The market may be racing higher today but the same cannot be said for the Whitehaven Coal Ltd (ASX: WHC) share price.
In afternoon trade, the coal miner's shares are down 6.5% to $7.79.
This compares unfavourably to the ASX 200 index and its 2.4% gain.
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Why is the Whitehaven Coal share price sinking?
Investors have been hitting the sell button on Friday amid concerns that booming coal prices could attract additional taxes.
With Whitehaven Coal and fellow coal miner New Hope Corporation Limited (ASX: NHC) generating bumper profits while Australians prepare for huge increases in energy prices, the Federal Government is considering stepping in.
When asked about the potential for a new temporary tax on gas and thermal coal, Prime Minister Anthony Albanese commented:
Well, what we know is that we can't just sit back and watch while energy prices go through the roof for households and for businesses. And that could undermine the manufacturing sector, it's already placing extraordinary pressure on it. We are trying to work through these issues. We want to work in a cooperative way. But we need to acknowledge that there are extraordinary profits being made at the same time as the customers are really doing it tough.
If this became a reality it would likely lead to lower than forecast earnings and dividends for coal miners. Though, there's no guarantee that these taxes will be introduced. We'll just have to wait and see!
