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Why the Whitehaven Coal share price is tumbling today

The Whitehaven Coal Ltd (ASX: WHC) share price is down 1.47% this morning after the release of the group’s latest quarterly activities report.

What did Whitehaven report this morning?

The ASX 200 coal miner’s shares fell lower at market open after a disappointing quarter ended 31 December 2019.

Whitehaven reported its managed ROM coal production slumped 58% lower compared to the prior corresponding period (pcp) to just 3,124 thousand tonnes.

The miner’s year-to-date (YTD) production fell 31%, and it was a similar story for its managed saleable coal production, which fell 44% on pcp.

These weak production figures saw produced coal sales fall 30% on pcp while purchased coal sales surged 162% on pcp.

It wasn’t just Whitehaven’s managed sites that saw lower figures, as sites with equity stakes also struggled. Equity ROM coal production plummeted 56% on pcp while saleable coal production fell 42% compared to Q4 2018. In total, managed coal sales and equity coal sales fell 17% and 11% on pcp, respectively.

Labour shortages, drought conditions and the ongoing bushfires had a big impact on Whitehaven’s operations in Q4 2019. The Whitehaven share price has also slumped in recent times as water shortages have made entitlements a key issue.

Positively for shareholders, Whitehaven’s FY20 guidance remains unchanged from its updated guidance on 5 December 2019.

Why else is the Whitehaven share price falling lower?

This morning’s share price slump comes as the S&P/ASX 200 Index (INDEXASX: XJO) passes the 7,000 point mark for the first time ever.

Also pressuring the Whitehaven share price is yesterday’s announcement by BlackRock that it would divest its coal investments from its US$7 trillion portfolio.

That means dumping more than half a billion dollars worth of investments from its passive investment funds in the likes of Whitehaven.

As we head towards the February reporting season, the ASX coal miners are worth watching on the back of these weaker production numbers and broader industry pressures.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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