Malcolm Roberts : Yes. It’s Mal. I’ll take that one. Look, we’re very comfortable with the way that we sold and the level that we’re sold to. I think in terms of the market this year, we might see the generators going to the spot market to a lesser degree than they have in previous years, but we’re pretty comfortable with our contracted level and getting that delivered.
Operator: The next question comes from Chris LaFemina of Jefferies.
Chris LaFemina : So just actually a couple of questions around the met coal business and around capital allocation. So you have the ramp-up of North Goonyella, which I assume is going to be premium low-vol product that gets benchmark pricing. Is that accurate?
Malcolm Roberts : Absolutely. In my opinion, a lot of people’s opinion is this is the supreme coal, lead top level coal and most likely at the top level or at a premium.
Chris LaFemina : And is that true over the reserve life of the asset? Or does the quality degree over time?
Jim Grech: That’s very true of the hold off of the asset. And the words well reserve addition is the same type of quality. So we don’t expect any degradation in the quality at all as we transfer from the old North Goonyella reserves to the Wards Well reserves, same quality.
Chris LaFemina : That’s very encouraging. So the markets are beginning to believe in kind of stronger for longer met coal pricing. And you’re generating cash flow now, you’re pivoting to growth in met coal you have fairly substantial organic growth, but would you consider looking at M&A opportunities, particularly in met coal, if they were to arise? Or is really the focus now on delivering the organic growth projects and continuing with the capital returns?
Jim Grech: Yes. Chris, our focus is on delivering the shareholder returns and the organic growth is always the topic of our list because it’s the least risk. We have the most control over that. And that continues to be our focus internally. Now as M&A comes along, we opportunistically look at anything that comes our way. We always take a look at it, Chris. Now how active we are as a different thing. But as things come our way, we take a look at it and then make a determination if it could benefit our shareholders or not, but it’s down the list. Organic opportunities are at the very top of the list.
Chris LaFemina : Yes. What’s nice about the buyback is that you’re basically increasing your production on a per share basis at a low valuation and is ramping up met coal volumes and reducing your share count. The leverage of the met coal market obviously becomes much greater. So we — just an observation, we definitely like that, and good luck with it all.
Jim Grech: Thank you, Chris. That’s the exact same observation we have too.
Operator: The next question comes from Michael Dudas of Vertical Research Partners.
Michael Dudas : Two questions. First on thermal U.S. Jim, you mentioned about some — and we’ve seen in the markets some coal plants closures being deferred given the dynamics on grid and reliability, etcetera. Maybe you could share with us like relative to maybe 6 to 12 months ago and how you’re looking at your customer base? And has there been any major changes on over the next several years or maybe even sooner, the retirement on your customers and where you’re selling the coal, does that change? Is that maybe it will lengthen the opportunity to monetize your reserves in the U.S.? Just wanted to get a thought about that.
Jim Grech: Mike, the discussions we have with our customers is — one of the things that we’ve noticed is now desires to have longer-term contracts put in place because of the combination of the concern about the reliability of supply and the potential for plants having longer lives than was originally thought to be the case. And I would say that the conversations we’re having with our customers and what we’re seeing is plants that maybe we’re going to close in the next few years, looking at them going out to 29 or 30. It’s not — nobody is making commitments or predictions gone that, but it is a very good trend to see that — see that occurring. And again, because I’m sure you know that this year is reliability, right? The reliability of the grid backed up by baseload power and the need to keep these points around to do that. So it’s an encouraging start getting us through stronger through the end of this decade, and we’ll see where it leads to from there.
Michael Dudas : I appreciate those thoughts. Secondly, as you know a little bit of market intelligence on your part, as you look out maybe to the second half of this year, do you think there’s a better chance for the thermal markets to recover nicely or see pressure on the seaborne net side, given where fundamentals are I agree with Chris is out about the short scarcity of met coal, but how are you thinking given what you’re seeing? And is relative to, of course, the hives and gas prices, how that plays through with on the supply side and such for move over the next 6, 12 months?
Jim Grech: Yes, Mike, before we answer to make sure we got the question clear. Are you talking about seaborne thermal and seaborne met and between them and —
Michael Dudas : Yes.
Malcolm Roberts : Yes, Sure. I’ll take that. When it comes to the seaborne met market, we are quite encouraged by what we saw during Q4 with increased crude steel production rates outside of China, and we expect those rates to continue during Q1 and into Q2. And we also are encouraged in the metallurgical coal space by very constrained supply. So supply having got back to those 2019 levels, which we use as a bit of a baseline to look at that. And we still see supply challenge moving through 2024. Turning to Thermal coal. Newcastle Coal is in — is in solid demand. However, at times, we get a little ahead of the demand. So we sit right now with prices around $120. We think that supply is a little ahead. We had quite a strong supply growth out of East Coast Australia during Q4.
