
16.3
 
million,
 
$
12.2
 
million
 
and
 
$
12.2
 
million,
 
respectively.
 
As of
December 31, 2023 and 2022, the estimated workers’ compensation
 
liability was $
37.6
 
million and $
30.1
 
million,
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,
 
2023
 
and
 
2022,
 
$
32.6
 
million
 
and
 
$
27.1
 
million,
 
respectively,
 
are
 
recorded
 
within
 
“Other
 
non-
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.
20.
 
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, 2023,
2022 and 2021 amounted to $
5.5
 
million, $
3.9
 
million and $
3.3
 
million, respectively.
In the United States, the Company is self-insured for
 
employee health care claims up to the lesser of $
0.2
 
million
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, 2023 and 2022, the Company had
provided
 
accruals
 
of
 
$
2.3
 
million
 
and
 
$
1.9
 
million,
 
respectively,
 
for
 
claims
 
incurred
 
but
 
not
 
paid
 
based
 
on
management’s estimate
 
of the Company’s
 
self-insured liability.
 
For the years
 
ended December
 
31, 2023, 2022
and 2021, the Company incurred claims,
 
premium expenses and administrative fees
 
related to this plan totaling
$
35.0
 
million, $
29.8
 
million and $
25.8
 
million, respectively.
21.
 
Stock-Based Compensation
Total
 
stock-based
 
compensation
 
expense
 
was
 
$
2.9
 
million,
 
$
2.7
 
million
 
and
 
$
0.5
 
million
 
for
 
the
 
years
 
ended
December 31,
 
2023,
 
2022
 
and
 
2021,
 
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,
 
2023,
 
the
 
Company
 
had
 
$
5.4
 
million
 
of
 
total
 
unrecognized
 
compensation
 
cost
 
related
 
to
nonvested stock-based
 
compensation awards
 
granted under
 
the plans.
 
This cost
 
is expected to
 
be recognized
over
2.25
 
years,
 
with
 
a
 
weighted-average
 
period
 
of
1.76
 
years,
 
as
 
stock-based
 
compensation
 
expense.
 
This
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.
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
142
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
 
CDIs
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 outstanding under the 2018
 
as of December 31, 2023:
 
 
 
 
 
Grant year
Vesting date
Performance period
PSUs
RSUs
2023
31/03/2026
01/01/2023 - 31/12/2025
4,823,269
 
2023
01/01/2024
not applicable
 
43,650
2023
01/07/2024
not applicable
 
88,760
2022
01/01/2024
not applicable
 
359,291
2022
01/07/2024
not applicable
 
243,192
2022
31/03/2026
01/01/2022 - 31/12/2024
6,899,512
 
2021
31/03/2025
01/01/2021 - 31/12/2023
4,901,843
 
2020
31/03/2024
01/01/2020 - 31/12/2022
1,367,829
 
The Options
 
and PSUs granted
 
that will
 
vest are
 
subject to the
 
achievement of goals
 
over the
 
performance period.
These goals are relative total shareholder return, or TSR, and scorecard performance metrics, or the Scorecard.
TSR is determined based on the Company’s percentile ranking of TSR over the performance period relative to a
predefined peer group of similar companies.
Performance metrics applicable to the Options and
 
PSUs granted as summarized below:
 
 
 
 
 
 
 
Grant year
Relative TSR
Scorecard
TSR
Safety
TSR
Cashflow
2023
33.3%
33.3%
-
33.3%
2022, 2021 and 2020
33.3%
22.2%
22.2%
22.2%
Awards subject to
 
TSR vest based
 
on service
 
and market conditions.
 
The fair
 
value of
 
relative TSR was
 
estimated
on the grant date using a Monte Carlo simulation model.
 
Awards subject to Scorecard vest based on service and performance conditions. The fair value of the Scorecard
was
 
estimated
 
on
 
the
 
grant
 
date
 
fair
 
value
 
of
 
the
 
Company’s
 
common
 
stock
 
adjusted
 
for
 
dividends
 
foregone
during the performance period.
 
Stock Option Awards
The Company’s
 
2018 stock
 
option awards were
 
granted on the
 
date of the
 
IPO with an
 
exercise price
 
of $
2.84
per CDI (A$
4.00
 
per CDI) which was equal to the Company’s IPO
 
Price.
The Company’s Stock Option activity is summarized
 
below:
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
143
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Option Plan Activity
2023
2022
2021
Opening at the beginning of the year
181,687
1,015,006
1,083,101
Forfeited
(833,319)
(68,095)
Vested
(181,687)
Outstanding at the end of the year
181,687
1,015,006
Exercisable at the end of the year
181,687
2023
2022
2021
Weighted-average remaining contractual term (in
years)
0.25
1.25
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
 
(A$
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 $
2.44
 
(A$
3.56
).
181,687
 
stock option awards vested during the year remained
exercisable as at December 31, 2023.
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
2023
2022
2021
Nonvested at the beginning of the year
14,858,921
8,501,869
4,002,783
Granted
4,872,122
7,471,100
5,998,212
Forfeited
(1,451,677)
(1,114,048)
(1,499,126)
Vested and settled
(286,913)
Nonvested and outstanding at the end of the year
17,992,453
14,858,921
8,501,869
2023
2022
2021
Weighted-average grant date fair value (per CDI)
$
0.58
$
0.53
$
0.43
Weighted-average remaining term (in years)
1.82
2.54
2.79
The weighted average grant date fair value of all PSU
 
Awards granted in 2023 was $
0.74
 
(A$
1.11
).
The assumptions used to determine the PSUs fair value
 
on each grant date were as follow:
 
 
 
 
2023 Grant
2022 Grant
2021 Grant
2020 Grant
Time to maturity (in years) (i)
2.98
3.99
3.85
3.49
Dividend yield (ii)
7.8%
16.3%
3.0%
1.6%
Expected volatility (iii)
60.0%
60.0%
60.0%
60.0%
Risk-free interest rate (iv)
2.98%
2.66%
0.35%
0.18%
(i)
 
Time to maturity represents the period
 
that the Company’s stock-based
 
awards will vest. All awards cliff
vest at the end of the requisite service period.
(ii)
 
Dividend yield is the expected average yield of dividends
 
expected over the vesting period.
(iii)
 
The
 
volatility
 
was
 
estimated
 
using
 
comparable
 
public
 
company’s
 
volatility
 
and
 
the
 
Company’s
 
own
volatility for similar terms.
(iv)
 
Risk-free interest
 
rate is based
 
on an interpolated
 
Australian Government
 
Bond Rate
 
at the time
 
of the
grant for periods corresponding with the expected term
 
of the PSUs.
The above
 
inputs were
 
consistent to
 
determine the
 
fair value
 
of the
 
market and
 
performance conditions
 
of the
PSUs awards.
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
144
Restricted Stock Units
RSUs issued to certain employees are only subject
 
to service conditions and vest at various intervals
 
during the
service period.
 
The fair
 
value of
 
the award
 
was determined
 
using the
 
market price
 
of the
 
Company’s Common
Stock at the date of grant and compensation expense
 
is recorded over the requisite service period.
 
Activity of the Company’s
 
RSUs that are ultimately
 
payable in the Company’s
 
CDIs or the equivalent
 
number of
shares of common stock granted under the 2018 Plan
 
is summarized below:
 
 
 
 
 
 
 
 
 
Restricted Stock Units Plan Activity
2023
2022
Nonvested at the beginning of the year
1,144,034
Granted
144,506
1,144,034
Forfeited
(46,593)
Vested and settled
(507,054)
Nonvested and outstanding at end of the year
734,893
1,144,034
2023
2022
Weighted-average grant date fair value (per CDI)
$
1.26
$
1.22
Weighted-average remaining term (in years)
0.23
0.70
Change in Control
Under the
 
Company’s
 
2018
 
Equity
 
Incentive
 
Plan,
 
the
 
change
 
of control
 
provisions
 
may
 
also
 
be
 
triggered
 
on
completion
 
of
 
the
 
SGI
 
Transaction,
 
however
 
the
 
Compensation
 
and
 
Nominating
 
Committee
 
of
 
the
 
Board
 
of
Directors, at its
 
sole discretion, will determine
 
how the outstanding awards
 
under the plan
 
will be dealt
 
with, which
may include acceleration of vesting condition and related compensation
 
costs.
22.
 
Income Taxes
Income from continuing operations before income
 
taxes for the years presented
 
below consisted of the following:
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
2021
U.S.
$
334,373
$
609,617
$
226,463
Non-U.S.
(210,559)
393,660
16,062
Total
$
123,814
$
1,003,277
$
242,525
Total
income tax expense (benefit) for the periods presented
 
below consisted of the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
2021
Current:
U.S. federal
$
(6,303)
$
90,933
$
30,075
Non-U.S.
(2,715)
75,270
(4,443)
State
(1,895)
25,347
3,480
Total
 
current
(10,913)
191,550
29,112
Deferred:
U.S. federal
28,943
406
13,486
Non-U.S.
(45,976)
35,425
6,658
State
(4,305)
4,193
3,846
Total
 
deferred
(21,338)
40,024
23,990
Total
 
income tax (benefit) expense
$
(32,251)
$
231,574
$
53,102
 
 
 
 
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
145
The following is a reconciliation of the expected statutory federal income tax expense (benefit) to the Company’s
income tax (benefit) expense for the periods presented below:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
2021
Current:
Expected income tax expense at U.S. federal statutory rate
$
26,001
$
210,690
$
50,931
Percentage depletion
(17,871)
(41,047)
FDII deduction
(7,796)
Permanent differences
2,176
(2,262)
296
Prior period tax return adjustments and amendments
(46,060)
596
(4,259)
Uncertain tax positions
21,243
Australian branch impact on U.S. taxes
(14,552)
42,049
(1,699)
State income taxes, net of federal benefit
4,608
21,548
7,833
Total
 
income tax (benefit) expense
$
(32,251)
$
231,574
$
53,102
Effective tax rate
(
26.0
%)
23.1%
21.9%
The
 
prior
 
period
 
tax
 
return
 
adjustment
 
relates
 
predominantly
 
to
 
a
 
Foreign
 
Derived
 
Intangible
 
Income
 
(“FDII”)
deduction
 
in
 
the
 
U.S.
 
which
 
the
 
Company
 
has
 
chosen
 
to
 
deduct
 
after
 
undertaking
 
a
 
study
 
to
 
confirm
 
the
Company’s eligibility.
 
Deferred income taxes
 
reflect the net
 
tax effects of
 
temporary differences between the
 
carrying amounts of
 
assets
and liabilities
 
for financial
 
reporting purposes
 
and the
 
amount used
 
for income
 
tax purposes
 
using the
 
enacted
tax rates and laws currently
 
in effect. Significant components
 
of the Company’s deferred
 
income tax assets and
liabilities as of December 31, 2023 and 2022 were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
(US$ thousands)
2023
2022
Deferred income tax assets:
Accruals and provisions
$
44,373
$
36,409
Contract obligations
108,672
119,505
Lease obligations
35,312
Asset retirement obligation
55,322
49,078
Goodwill
6,653
6,590
Tax
 
losses
59,964
6,886
Interest limitation carried forward
1,766
14,408
Other
19,574
31,747
Gross deferred income tax assets
331,636
264,623
Valuation allowance
(1)
(33,894)
(34,667)
Total
 
deferred income tax assets, net of valuation allowance
297,742
229,956
Deferred income tax liabilities:
Property, plant, equipment
 
and mine development, principally due to
differences in depreciation, depletion and asset
 
impairments
(297,915)
(300,968)
Warehouse stock
(12,824)
(13,980)
Right of use asset
(34,021)
U.S. liability on foreign deferred taxes
(19,075)
Other
(6,822)
(10,679)
Total
 
deferred income tax liabilities
(370,657)
(325,627)
Net deferred income tax liability
$
(72,915)
$
(95,671)
(1)
 
As of
 
December 31,
 
2023, the
 
Company recorded
 
a valuation
 
allowance against
 
a deferred
 
tax asset
 
of an
equal amount which relates
 
predominantly to tax losses
 
and land and goodwill.
 
A company,
 
which is not part
 
of
the Australian tax consolidated group,
 
had tax losses carried forward
 
of $
10.9
 
million (tax effected) for
 
which an
equal valuation allowance has been recognized. Due to the capital character of
 
land and goodwill and the lack of
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
146
expected capital gains, the Group is not expected to realize
 
the benefit of this deferred tax asset.
The Australian tax consolidated group has tax
 
losses of $
48.7
 
million carried forward at December 31, 2023.
 
The
tax losses of
 
$
27.0
 
million (tax effected) at
 
December 31, 2021, carried
 
forward at the
 
Australian Operations 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 was effective for taxable
years beginning after December 31, 2022 and did not
 
have any impact to the Company.
 
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.
During the
 
year ended
 
December 31,
 
2023, the
 
Company identified
 
unrecognized tax
 
benefits of
 
$
20.8
 
million
that, if recognized,
 
would affect the
 
effective tax rate.
 
The Company did
no
t identify or
 
record any uncertain
 
tax
positions during the years ended December 31, 2022 and 2021.
 
 
 
 
 
December 31,
(US$)
2023
At beginning of the year
$
Additions based on tax positions related to current year
6,388,281
Additions for tax positions of prior years
14,395,565
At end of the year
20,783,846
The Company
 
recorded
no
 
amounts related
 
to interest
 
and penalties
 
on uncertain
 
tax positions
 
for 2023, 2022
and 2021 as these were not material.
 
The Company is subject to taxation in
 
the United States and Australia. As of December 31, 2023,
 
tax years 2018
to 2022 are open to review
 
from taxation authorities in the United States. In
 
Australia, tax years 2019 to 2022 are
open to review and the Australian Taxation
 
Office is presently conducting a review
 
of these years.
23.
 
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,
 
2023
 
147
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, 2023
 
and 2022,
 
there were
no
 
financial instruments
 
required to
 
be measured
 
at fair
 
value
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, 2023 and 2022:
 
Cash
 
and
 
cash
 
equivalents,
 
accounts
 
receivable,
 
short-term
 
deposits,
 
accounts
 
payable,
 
accrued
expenses,
 
lease
 
liabilities
 
and
 
other
 
current
 
financial
 
liabilities:
 
The
 
carrying
 
amounts
 
reported
 
in
 
the
Consolidated Balance Sheets approximate fair value due to the
 
short maturity of these instruments.
 
Restricted deposits,
 
lease liabilities,
 
interest bearing
 
liabilities and
 
other financial
 
liabilities: The
 
fair values
approximate the carrying amounts
 
reported in the Consolidated Balance Sheets.
 
Interest bearing liabilities: The
 
Company’s outstanding interest-bearing liabilities are carried at
 
amortized
cost. As of December 31,
 
2023, there were
no
 
amounts drawn under the
 
revolving credit sublimit of
 
the
New ABL
 
Facility. The estimated fair
 
value of
 
the Notes as
 
of December
 
31, 2023
 
is approximately $
251.4
million based upon quoted market prices in a market that
 
is not considered active (Level 2).
24.
 
Accumulated Other Comprehensive Losses
The Company’s Accumulated
 
Other Comprehensive Losses
 
consists of foreign currency
 
translation adjustment
from subsidiaries not using the U.S. dollar as their functional currency.
 
 
 
 
 
 
 
(US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2021
$
(44,228)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income before reclassifications
(19,610)
Loss on long-term intra-entity foreign currency transactions
(27,585)
Total
 
net current-period other comprehensive loss
(47,195)
Balance at December 31, 2022
(91,423)
Net current-period other comprehensive income (loss):
Gain in other comprehensive income before reclassifications
(2,367)
Gain on long-term intra-entity foreign currency transactions
3,863
Total
 
net current-period other comprehensive losses
1,496
Balance at December 31, 2023
$
(89,927)
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
148
25. 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,
2024
$
5,795
2025
5,423
2026
5,280
2027
5,241
2028
5,174
Thereafter
26,162
Total
$
53,075
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,
 
2023,
 
purchase
 
commitments
 
for
 
capital
 
expenditures
 
were
 
$
20.9
 
million,
 
all
 
of
 
which
 
is
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
12 years
.
 
In the U.S., the Company typically
 
negotiates its rail and coal terminal
 
on an annual basis.
 
As of December 31,
2023, these Australian
 
and U.S. commitments
 
under take-or-pay
 
arrangements totaled
 
$
788.4
 
million, of which
approximately $
94.7
 
million is obligated
 
within the next
 
year,
 
$
187.3
 
million within
 
1-3 years, $
189.3
 
million 3-5
years and $
317.1
 
million thereafter.
26. Contingencies
Surety bond, letters of credit and bank guarantees
In the
 
normal course
 
of business,
 
the Company
 
is a
 
party to
 
certain guarantees
 
and financial
 
instruments with
off-balance sheet risk, such as bank
 
guarantees, letters of credit and performance
 
or surety bonds.
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.
For
 
the
 
U.S.
 
Operations
 
in
 
order
 
to
 
provide
 
the
 
required
 
financial
 
assurance
 
for
 
post
 
mining
 
reclamation,
 
the
Company generally uses
 
surety bonds. The
 
Company uses surety
 
bonds and bank
 
letters of credit
 
to collateralize
certain
 
other
 
obligations
 
including
 
contractual
 
obligations
 
under
 
workers’
 
compensation
 
insurances.
 
As
 
of
December 31,
 
2023, the
 
Company had
 
outstanding surety
 
bonds of
 
$
44.0
 
million and
 
letters of
 
credit of
 
$
16.8
million issued from available bank guarantees under the
 
New ABL Facility.
 
For the Australian
 
Operations as at
 
December 31, 2023, the
 
Company had bank
 
guarantees outstanding of $
24.4
million,
 
including
 
$
5.1
 
million
 
issued
 
from
 
the
 
New
 
ABL
 
Facility,
 
primarily
 
in
 
respect
 
of
 
certain
 
rail
 
and
 
port
arrangements of the Company.
 
As at December 31, 2023, the Company, in aggregate, had total outstanding bank guarantees provided of $
41.2
million to secure obligations and commitments, including $
21.9
 
million issued from the New ABL Facility.
 
Future regulatory changes relating to the above obligations could result in
 
increased obligations, additional costs
or additional collateral requirements.
Restricted deposits – cash collateral
As required
 
by certain
 
agreements,
 
the Company
 
had cash
 
collateral
 
in the
 
form of
 
deposits in
 
the amount
 
of
$
68.7
 
million and $
89.1
 
million as of December 31,
 
2023 and 2022, respectively, to provide back-to-back support
for bank guarantees, financial
 
payments, other performance obligations, various
 
other operating agreements and
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
149
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 New
 
ABL Facility,
 
the Company
 
may be
 
required to
 
cash collateralize
 
the
New 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,
 
2023,
no
 
such letter
 
of credit
 
was outstanding
 
after the
 
expiration or
 
termination
date and
no
 
cash collateral was required.
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 $
56.2
 
million (A$
82.2
 
million) plus unpaid tax interest. On November 23,
2022, the Company filed an objection to the assessment
 
.
 
On January 9, 2024, the Company’s objection
 
to the assessed stamp duty was disallowed by the
 
QRO.
The Company,
 
based on legal
 
and valuation advice
 
obtained, continues to
 
maintain its position and
 
the estimated
stamp duty payable of $
29.4
 
million (A$
43.0
 
million) on the Curragh
 
acquisition. In October 2022,
 
the Company
made a partial payment prior to filing the filing of the objection of stamp duty, reducing the Company’s
 
estimated
accrual to $
11.8
 
million (A$
17.3
 
million).
As per the Taxation
 
Administration Act (Queensland)
 
2001, the Company
 
can only appeal
 
or apply for a
 
review
of QRO’s
 
decision if
 
it has
 
paid the
 
total assessed
 
stamp duty
 
of $
56.2
 
million (A$
82.2
 
million) plus
 
unpaid tax
interest of $
14.5
 
million (A$
21.2
 
million). Such appeal must be lodged by March 11,
 
2024.
 
The Company
 
disputes the
 
additional amount
 
assessed of
 
stamp duty
 
and unpaid
 
tax interest
 
and is
 
currently
considering its options to either appeal the decision to the Supreme Court of
 
Queensland or apply for a review of
QRO’s decision by the Queensland Civil and Administrative
 
Tribunal.
 
Given that
 
the Company
 
is unable
 
to avoid
 
the payment,
 
and the
 
recovery of
 
such amount
 
through litigation
 
is
uncertain,
 
the
 
additional
 
accrual
 
of
 
$
41.3
 
million
 
has
 
been
 
recognized
 
within
 
“Accrued
 
Expenses
 
and
 
Other
Current Liabilities”
 
in the
 
Consolidated Balance
 
Sheet as
 
at December
 
31, 2023,
 
and a
 
corresponding amount
recognized
 
under
 
“Selling,
 
general
 
and
 
administrative”
 
expense
 
in
 
the
 
Company’s
 
Consolidated
 
Statement
 
of
Operations and
 
Comprehensive Income.
 
The total
 
accrual of
 
$
53.7
 
million (A$
79.0
 
million) as
 
at 31
 
December
2023
 
is
 
based
 
on
 
the
 
Company’s
 
estimate
 
of
 
the
 
outstanding
 
stamp
 
duty
 
payable,
 
the
 
additional
 
accrual
recognized, less partial payments to date of $
17.6
 
million (A$
25.7
 
million).
 
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.
27. 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
 
million
 
in
 
the
 
Consolidated
 
Statement
 
of
 
Operations
 
and
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.
 
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
 
million aggregate principal amount of Notes at the closing of the Notes Offering. Following
 
the redemption
of Notes to date, the principal amount of Notes held by EMG reduced to
 
$
52.0
 
million as at December 31, 2023.
At December
 
31, 2023
 
and 2022,
 
interest payable
 
to affiliates
 
of EMG
 
on the
 
Notes was
 
$
0.7
 
million and
 
$
0.7
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
150
million, respectively, and was recorded within
 
“Accrued expenses and other
 
current liabilities” in
 
the Consolidated
Balance
 
Sheets.
 
Interest
 
expense
 
to
 
affiliates
 
of
 
EMG
 
was
 
$
5.6
 
million
 
and
 
$
7.1
 
million
 
for
 
the
 
years
 
ended
December
 
31,
 
2023
 
and
 
2022,
 
respectively,
 
and
 
recorded
 
in
 
“Interest
 
expense,
 
net”
 
in
 
the
 
Consolidated
Statement of Operations and Comprehensive Income.
SGI Transaction
 
On September 25, 2023, Energy &
 
Minerals Group, the Company’s controlling stockholder through its ownership
of Coronado Group
 
LLC, including through
 
certain of its
 
affiliates and managed
 
funds (the Sellers),
 
advised the
Company
 
that
 
it
 
had
 
entered
 
into
 
a
 
membership
 
interest
 
purchase
 
agreement,
 
or
 
MIPA,
 
with
 
Sev.en
 
Global
Investments
 
a.s.,
 
or
 
SGI.
 
A
 
copy
 
of
 
the
 
MIPA
 
has
 
not
 
been
 
made
 
available
 
to
 
the
 
Company
 
or
 
the
 
Special
Committee
 
referred
 
to
 
below
 
as
 
of
 
the
 
date
 
of
 
this
 
Annual
 
Report
 
on
 
Form
 
10-K.
 
However,
 
the
 
Company
understands that, pursuant
 
to the terms of
 
the MIPA,
 
the Sellers agreed to
 
sell all of their
 
interests in Coronado
Group LLC to
 
a wholly-owned
 
subsidiary of
 
SGI. We
 
refer to the
 
proposed transaction
 
as the SGI
 
Transaction.
The
 
Company
 
also
 
understands
 
that,
 
under
 
the
 
MIPA,
 
the
 
SGI
 
Transaction
 
is
 
subject
 
to
 
customary
 
closing
conditions including regulatory approvals in the U.S. and Australia.
The Board of
 
Directors has appointed
 
a special committee
 
of independent
 
directors, or the
 
Special Committee,
to, among other things, assess
 
the impact and consequences of the
 
SGI Transaction on the
 
Company and take
such actions as the Special Committee deems appropriate
 
in connection with the SGI Transaction.
The Energy and
 
Minerals Group
 
has reported that
 
following the
 
closing of
 
the SGI Transaction,
 
SGI will
 
be the
direct or indirect
 
owner of Coronado
 
Group LLC. As
 
of the date
 
of this Annual
 
Report on Form
 
10-K, Coronado
Group LLC
 
is currently
 
the direct
 
owner of
845,061,399
 
CDIs (representing
 
a beneficial
 
interest in
84,506,140
shares
 
of common
 
stock,
 
or
50.4
% of
 
the Company’s
 
outstanding
 
total common
 
stock)
 
and the
one
 
Series
 
A
Share.
Based on information that the Company is currently aware of,
 
on completion of the SGI Transaction, a change of
control as defined under the terms of Notes and New
 
ABL Facility may occur. Refer to Note 16. “Interest Bearing
Liabilities” for further information.
Under the
 
Company’s
 
2018
 
Equity
 
Incentive
 
Plan,
 
the
 
change
 
of control
 
provisions
 
may
 
also
 
be
 
triggered
 
on
completion
 
of
 
the
 
SGI
 
Transaction,
 
however
 
the
 
Compensation
 
and
 
Nominating
 
Committee
 
of
 
the
 
Board
 
of
Directors, at its
 
sole discretion, will determine
 
how the outstanding awards
 
under the plan
 
will be dealt
 
with, which
may include acceleration of the vesting conditions.
In
 
addition,
 
certain
 
contract
 
counterparties,
 
including
 
Stanwell,
 
customers,
 
suppliers
 
and
 
third-party
 
providers
may assert
 
contractual rights, such
 
as consent or
 
termination rights that
 
may be triggered
 
by the
 
change of control
resulting from the consummation of the SGI Transaction.
For a number of
 
customers and supplier agreements, including
 
contractor agreements, the completion of
 
the SGI
Transaction
 
may
 
trigger
 
a
 
financial
 
or
 
suitability
 
assessment
 
by
 
the
 
counterparty,
 
which
 
may
 
entitle
 
the
counterparty
 
to
 
terminate
 
the
 
agreement,
 
request
 
further
 
security
 
or
 
seek
 
amendments
 
to
 
the
 
terms
 
of
 
the
agreement.
Coronado Group LLC
Under
 
the
 
Coronado
 
Group LLC
 
agreement
 
(as
 
amended,
 
effective
 
October 23,
 
2018),
2,900
 
management
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
 
designated and authorized
 
units under the
 
initial
formation of
 
Coronado Group LLC
 
were replaced
 
by these
 
new units.
 
At December
 
31, 2023
 
and 2022,
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, 2023
 
and 2022,
 
a
portion of the authorized
 
units have been allocated
 
to various members of the
 
Company’s management including
Mr. Garold Spindler,
 
our former CEO and current Executive Chair, who is also member of Coronado Group LLC.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
151
Stockholder’s Agreement and Registration Rights
 
and Sell-Down Agreement
As
 
of
 
December
 
31,
 
2023,
 
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;
 
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.
28. Material Transactions
Curragh Housing Transaction
On May 8, 2023, the Company entered into an
 
agreement, the Curragh Housing Agreement, for accommodation
services
 
and
 
to
 
sell
 
and
 
leaseback
 
housing
 
and
 
accommodation
 
assets
 
included
 
in
 
property,
 
plant
 
and
equipment.
 
The
 
transaction
 
did
 
not
 
satisfy
 
the
 
sale
 
criteria
 
under
 
ASC
 
606
 
Revenues
 
from
 
Contracts
 
with
Customers
 
and
 
was
 
deemed
 
a
 
financing
 
arrangement.
 
As
 
a
 
result,
 
the
 
Company
 
continues
 
to
 
recognize
 
the
underlying property,
 
plant and equipment on its Consolidated
 
Balance Sheet. Upon completion, the proceeds
 
of
$
23.7
 
million (A$
34.6
 
million) received from the transaction will
 
be recorded as “Other Financial Liabilities”
 
on the
Company’s Consolidated
 
Balance Sheet.
 
The term
 
of the
 
financing arrangement
 
is
ten years
 
with an
 
effective
interest rate of
12.8
%.
 
In connection
 
with this
 
transaction, the Company
 
will borrow an
 
additional amount of
 
$
27.6
 
million (A$
40.4
 
million)
which will
 
be recorded
 
in “Interest
 
Bearing Liabilities”
 
on completion
 
date. The
 
term of
 
the arrangement
 
is
ten
years
 
with an effective interest rate of
12.8
%.
The Curragh Housing Agreement is subject to conditions
 
precedent not satisfied as at December 31, 2023.
 
In line
 
with the
 
Company’s
 
capital management
 
strategy,
 
the above
 
transactions provide
 
additional liquidity.
 
In
addition, the accommodation
 
services component of the
 
Curragh Housing Agreement
 
is anticipated to enhance
the level of service for our employees at our Curragh
 
mine.
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
152
29.
 
Subsequent Events
Ordinary dividends
On
 
February
 
19,
 
2024,
 
the
 
Company’s
 
Board
 
of
 
Directors
 
declared
 
a
 
bi-annual
 
fully
 
franked
 
fixed
 
ordinary
dividend of $
8.4
 
million, or
0.5
 
cents per CDI. The
 
Company is not required
 
to make an offer
 
to purchase Notes
for this dividend due to the available and unaccepted portion of the offer
 
to purchase the Notes previously made
in connection with special dividends declared on October
 
30, 2022.
The dividend will have
 
a record date of
March 12, 2024
, Australia time, and
 
be payable on
April 4, 2024
, Australia
time. CDIs
 
will be
 
quoted
 
“ex”
 
dividend on
 
March
 
11,
 
2024, Australia
 
time. The
 
total ordinary
 
dividend will
 
be
funded from available cash.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
153
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,
 
2023
 
and
 
2022,
 
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, 2023, 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, 2023 and
 
2022, and the results of its
 
operations and its cash flows for
 
each of the
three
 
years
 
in
 
the
 
period
 
ended
 
December
 
31,
 
2023,
 
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, 2023,
 
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 20,
 
2024 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,
 
2023
 
154
Stamp Duty assessment on the acquisition of the
 
Curragh mine
Description
 
of
 
the
matter
As
 
described
 
in
 
Note
 
26
Contingencies
 
to
 
the
 
consolidated
 
financial
 
statements,
 
on
September 27, 2022, the Company received
 
an assessment from the Queensland Revenue
Office (“QRO”) for
 
the stamp
 
duty payable on
 
the Company’s acquisition
 
of the
 
Curragh mine
in March 2018. The
 
QRO assessed the stamp duty
 
on this acquisition at
 
an amount of $56.2
million plus unpaid tax interest, which the Company disputes.
On November 23, 2022, the Company filed
 
an objection to the stamp duty assessment.
 
On
January
 
9,
 
2024,
 
the
 
QRO
 
disallowed
 
the
 
Company’s
 
objection.
 
The
 
Company
 
is
considering its options to either appeal the decision to the Supreme Court of
 
Queensland or
apply
 
for
 
a
 
review
 
of
 
the
 
QRO’s
 
decision
 
by
 
the
 
Queensland
 
Civil
 
and
 
Administrative
Tribunal.
Under the
 
relevant
 
legislation,
 
the
 
Company
 
can only
 
appeal or
 
apply
 
for a
 
review
 
of the
QRO’s decision, if the full amount of the assessed stamp duty
 
(including interest) is paid by
March 11, 2024.
While the Company disputes the amount
 
of assessed stamp duty and interest
 
assessed by
the QRO,
 
it has
 
recorded an
 
additional accrual
 
and expense
 
of $41.3
 
million reflecting
 
the
additional payment the Company is required
 
to make, which may not be recovered
 
through
litigation.
Auditing the
 
accrual for
 
the stamp
 
duty payable
 
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,
 
including
 
the
 
QRO’s
 
decision
 
to
disallow the Company’s objection.
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 payable,
 
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 tax professionals to help us evaluate management’s judgments around the
interpretation and application of the law to this matter.
 
We also evaluated the disclosures made in the consolidated financial statements in relation
to this matter.
/s/
Ernst & Young
We have served as the Company’s auditor
 
since 2020.
Brisbane, Australia
 
February 20, 2024
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
155
ITEM 9.
 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
156
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, 2023, 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, 2023.
 
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,
 
2023
 
157
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,
2023,
 
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, 2023, 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, 2023 and 2022,
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, 2023,
 
and the related
 
notes and our
 
report
dated February 20, 2024 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 20, 2024
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
158
ITEM 9B.
 
OTHER INFORMATION
During
 
the quarter
 
ended
 
December
 
31, 2023,
 
no
 
director
 
or officer
 
(as
 
defined
 
in Rule
 
16a-1(f)
 
promulgated
under the Exchange
 
Act) of the
 
Company
adopted
 
or
terminated
 
a “Rule
 
10b5-1 trading arrangement”
 
or “
non
-
Rule
10b5-1
 
trading arrangement” (as each term is defined in Item
 
408 of Regulation S-K).
 
ITEM 9C.
 
DISCLOSURE REGARDING FOREIGN JURISDICTIONS
 
THAT PREVENT
 
INSPECTIONS
None.
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
159
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 2024
Annual General
 
Meeting of
 
Stockholders, or
 
the Proxy
 
Statement, under
 
the headings
 
“Executive Officers
 
and
Corporate
 
Governance”
 
and
 
“Delinquent
 
Section
 
16(a)
 
Reports”,
 
and
 
is
 
incorporated
 
herein by
 
reference
 
and
made a part hereof from the Proxy Statement.
 
ITEM 11.
 
EXECUTIVE COMPENSATION.
The information required
 
to be furnished
 
by this Item
 
will be set forth
 
in the Proxy Statement
 
under the heading
“Executive
 
Compensation”
 
and
 
is
 
incorporated
 
herein
 
by
 
reference
 
and
 
made
 
a
 
part
 
hereof
 
from
 
the
 
Proxy
Statement.
 
ITEM
 
12.
 
SECURITY
 
OWNERSHIP
 
OF
 
CERTAIN
 
BENEFICIAL
 
OWNERS
 
AND
 
MANAGEMENT
 
AND
RELATED STOCKHOLDER
 
MATTERS.
The
 
information
 
required
 
to
 
be
 
furnished
 
by
 
this
 
Item
 
will
 
be
 
set
 
forth
 
in
 
the
 
Proxy
 
Statement
 
under
 
the
heading “Security
 
Ownership
 
of
 
Certain
 
Beneficial
 
Owners
 
and
 
Management”
 
and
 
is
 
incorporated
 
herein
 
by
reference and made a part hereof from the Proxy Statement.
 
ITEM 13.
 
CERTAIN RELATIONSHIPS AND RELATED
 
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required to be furnished by this Item will be set forth in
 
the Proxy Statement under the headings
“Certain
 
Relationships
 
and
 
Related
 
Transactions”
 
and
 
“Executive
 
Officers
 
and
 
Corporate
 
Governance”
 
and
 
is
incorporated herein by reference and made a part hereof from
 
the Proxy Statement.
 
ITEM 14. PRINCIPAL
 
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
 
Ernst & Young as the Company’s Independent Registered Public
 
Accounting Firm
for the Fiscal Year
 
Ending December 31, 2024” and is
 
incorporated herein by reference and made a
 
part hereof
from the Proxy Statement.
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
160
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
 
114
 
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 Annual Report on Form
 
10-K
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
 
(filed
 
as
 
Exhibit
 
4.1
 
to
 
the
 
Company’s
 
Registration
Statement
 
on
 
Form
 
10
 
(File
 
No.
 
000-56044)
 
filed
 
on
 
April
 
29,
 
2019
 
and
 
incorporated
herein by reference)
4.2
4.3
4.4
4.5
10.1
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
161
Exhibit No.
Description of Document
10.2†‡
10.3
10.4‡
10.5‡
10.6
10.7
10.8>‡
10.9>
10.10>‡
10.
11
>‡
10.12>
10.13>‡
10.14>‡
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
162
Exhibit No.
Description of Document
10.15>
10.16>
10.17>
10.18>
10.19>
10.20>
10.21>
10.22>
10.23‡
10.24‡
10.25‡
10.26
10.27
10.28
10.29†‡
21.1
23.1
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
163
Exhibit No.
Description of Document
23.2
23.3
23.4
23.5
31.1
31.2
32.1
95.1
96.1
96.2
96.3
96.4
101
The following materials from the Company’s Annual Report on Form 10-K for the period
ended December
 
31,
 
2023,
 
formatted
 
in
 
iXBRL
 
(Inline
 
Extensible
 
Business
 
Reporting
Language): (i) Consolidated Balance
 
Sheets, (ii) Consolidated
 
Statements of Operations
and Consolidated Statements of
 
Comprehensive Income, (iii)
 
Consolidated Statements
of Stockholders’ Equity/Members’ Capital, (iv) Consolidated
 
Statements of Cash Flows,
(v) related notes to these financial statements and (vi)
 
document and entity information
104
Cover Page
 
Interactive Data
 
File (the cover
 
page XBRL
 
tags are embedded
 
within the
Inline XBRL document)
 
____________________
*
 
Portions of this
 
exhibit have been omitted
 
pursuant to Item 601(b)(2)(ii)
 
of Regulation S-K,
 
which portions
will be furnished to the Securities and Exchange Commission
 
upon request.
 
Certain schedules and exhibits to this
 
agreement have been omitted pursuant to Item
 
601(a)(5) and Item
601(a)(6)
 
of
 
Regulation
 
S-K.
 
A
 
copy
 
of
 
any
 
omitted
 
schedule
 
and/or
 
exhibit
 
will
 
be
 
furnished
 
to
 
the
Securities and Exchange Commission upon request.
 
 
Portions
 
of
 
this
 
exhibit
 
have
 
been
 
omitted
 
pursuant
 
to
 
Item
 
601(b)(10)(iv)
 
of
 
Regulation
 
S-K,
 
which
portions will be furnished to the Securities and Exchange Commission
 
upon request.
 
>
 
Management contract, compensatory plan or arrangement
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
164
ITEM 16.
 
FORM 10-K SUMMARY
None.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc. Form 10-K December 31,
 
2023
 
165
SIGNATURES
Pursuant to the
 
requirements of
 
Section 13
 
or 15(d) of
 
the Securities
 
Exchange Act
 
of 1934, the
 
registrant has
duly caused this report to be signed on its behalf by the undersigned,
 
thereunto duly authorized.
Coronado Global Resources Inc.
(Registrant)
By:
/s/ Douglas Thompson
Douglas Thompson
Managing Director and Chief Executive Officer (as
 
duly
authorized officer and as principal executive officer
 
of
the registrant)
Date: February 20,
 
2024
Pursuant to the requirements
 
of the Securities Exchange
 
Act of 1934, this
 
report has been
 
signed below by
 
the
following persons, on behalf of the registrant and in the
 
capacities and on the dates indicated.
Name
Title
Date
/s/ Douglas Thompson
Managing
 
Director
 
and
 
Chief
 
Executive
Officer (Principal Executive Officer)
February 20, 2024
Douglas Thompson
/s/ Gerhard Ziems
Group
 
Chief
 
Financial
 
Officer
 
(Principal
Financial Officer and Principal Accounting
Officer)
February 20, 2024
Gerhard Ziems
/s/ Garold Spindler
Director
February 20, 2024
Garold Spindler
/s/ William Koeck
Director
February 20, 2024
William Koeck
/s/ Philip Christensen
Director
February 20, 2024
Philip Christensen
/s/ Greg Pritchard
Director
February 20, 2024
Greg Pritchard
/s/ Laura Tyson
Director
February 20, 2024
Laura Tyson
/s/ Aimee R. Allen
Director
February 20, 2024
Aimee R. Allen
/s/ Jan C. Wilson
Director
February 20, 2024
Jan C. Wilson