ITEM 1A.
RISK FACTORS.
An investment
in our
securities
is speculative
and involves
a number
of risks.
believe
the risks
described
below are the
material risks most
likely to affect
the Company.
However,
the risks described
below may not
the
only
risks
that
face.
Additional
unknown
risks
risks
that
currently
consider
immaterial
may
also
impair our business operations. You should carefully consider the specific risk factors discussed below,
together
with the information contained in this Annual Report on Form 10-K, including
Item 7. “Management’s Discussion
and Analysis of Financial
Condition and Results of
Operations” and our Consolidated
Financial Statements and
the related notes
to those statements
included elsewhere in
this Annual Report
on Form 10-K.
If any of
the events
or circumstances described below actually occurs,
our business, financial condition or
results of operations could
suffer, and the trading price
of our securities could decline significantly in future
periods.
Some of these principal risk factors include:
Concerns
about
the
environmental
impacts
coal
combustion,
including
possible
impacts
global
climate
issues,
are
resulting
increased
regulation
coal
combustion
and
coal
mining
many
jurisdictions, which could adversely impact our financial
condition or results of operations;
We face
risks from
both the
global transition
net-zero emissions
economy and
the potential
physical
impacts of climate change;
Our business may be materially
and adversely affected by the impact
on the global economy due
to, among
other events, significant geopolitical tensions, including ongoing
civil unrest or wars, or pandemics
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 our profitability;
Evolving tariffs,
regulations
and
other
restrictions
international
trade
may
impact
our ability
access
international markets and impact our ability
to plan for future investments, which
could adversely affect our
financial condition and results of operations;
transportation
for
our
coal
becomes
unavailable
uneconomical
for
our
customers,
our
ability
sell
coal could suffer;
Take-or-pay
arrangements within the coal industry could unfavorably
affect our profitability;
decrease
the
availability
increase
costs
key
supplies,
capital
equipment,
commodities
and
purchased components, such
as diesel
fuel, steel,
explosives and
tires, could materially
and adversely
affect
our financial condition and results of operations;
Defects
title
loss
any
leasehold
interests
our
properties
could
limit
our
ability
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
mining
operations
could
impact
the
amount
coal
produced,
cause
delays
suspension of coal deliveries, or increase the cost of operating
our business;
Our
long-term
success
depends
upon
our
ability
continue
discovering,
acquiring
and
developing
assets containing, coal reserves that are economically
recoverable
rely
estimates
our
recoverable
resources
and
reserves,
which
are
complex
due
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
replace
repair
damaged
destroyed
equipment
facilities
timely
manner
could
materially and adversely affect our financial condition and results
of operations;
Our
ability
operate
effectively
could
impaired
lose
key
personnel
fail
attract
qualified
personnel;
We may not have adequate insurance coverage
for some business risks;
Cybersecurity
incidents,
attacks
and
other
similar
crises
disruptions
could
interrupt
disrupt
our
information technology
systems,
or those
of our
third-party
business
partners,
which could,
among other
things, negatively affect our business, financial condition
and results of operations;
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Coronado Global Resources Inc. Form 10-K December 31,
The
loss
significant
reduction
purchases
our
largest
customers
could
adversely
affect
our
revenues;
Changes
in credit
ratings
issued
nationally
recognized
statistical
rating
organizations
could
adversely
affect our cost of financing and the market price of our
securities;
Our existing
and future
indebtedness
may limit
cash
flow available
to invest
in the
ongoing
needs of
our
business,
which
could
prevent
from
fulfilling
our
obligations
under
our
senior
secured
notes
the
ABL
Facility and other debt, and we
may be forced to take other
actions to satisfy our obligations under
our debt,
which may not be successful;
adjust
our
capital
structure
from
time
time
and
may
need
increase
our
debt
leverage,
which
would make us more sensitive to the effects of economic
downturns;
Our
business
requires
substantial
ongoing
capital
expenditures,
and
may
not
have
access
the
capital required to reach full productive capacity at our mines;
Risks
related
our
investment
WICET
may
adversely
affect
our
financial
condition
and
results
operations;
Restrictions and limitations
related to our coal
supply agreements with
Stanwell may adversely
impact our
strategy, financial
condition,
results of operations and business;
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 adversely affected;
the
assumptions
underlying
our
provision
for
reclamation
and
mine
closure
obligations
prove
inaccurate, we could be required to expend greater amounts
than anticipated;
are
subject
extensive
health
and
safety
laws
and
regulations
that
could
have
material
adverse
effect on our reputation and financial condition and results
of operations;
We could be negatively affected if we fail to maintain
satisfactory labor relations;
Our
operations
may
impact
the
environment
cause
exposure
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.
Sustainability Risks
Concerns
about
the
environmental
impacts
coal
combustion,
including
possible
impacts
global
climate
issues,
are
resulting
increased
regulation
coal
combustion
and
coal
mining
many
jurisdictions, which could adversely impact our financial
condition or results of operations.
Global concerns
about climate
change
continue 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
countries,
including
Australia
and
the
United
States,
have
already
introduced,
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: (i)
the combustion
of coal
by our
customers in coal-fired electricity generation, coke
plants, and steelmaking; (ii) combustion of fuel by equipment
used in coal production and to
transport our coal to our customers;
and (iii) coal mining itself, which can
release
methane,
more
potent
GHG
than
carbon
dioxide,
directly
into
the
atmosphere.
These
emissions
from
coal
consumption,
transportation
and
production
are
subject
active,
pending
and
proposed
regulation
the
jurisdictions in which we operate as part of initiatives to
address global climate change.
result,
numerous
proposals
have
been
made
and
are
likely
continue
made
the
international,
national, regional and state levels of government to monitor
limit and reduce emissions of GHGs.
For Example,
in accordance
with the
Australian Federal
Government’s
Safeguard
Mechanism,
Curragh has
production-adjusted (intensity) baseline for covered emissions (Scope
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Coronado Global Resources Inc. Form 10-K December 31,
In early 2025, the Curragh Complex entered into a five-year monitoring period
or MYMP.
The MYMP allows the
Curragh complex, given
the challenges for
abatement within
the industry, to implement
projects that progressively
reduce its emissions, achieving compliance with the
Safeguard baseline.
By the end of the MYMP,
Curragh is required to have taken action to keep its net Scope 1 emissions at or below
the baseline
through emissions
reduction projects
for example,
purchasing and
surrendering
Safeguard
Mechanism Credits (SMCs) or Australian
Carbon Credit Units (ACCUs), or face enforcement
measures.
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.
The
market
for
our
coal
may
adversely
impacted
comprehensive
legislation
regulations
focusing
GHG
emission
reductions
are
adopted,
particularly
they
directly
indirectly impact the
Met coal
industry.
The potential financial
impact on
such future legislation
or regulations
will depend upon
the degree to
which any such
legislation or regulations
impose costs
our customers,
cause
our
customers
diminish
their
reliance
coal.
That,
turn,
will
depend
number
factors,
including
the
specific
requirements
imposed
any
such
legislation
regulations
and
the
time
periods
over
which such legislation or
regulations would be
phased in. Collectively,
these initiatives and developments
could
result in
higher costs
or our
customers
or lower
the demand
for coal,
which
could
adversely
impact
our
business.
We face risks from both the
global transition to a net-zero emissions economy and
the potential physical
impacts of climate change.
We face risks from both the global transition to
a net-zero emissions economy and the potential physical impacts
of climate change.
Such risks
may involve financial,
policy,
legal, technological,
reputational and
other impacts
as we meet various mitigation and adaptation requirements.
The transition to a net-zero emissions economy is driven by
many factors, including, but not limited to, legislative
and regulatory rulemaking processes, campaigns undertaken by non-governmental organizations to minimize or
eliminate
the
use
coal,
and
the
sustainability-related
policies
financial
institutions
and
other
private
companies. We have
experienced, and may in
the future experience,
negative effects on our
results of operations
due to the
following specific
risks: electricity
generators or
steelmakers switching
from coal
to alternative
fuels,
when
feasible;
increased
costs
associated
with
regulatory
compliance;
unfavorable
impact
regulatory
compliance on supply and demand fundamentals, such as limitations on financing or construction
of new mining
operations;
unfavorable
costs
capital
and
access
financial
markets
and
products
due
the
policies
financial institutions; disruption to operations
or markets due to anti-coal activism
and litigation; and reputational
damage associated with involvement in GHG emissions.
We and
our customers
may also
have to
invest in
carbon-capture, usage
and storage
technologies in
order to
mine or
burn 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 the
market and
customers to
reduce
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.”
With respect to
the potential
or actual physical
impacts of climate
change, we
have experienced,
or may in
the
future experience, negative
effects on our results
of operations due to the
following specific risks:
disruptions to
production and transportation,
including as a
result of extreme wet
weather events; disruption
to water supplies
vital
mining
operations;
and
damage
our,
our
customers’
our
suppliers’
equipment,
third-party
infrastructure, resulting from adverse weather conditions
or changes in environmental trends and conditions.
Such risks from both the global transition to a net-zero emissions economy and the potential physical impacts
climate change could result in adverse impacts on our
financial condition or results of operations.
times
drought
and/or
shortage
available
water,
our
operations
and
production,
particularly
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 rights
to the
use, control,
and flow
of water
are vested
in the
state and
regulated under
the
Water
Act
(Qld).
Water
allocations
made
under
this
legislation
are
managed
operators,
such
SunWater Ltd, who administer their supply
through designated schemes.
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For our
Curragh
Mine, we
have
secured
the
required
water
allocations
from SunWater
Ltd and
formalised
delivery
arrangements
through
infrastructure
agreements,
including
channel,
pipeline,
and
river
supply
agreements.
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.
possible that
during times
of drought
our water
offtake entitlements
in Australia
could
be reduced. If
our water offtake
entitlement is reduced,
our 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 financial condition and results of
operations.
Economic, Competitive and Industry Risks
Our
business
may
materially
and
adversely
affected
the
impact
the
global
economy
due
among
other
events,
significant
geopolitical
tensions,
including
ongoing
civil
unrest
wars,
pandemics.
Geopolitical tensions, including ongoing civil unrest and wars, and global
pandemics or widespread public health
concerns can have
a significant impact
on global markets,
including influencing both
the supply of
and demand
for 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
continuing
experience
volatility
and
disruption
with
current
geopolitical
tensions and
the military
invasion of
Ukraine by
Russia. This
military conflict
has led
to ongoing
sanctions and
other
penalties
being
levied
the
United
States,
the
European
Union
and
other
countries
against
Russia,
including expansive bans on imports and exports of products
to and from Russia.
addition,
international,
federal,
state
and
local
public
health
and
governmental
authorities’
mandates
response to global
pandemics could require
forced shutdowns
of our mines
and other facilities
in Australia
and
the U.S. for extended periods, and the implementation of social distancing protocols and restrictions on traveling
overseas
across
borders
(including
interstate),
affecting
number
our
normal
business
practices
and
operations. These
conflicts or pandemics
could cause disruptions
to mining operations,
manufacturing operations
and supply chains around the world.
The extent and duration of such
conflicts or pandemics could lead to market
disruptions, including
significant volatility
in commodity prices,
such as the
prices of the
coal we sell
and diesel
fuel
purchase,
instability
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
receive. Prices and
quantities under Met
coal sales contracts
with North American
customers are generally
based
expectations
the
next
year’s
coal
prices
the
time
the
contract
entered
into,
renewed,
extended
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
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.
Expectations
regarding
future
prices
for
coal
depend
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;
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adverse weather conditions in
our markets that
affect our ability to
produce Met coal
or affect the demand
for thermal coal;
competition from other coal suppliers;
technological advances affecting the steel production
process and/or energy consumption;
the costs, availability and capacity of transportation infrastructure;
and
the impact
of domestic
and foreign
governmental policy,
laws and
regulations, including
the imposition
of and changes
in tariffs, environmental
and climate change
regulations and
other regulations affecting
the
coal
mining
industry,
including
regulations
and
measures
introduced
response
global
pandemics.
Met coal
continues to
volatile commodity.
The demand
and supply
in the
Met coal
industry changes
from
time to time. There are no assurances that an oversupply of coal 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
local coal production, particularly in the leading Met coal import countries of China and India, among others, and
the
competitiveness
seaborne
Met
coal
supply,
including
from
the
leading
Met
coal
exporting
countries
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
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
number of
factors,
including: the
cyclical nature
of the
steel 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 allow
other products to 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. For
example, an alternative steelmaking process utilizing electric arc furnaces does not use coal as a manufacturing
input and accounted for 29.1% of steel production in 2024.
In addition, 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.
We face increasing competition, which could adversely
affect our profitability.
Competition
the
coal
industry
based
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
result
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
and distribution
resources, among
other resources,
than we do and may be subject to less stringent environmental
and other regulations than we are.
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The
ongoing
consolidation
the
global
Met
coal
industry
has
contributed
increased
competition,
and
our
competitive
position
may
adversely
impacted
further
consolidation
among
market
participants
competitors
exiting
bankruptcy
proceedings
under
lower
cost
structure.
Similarly,
potential
changes
international trade agreements,
trade concessions or
other political and
economic arrangements may
benefit coal
producers
operating
countries
other
than
the
United
States
and
Australia.
Other
coal
producers
may
also
develop
acquire
new
projects
increase
their
coal
production,
which
may
adversely
impact
our
competitiveness.
Some
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
non-U.S.
and
non-Australian
customers
depends
port
and
transportation
capacity.
Increased
competition
within
the
Met
coal
industry
for
international
sales
could
result
not
being
able
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.
Evolving tariffs, regulations and other
restrictions on international trade
may impact our ability
to access
international markets and impact our ability to
plan for future investments, which could
adversely affect
our financial condition and results of operations.
The majority
of the
Met coal
produced by
our Australian
Operations is
exported by
seaborne transportation
steel producers
(primarily in
Asia). 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).
Our access to international markets may be subject to ongoing interruptions and trade barriers
due to policies of
individual
countries,
and
the
actions
certain
interest
groups
restrict
the
import
export
certain
commodities. In
addition, the
Met coal
that we
export may
be subject
to tariffs.
For example,
during February
2025, the Chinese government announced tariffs on coal imported from
the U.S.
There can be no guarantee that
additional tariffs,
import quota restrictions,
bans or other
trade barriers will
not be imposed
(whether as a
result
of geopolitical tensions
or for other reasons)
on our products or
on steel.
We may or
may not be able to
access
alternate markets for our coal
should interruptions and trade
barriers occur in the future,
and we may be unable
to pass the costs of tariffs on to our customers.
An inability
for Met
coal suppliers
to access
international markets
may also
result in
an oversupply
of Met coal
and may
result
decrease
in prices
or the
curtailment
production,
which
could
have a
material
adverse
effect on our financial
condition and results of
operations. Additionally,
tariffs imposed by the
U.S. on the import
of certain
steel products
may impact
foreign steel
producers to
the extent
their production
is imported
into the
Future
tariffs
changes
tariffs
could
also
further
reduce
imports
steel
and
increase
Met
coal
demand from
U.S. steel
producers. This
additional U.S.
Met coal
demand could
be met
by reducing
exports of
Met coal from our U.S. operations and redirecting that
volume to domestic consumption.
Restrictions on international trade, including tariffs established by the U.S. and retaliatory tariffs from key trading
partners, may limit international
trade and adversely impact
global economic conditions. We
have taken actions
address
the
impact
evolving
trade
policies
and
will
continue
monitor
evolving
trade
negotiations
determine
additional
measures
are
warranted,
although
these
actions
may
not
successful.
cannot
determine
the
impact,
any,
that
such
restrictions
and
tariffs
may
have
demand
for
our
Met
coal.
These
conditions
could result
in continuing
uncertainty
regarding
our ability
to access
international
markets and
may
limit our ability
to plan for
future investments, which
could adversely
affect our
financial condition and
results of
operations.
If transportation for our coal becomes unavailable or uneconomical for our customers,
our ability to sell
coal could suffer.
Our coal is transported to customers by a combination
of road, rail, barge and ship.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
coal
from
the
mine
port
the
point
use,
have
entered
into
arrangements
with
third
parties
gain
access
transportation
infrastructure
and
services
where
required,
including trucking companies, rail carriers and
port owners. Where coal is exported
or sold other than at
the mine
gate,
the
costs
associated
with
these
arrangements
represent
significant
portion
both
the
total
cost
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 cost increases to our customers. For example, where
transportation costs are
connected
market
demand,
costs
may
increase
usage
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.
the
transportation
capacity
secured
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).
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
revoked
or not
granted by regulatory authorities;
changes in applicable regulations;
failure or delay in the construction of new rail or port capacity;
and
terrorist attacks,
natural disasters,
the impact
from global
pandemics,
government
shutdowns or
other
events.
Any
such
disruptions,
any
deterioration
the
reliability
services
provided
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.
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, currently
with Aurizon Operations and Pacific
National Pty Ltd,
for transport to and export
from the Port of Gladstone
via
two main port terminals, RGTCT and WICET.
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
is not
utilized by
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
varying
unforeseen
circumstances,
including
insufficient
production
from
given
mine,
mismatch
between the
timing of
required port
and rail
capacity
for a
mine, or
an inability
to transfer
the unused
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
loaded
onto
trains
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
Financial
Condition
and
Results
Operations”
for
summary of our expected future obligations under take
-or-pay arrangements as of December 31, 2025.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
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 increase
significantly,
source
for these
supplies
or mining
equipment
is unable
to meet
our replacement
demands,
our profitability
could
reduced or we could experience a delay or halt in our
production.
Prices for
equipment, materials, supplies
and employee
labor contractor
services have
recently increased. Similar
to recent
years, 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,
cost
savings,
which
may
adversely
impact
our
financial
condition,
results
operations,
liquidity,
and
cash
flows.
Our coal production and production costs can be materially and adversely impacted by unexpected shortages or
increases in the costs of consumables, spare parts,
plant and equipment. For example, operation
of the thermal
dryer located at
the CPP at
Buchanan is dependent
upon the delivery
of natural gas
and there is
currently only
one natural gas supplier
in the area. Although
we have entered into
a gas purchase agreement
with that supplier,
this
agreement
can
terminated
30 days’
notice
and
any
delay
inability
negotiate
replacement
agreement
would
impact
our
costs
production
would
need
change
our
processing
method
Buchanan.
Defects in
title or
loss of
any leasehold
interests in
our properties
could limit
our ability
to mine
these
properties or result in significant unanticipated costs.
In Queensland,
where all
of our
Australian Operations
are carried
out, exploring
or mining
for coal
is unlawful
without a tenement granted by the Queensland
government. The grant and renewal of tenements
are subject to
a regulatory regime and each
tenement is subject to certain
conditions. There is no certainty
that an application
for the grant of a
new tenement or renewal
of one of the
existing Tenements
at Curragh will be
granted at all or
satisfactory
terms
within
expected
timeframes.
Further,
the
conditions
attached
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
Australian 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, 2026 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.
the
United
States,
title
leased
property
and
mineral
rights
generally
secured
prior
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
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. Certain 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 certain rare
cases, could result in a
loss of
the lease itself.
the
United
States,
predominantly
access
our
mining
properties
through
leases
with
range
private
landholders. If
a default
under a
lease for
properties on
which we
have mining
operations were
to result
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.
obtain
leases
mining
contracts
conduct
our
Operations
properties
where
defects
exist
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
maintain
our
leasehold
interests
properties
where
have
not
commenced
mining
operations during the term of the lease.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
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
and
our
expansion
and
growth
projects.
Examples
regulatory
approvals
that
must
obtain
and
maintain
include
mine
development
approvals,
environmental
permits
and,
Australia,
tenure
and
approvals
relating
native
title
and
indigenous
cultural
heritage.
addition,
our
operations
depend
our
ability
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
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
manner
which
will result
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. 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 has unabated permit
violations or has 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, deny the issuance of additional
permits or modify or amend existing permits.
The permitting required for coal mining
continues to be the subject
increasingly
stringent
regulatory
and
administrative
requirements
and
extensive
activism
and
litigation
environmental
groups.
this
trend
continues,
could
materially
and
adversely
affect
our
mining
operations,
development and
expansion plans,
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.
Additionally,
may
rely
nationwide
permits
under
the
Section 404
program
the
CWA
for
some
our
operations. These nationwide permits are issued every five years.
If we are unable to use
the nationwide permits
program and require an individual permit for certain work,
that could delay operations.
are unable
to obtain
and maintain
the approvals,
consents and
rights required
for our
current and
future
operations,
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.
shortage
skilled
labor
the
mining
industry
could
pose
risk
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
our production,
particularly
in the
event there
increase
in the
demand
for our
coal,
which could adversely affect our financial condition
and results of operations.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Operational and Technology
Risks
Risks
inherent
mining
operations
could
impact
the
amount
coal
produced,
cause
delays
suspension of 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
delays in or
suspension of coal
deliveries, or increase
the cost of mining
for
varying
length
time.
Our
financial
performance
dependent
our
ability
sustain
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
significant impact on our financial results. Adverse operating
conditions and events that we have experienced
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;
cyberattacks or
other cybersecurity
incidents that
could disrupt
systems we
rely on
for our
operations;
and
other 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
our
part
deliver
coal
the
purchaser
under
such
contracts
could
result
economic
penalties,
demurrage
costs,
suspension
cancellation
shipments
ultimately termination
of such
contracts, which
could
have a
material adverse
effect
on our
financial condition
and results of operations.
Our U.S.
Operations
are concentrated
in two
mines
in the
CAPP,
and
our Australian
Operations
include
two
open cut mines (Curragh North and Curragh South)
and one underground mine (Mammoth) in the Bowen
Basin
of Australia.
result, the
effects of
any of
these conditions
or events
may be
exacerbated and
may have
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
serving our
mining activities,
as well as the infrastructure that supports freight
and logistics). These conditions and events could
also result in
the
partial
complete
closure
particular
railways,
ports
significant
inland
waterways
sea
passages,
potentially resulting in higher costs, congestion, delays or cancellations on certain transport routes.
Any of these
conditions or events could adversely impact our business
and results of operations.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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,
addition to
our mineral reserves.
In addition,
ASX-listed company, our ASX disclosures
follow the Australian
Code
for
Reporting
Exploration
Results,
Mineral
Resources
and
Ore
Reserves
the
JORC
Code.
Accordingly,
our estimates
of resources
and reserves
in this
Annual Report
on Form
10-K and
in other
reports
that
are
required
file
with
the
SEC
may
different
than
our
estimates
resources
and
reserves
reported in our ASX disclosures.
Coal
economically
recoverable
when
the
price
which
can
sold
exceeds
the
costs
and
expenses
mining
and
selling
the
coal.
The
costs
and
expenses
mining
and
selling
the
coal
are
determined
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
affected
changes
mine
planning
scheduling over
time. There
are numerous
uncertainties
inherent in
estimating
quantities
and qualities
of coal
and
costs
mine
recoverable
reserves,
including
many
factors
beyond
our
control.
There
are
inherent
uncertainties and risks associated with such estimates, includi
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;
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
mineral
resources
classified
mineral
reserves,
mineral
resources
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 and the quantity
and quality
the coal
that
we recover
may be
less
than the
resource
and reserve
estimates
included
this
Annual Report
on Form
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
costs, our
financial
condition and results
of operations may be materially and adversely affected.
Our
profitability
could
affected
adversely
the
failure
suppliers
and/or
outside
contractors
perform.
We use contractors and
other third parties for
exploration, mining and other
services generally, and we are reliant
on several
third parties
for the
success of
our current
operations and
the development
of our
growth projects.
While this is normal
practice for the mining industry, problems caused by third
parties may arise, which may
have
an impact on our performance and operations. In particular,
the majority of workers at our Australian Operations
are employed by contractors, including Thiess Pty Ltd, Golding Contractors
Pty Ltd and Mammoth Underground
Mine Management Pty Ltd.
Operations
our
mines
may
interrupted
for
extended
period
the
event
that
lose
any
our
key
contractors (because their contract is
terminated or expires) and we
are required to replace them. There can
no assurance that skilled third parties or contractors will continue to be available at reasonable rates or at all. 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
comply with
their
obligations
under our
operating agreements
with them
(whether as
a result
of financial,
safety or
operational difficulties
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
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
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
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
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, workforce
or services available for us.
Suppliers
and
manufacturers
may be
unable
provide
such
equipment,
work
force
or service
for
range
reasons that are beyond our control.
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
lose key
personnel
or fail
attract qualified
personnel.
We manage our business with a number of key personnel, the
loss of whom could affect our future performance,
absent the completion of an orderly
transition. In addition, we believe that
our future success will depend on
our
continued
ability
attract
and
retain
highly
skilled
and
qualified
personnel
tight
labor
markets,
particularly
personnel
with
mining
experience.
While
have
entered
into
employment
contracts
with
number
key
personnel in Australia and the United States,
we cannot provide assurance that key personnel will continue
employed or that we will be
able to attract and retain qualified
personnel in the future. Failure
to retain or attract
key personnel could have
a material adverse effect on
our business, financial condition and
results of operations.
We may not have adequate insurance coverage
for some business risks.
We have insurance
coverage for certain
operating risks that
provides
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
some
instances,
certain
insurance
may
become
unavailable
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,
all. In
addition,
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 and 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
significant
adverse event
not fully
or partially
covered by
insurance
could have a material adverse effect on our financial
condition and results of operations.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Cybersecurity
incidents,
attacks
and
other
similar
crises
disruptions
could
interrupt
disrupt
our
information technology systems,
or those
of our
third-party business partners,
which could, among
other
things, negatively affect our business, financial
condition and results of operations.
Our business may be impacted by cybersecurity incidents, cyberattacks, system failures and other cybersecurity
threats to our
information networks
and systems,
as well as
those of our
third-party business
partners, and
the
information stored on those
networks and systems.
Strategic targets, such
as energy-related assets,
may be at
greater risk
of cybersecurity
incidents, attacks,
and threats
than other
targets in
the United
States or
Australia.
Cybersecurity incidents and similar attacks vary in
their form and can include
the deployment of harmful malware
or ransomware, denial-of-services attacks, and other attacks,
which may affect business continuity and threaten
the
availability,
confidentiality
and
integrity
our
systems
and
information.
Cybersecurity
incidents
can
also
include fraud, phishing
or other social
engineering attempts or
other methods to
cause confidential information,
payments,
account
access
access
credentials,
other
data
transmitted
unintended
recipient.
Cybersecurity
threat
actors
also
may
attempt
exploit
vulnerabilities
through
software
including
software
commonly
used
companies
cloud-based
services
and
bundled
software.
While
have
experienced
cybersecurity threats and cybersecurity incidents, these events have
not materially affected our strategy,
results
of operations or financial condition to date. Although we maintain a cyber insurance policy, there is no guarantee
that such coverage will be sufficient
to address costs, liabilities and damages
we may incur in connection with a
cybersecurity incident
or that
such coverage
will continue
available
on commercially
reasonable terms
at all.
possible that
any such
occurrences could
have a
material adverse
effect
on our
business, financial
condition and results of operations.
In addition,
a disruption
failure of,
our
information
technology,
systems
or those
our third-party
business partners, and
the information stored
on those
networks and
systems could adversely
affect our business
operations and financial
performance. We
rely on the
accuracy,
capacity and security
of our IT
systems for
the
operations of many of our
business processes and to
comply with regulatory,
legal and tax requirements.
While
maintain
some
our
critical
systems,
are
also
dependent
third
parties
provide
important
services
relating
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,
or third-party systems
on which we
rely, could be breached,
disrupted or damaged by
computer viruses,
natural
manmade
incidents,
accidents,
failures,
disasters
unauthorized
physical
electronic
access.
Though we have controls in place, we cannot provide assurance that a cybersecurity incident or similar attack or
failure 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
ineffective
countering
threats.
currently
not
have
any
indication that
any risks from
cybersecurity threats
have had,
or are reasonably
likely to have,
a material
effect
on our business strategy,
results of operations or financial condition.
Failures
our
systems,
whether
caused
maliciously
inadvertently,
may
result
the
disruption
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
system failures
in the future.
A cybersecurity
incident relating
to our
information or
systems or
that of our
third-
party business partners,
or any failure
our third-party
business partners to
effectively address,
enforce
and maintain our information
technology infrastructure and cybersecurity
requirements may result
in substantial
harm
our
business
strategy,
results
operations
and
financial
condition,
including
major
disruptions
business operations,
loss of
intellectual property,
release of
confidential information,
alteration or
corruption of
data or systems,
costs related to
remediation or
the payment of
ransom, litigation
including individual claims
consumer class actions, commercial litigation,
administrative, civil or criminal
investigations or actions, regulatory
intervention,
sanctions or fines, investigation and remediation costs
and negative publicity.
Financial and Strategic Risks
The loss
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
generally
depends
variety
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
In addition, our
sales contracts
generally contain
provisions that
allow customers
to suspend or
terminate if
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,
2025, our
top ten
customers comprised
our total
revenue and
our
top five customers comprised
51.1% of our total revenue. For the year ended December
31, 2025, sales to Tata
Steel
and
ArcelorMittal
represented
and
respectively,
our
total
revenue.
The
majority
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 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
receive
payment
for
coal
sold
and
delivered
will
depend
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
result
fewer
sales
contracts
being
executed,
which
could
materially
and
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 forms
of security,
we maintain an insurance
policy to cover any
failure in payment. This
insurance coverage, however,
may not cover the full scope
and extent of losses we
may incur as the result
payment default or otherwise.
If a customer
does not
pay amounts
due in
a timely
manner,
we may
decide to sell
the customer’s coal
on the
spot market, which may be
at prices lower than the contracted
price, or we may be unable
to sell the coal at all.
If our customers’ or counterparties’ creditworthiness deteriorates,
our business could be adversely affected.
Changes in credit
ratings issued by
nationally recognized statistical
rating organizations could
adversely
affect our cost of financing and the market price
of our securities.
Credit rating agencies
could downgrade our ratings
due to factors specific
to our business,
a prolonged cyclical
downturn in the
mining industry or
macroeconomic trends
(such as global
or regional recessions)
and trends in
credit
and
capital
markets
more
generally.
Any
decline
our
credit
ratings
would
likely
increase
our
cost
financing,
limit
our
access
the
capital
markets,
significantly
harm
our
financial
condition
and
results
operations,
hinder
our
ability
refinance
existing
indebtedness
acceptable
terms,
all,
and
have
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
business, which could prevent us
from fulfilling our obligations under
our senior secured notes, the
ABL
Facility and other
debt, and we
may be forced
to take other actions
to satisfy our
obligations under
our
debt, which may not be successful.
December 31,
had $400.0
million aggregate
principal amount
of our
senior secured
notes due
2029 outstanding and $272.1 million
(A$406.6 million) aggregate principal amount
of borrowings under the ABL
Facility. As of December
31, 2025, our borrowing facilities had been fully drawn.
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 will depend
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 agreements could result in an event of default that,
if not cured or waived, would have a material adverse
effect on us.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Our
level
indebtedness
could
have
further
consequences,
including,
but
not
limited
increasing
our
vulnerability to adverse
economic or industry
conditions, placing us
at a competitive
disadvantage compared
other businesses
in the
coal industry
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 business and the coal
industry
generally,
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
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.
are
unable
service
our
debt
obligations,
could
face
substantial
liquidity
problems
and
may
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
these assets,
and
any proceeds
may
not
be adequate
meet
any
debt
service
obligations
then
due.
Any
these
examples
potentially
could
have
material
adverse
impact
our
results
operations,
profitability,
stockholders’ equity and capital structure.
adjust
our
capital
structure
from
time
time
and
may
need
increase
our
debt
leverage,
which
would make us more sensitive to the effects of
economic downturns.
possible that we
may need
to raise additional
debt or
equity funds
in the
future. Our ABL
Facility and operating
cash flows may not be adequate
to fund our ongoing capital requirements
for any future acquisitions or projects
refinance our
debt. There
guarantee that
we will
be able
to refinance
our existing
debt, or
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 the global
financial crisis, the
European sovereign debt
crisis and the
COVID-19 pandemic, and
the ability to obtain
new funding or
refinance
our existing
debt in
the future
may be
significantly reduced.
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 in
or abandonment
of business
development
plans
and
have
material
adverse
effect
our
business,
results
operations
and
financial
condition.
In recent years, certain financial
institutions, investment managers and insurance companies globally
have taken
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, certain
financial
institutions
have 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
requires
substantial
ongoing
capital
expenditures,
and
may
not
have
access
the
capital required to reach full productive capacity at our
mines.
Maintaining
and
expanding
mines
and
related
infrastructure
capital
intensive.
Specifically,
the
exploration,
permitting
and
development
Met
coal
reserves,
mining
costs,
the
maintenance
machinery,
facilities
and
equipment
and
compliance
with
applicable
laws
and
regulations
require
ongoing
capital
expenditures.
Any
decision
increase
production
our
existing
mines
develop
the
Met
coal
recoverable
reserves
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
above
our
present
levels
and
our
current or projected timelines.
As a result,
we may be required
to defer all or
a portion of
our capital expenditures,
and our results of operations, business and financial condition
may be materially and adversely affected.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
To fund our capital expenditures, we
are required to
use cash from our
operations, incur debt or
issue new equity.
Our ability
to obtain
bank financing
access the
capital markets
for future
equity or
debt offerings
may be
limited by our financial condition at the
time of any such financing or
offering and by the covenants in our existing
debt agreements,
as well
general economic
conditions, contingencies
and uncertainties
that are
beyond
our
control.
cash
flow
generated
our
operations
and/or
the
undrawn
capacity
under
our
committed
debt
facilities 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
our
investment
WICET
may
adversely
affect
our
financial
condition
and
results
operations.
We have
a minority
interest in
WICET Holdings
Pty Ltd,
whose wholly
owned subsidiary, WICETPL, 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
WICETPL
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
WICETPL’s extern
al debt facilities.
Under our 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
PL being charged to contracted shippers in proportion
each shipper’s
contracted capacity. Under the
terms of the
WICET Take-or-Pay Agreement,
the terminal handling
charge payable
can be
adjusted (increased
or decreased)
by WICETPL if
WICETPL’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
on how
much
WICETPL
can
charge
for
recovery
its
finance
costs,
referred
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
was
a decrease
in the
aggregate contracted
tonnage
at WICET
from 27
MMtpa to
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 on 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
lower
contract
base.
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
WICETPL’s
total external
debt (which
is based on
the proportion
that our contracted
tonnage bears
to the total
contracted
tonnage
WICET
when
the
payment
obligation
triggered)
and
ten
years
equivalent
terminal
handling
charges
the
prevailing
rate
the
time
that
the
termination
payment
falls
due.
have
provided
security to
WICETPL in
the form
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 12-month period.
In the event
of WICETPL defaulting
on its external
debt obligations,
external lenders
to WICETPL
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Restrictions and
limitations related
to our
coal supply
agreements with
Stanwell may
adversely impact
our strategy, financial condition, results of
operations and business.
Coronado
has an
ACSA, as
amended from
time to
time, with
Stanwell
to supply
thermal coal
to the
Stanwell
Power Station.
Under the
ACSA, in
addition to
supplying thermal
coal at
a price
below the
cost to
Curragh of
mining and
processing the
coal, Coronado
paid certain
rebates to
Stanwell on
Met coal
exported from
certain
parts of
Curragh, which
represented the
deferred purchase
cost of
the right
to mine
certain areas
at Curragh.
Coronado has
also entered
into the
NCSA, as
amended from
time to
time, with
Stanwell, that
will commence
upon the expiration of the ACSA (which
is expected to occur in the first half of 2027
based on estimated volume
remaining to be
delivered).
Under the NCSA,
Coronado will supply
thermal coal to
Stanwell 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. Our cost
of supplying coal
to Stanwell has
been and may
continue to
be greater than the price paid by Stanwell.
In November 2025, we
and Stanwell entered into
the Second Amendment
to the ACSA and
NCSA that, among
other
matters,
provides
for
certain
prepayments
by Stanwell
and
the
deferral
the
payment
of certain
amounts by us to Stanwell.
The value of the Prepayment and Deferred Payment Balance will be settled through
delivery of coal to
Stanwell in months when
our liquidity exceeds
$300.0 million. The Prepayment
and Deferred
Payment Balance bear interest at 7.5% per
annum, with the accrued amount (including accrued interest) capped
at 1.2 times of the outstanding principal balance until the final
delivery date pursuant to the NCSA.
Our ability to satisfy our obligations to Stanwell will depend on our financial condition and operating performance
the
future,
which
are
subject
prevailing
economic
and
competitive
conditions
and
certain
financial,
business and
other factors
beyond our
control.
Our inability
to comply
with our
obligations under
the Stanwell
agreements could
result in
an event
of default
under those
agreements, which
could
have a
material adverse
effect on our credit ratings and financial condition.
The
Second
Amendment
also
limits
our
ability
pay
distribution
stockholders
CDI
holders)
dividend) such that
we are required to
maintain a minimum
cash liquidity of
at least US$300.0
million following:
such
distribution;
any
required
repurchase
the
Notes
connection
with
such
distribution;
and
(iii)
payment to Stanwell of an equal
or greater amount (up to a
maximum of 3 times) than the
distribution being used
to reduce
the Prepayment
and Deferred
Payment Balance.
These restrictions may
impact our
decisions regarding
our ability to make distributions, which could restrict our
ability to execute on our business strategy.
Additionally, if our current controlling shareholder ceases to control us by disposing of 20% or
more of its shares,
we must
immediately pay
all rebates
waived by
Stanwell, plus
interest. The
Company may
not have
sufficient
funds or liquidity (or access thereto) to repay the rebates in the event they become due and payable to Stanwell,
which could adversely impact our financial condition, results
of operations and our business.
We may not recognize the intended benefits of the ACSA or the NCSA, or similar agreements we may enter into
in the future, and may
enter into similar agreements
in the future that limit
or restrict our business,
including our
ability to make distributions
to stockholders (or CDI
holders). The limitations and restrictions under
the ACSA and
the
NCSA
may
adversely
impact
our
ability
execute
our
strategy,
our
financial
condition,
our
results
operations and our business.
For
further
information
refer
Item 8.
“Financial
Statements
and
Supplementary
Data—Note
Contract
Obligations.”
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 operational
and miscellaneous obligations.
As of December 31, 2025, we had posted $20.0 million of surety bonds, $45.7
million of cash collateralized bank
guarantees and $95.9 million of cash collateral to meet
these obligations.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
other
acceptable
security
place
before
mining
can
commence
continue,
any
failure
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 expenses, 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 and adversely affected.
In Australia,
the Financial
Provisioning Act
establishes the
way that
our Australian
Operations
provide for
and
manage associated costs of providing financial assurances
related to mine rehabilitation obligations.
October
the
Scheme
Manager
issued
indicative
Annual
Review
Allocation
“High”
for
the
Curragh mine complex’s EA
number EPML00643713. As permitted
under the Financial Provision Act,
we made
formal submissions to the Scheme Manager requesting a review of
this indicative rating. Following consideration
of the
Company’s formal
submission, the
Scheme Manager
confirmed the
Annual Review
Allocation of
“High,”
but
applied
discretion
permitted
under
the
Financial
Provision
Act
grant
transitional
relief
allowing
the
application
the
“Moderate-High”
risk
category.
This
risk
category
will
apply
until
the
next
Annual
Review
Allocation for the Curragh mine complex, which is expected to
occur in November 2026.
Under the
transitional “Moderate–High”
risk category,
the Company
is required
to make
an annual
contribution
to the Scheme equivalent to 6.5% of Curragh’s ERC, rather than provide financial
assurance in the form of bank
guarantees, insurance bonds or cash collateral equal to
100% of Curragh’s ERC.
There can
assurance that
our risk
category allocation
will not
change or
increase in
future years,
which
could materially and
adversely impact our
financial condition and
results of operations.
In particular,
if the next
Annual Review Allocation
for EA number
EPML00643713 results in
a “High” rating, the
transitional relief will
longer be available
to us, and
we could
be required
to provide
financial assurance
equal to
Curragh’s
ERC.
The amount of
the ERC could
be material, and
we may be
unable to provide
sufficient cash
collateral or
secure sufficient guarantees or bonds on commercially
acceptable terms, or at all.
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 or
operations
at one
or more
of our
mines are
suspended, our
operations and
financial performance
would likely
adversely affected.
Federal and state
regulatory agencies
have the
authority following
significant health
and safety
incidents, such
fatalities,
order
mining
operations
temporarily
suspended
facility
permanently
closed.
For
example, on
December 18,
2025, operations
at our
Logan mine
in West
Virginia
were temporarily
suspended
after an employee
was fatally
injured. On
January 2, 2026,
following an
incident at the
Mammoth Underground
Mine where
a worker
was fatally
injured, operations
at the
two open
cut mines
at Curragh
(Curragh North
and
Curragh
South)
were
idled
for
hours
and
operations
the
Mammoth
Underground
Mine
Curragh
were
suspended.
We could also be required to close or discontinue
operations at particular mines before the end of their
mine life
due
environmental,
geological,
geotechnical,
commercial,
leasing
other
issues.
Such
closure
discontinuance
operations
could
result
significant
closure
and
rehabilitation
expenses,
employee
redundancy
costs,
contractor
demobilization
costs
and
other
costs
loss
of revenues.
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
our
operations,
pay
for
take-or-pay
arrangements
that
longer use,
which
would
have
adverse
impact
our operating
and
financial
performance.
Many
these
costs could also be incurred
if a mine was unexpectedly
placed into care and maintenance
before the end of its
planned mine life, such as our Logan mine in the U.S.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
If the
assumptions underlying
our provision
for reclamation
and mine
closure obligations
prove to
inaccurate, we could be required to expend greater
amounts than anticipated.
The EP Act and
the SMCRA establish
operational, reclamation and
closure standards for
all aspects of surface
mining
well
deep
mining.
accrue
for
the
costs
current
mine
disturbance
and
final
mine
closure,
including
the
cost
treating
mine
water
discharge
where
necessary.
Estimates
our
total
reclamation
and
mine-closing liabilities totaled $154.4 million as of December 31, 2025, based upon permit requirements and the
historical
experience
our
operations.
However,
these
estimates
depend
number
variables
and
assumptions, including the
estimated future asset
retirement costs and
the timing of
such costs, estimated
proven
reserves,
assumptions
involving
third-party
contractors,
inflation
rates
and
discount
rates,
and
therefore
are
subject
change.
these
accruals
are
insufficient
our
liability
future
year
greater
than
currently
anticipated,
our
future
operating
results
and
financial
position
could
adversely
affected.
See
Item 7.
“Management’s Discussion
and Analysis of
Financial Condition and
Results of Operations
—Critical Accounting
Policies and Estimates.”
We are subject to foreign exchange risks involving
certain operations in multiple countries.
Losses sustained
from adverse
movements in
currency
exchange rates
can impact
our financial
performance
and financial position and the level of additional funding required to support our businesses. Our financial results
are
reported
and
certain
our
liabilities,
earnings
and
cash
flows
are
influenced
movements
exchange
rates,
especially
movements
the
exchange
rate.
For
example,
costs
relating
our
Australian Operations are generally
denominated in A$. In addition,
foreign currency exposures
arise in relation
coal
supply
contracts,
procurement
plant
and
equipment
and
debt,
which
may
priced
other
foreign currencies other than US$.
The impact of currency exchange rate movements will vary depending on factors such as the nature, magnitude
and duration
of the movements,
the extent
to which
currency risk
is hedged under
forward exchange
contracts
or other hedging instruments and the terms of these contracts. We may enter into forward exchange
contracts to
hedge a portion of the
foreign currency exposure
of our Australian Operations
from time to time. The
unhedged
portion of our
non-US$ exposure is subject
to the risk
of adverse movements in
exchange rates, which may
affect
our operating results, cash flows and financial condition.
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
unfamiliarity
with
new
assets
and
the
businesses
associated with them and new geographic areas;
the diversion of management’s attention from other
operations; and
timing, and whether the acquisition
or business expansion is occurring
during adverse economic, social
and regulatory periods.
Further,
unexpected
costs
and
challenges
may
arise
whenever
businesses
with
different
operations
management
are
combined,
and
may
experience
unanticipated
delays
realizing
the
benefits
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Coronado
Global
Resources Inc.
holding
company
with
operations
its
own
and,
such,
depends
its
subsidiaries
for
cash
fund
its
operations
and
expenses,
including
future
dividend
payments, if any.
holding company,
our
principal
source
of cash
flow
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
our
subsidiaries
generate
sufficient
cash
flow
make
upstream
cash
distributions
Our
subsidiaries are separate legal
entities, and although they
are wholly-owned and controlled
by us, they have
obligation to make any funds available to us, whether
in the form of loans, dividends, or otherwise. The
ability of
our
subsidiaries
distribute
cash
will
also
subject
among
other
things,
restrictions
that
may
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.
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 Regulatory Risks
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), there
is a risk
of legislation
and regulatory
change that
may increase
our exposure
to claims
arising out
of current
former activities or
result in increased
compliance costs
(e.g., through requiring
improved monitoring standards
contribution
industry-pooled
fund).
Regulatory
agencies
also
have
the
authority,
following
significant
health
and
safety
incidents,
such
as fatalities,
order
mining
operations
temporarily
suspended
the
facility be permanently closed. As discussed
above, if further serious safety incidents 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
see
Item 1.
“Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters
—United States.”
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,
other
disputes
between
and
our
employees
disputes
affecting
our contractors
may
result
strikes or uncompetitive work practices.
December 31,
had 1,799
employees. In
addition, as
of December
there were
contractors
supplementing
the
permanent
workforce,
primarily
Curragh.
December
approximately
of our
total employees,
all at
our
Australian Operations,
were represented
by organized
labor unions
and covered
by the
Enterprise Agreement
This Enterprise
Agreement will
expire in
2027 but
will
remain
place
operation
the
Fair
Work
Act
(Cth)
until
replaced
terminated
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
cause
exposure
hazardous
materials
our
contractors,
our
employees
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
our
use of
hazardous
materials
and generation
of hazardous
waste.
A number
of laws,
including, in the United States, CERCLA
and the RCRA, and in Australia, the EP Act, impose
liability relating to
contamination
hazardous
substances.
Furthermore,
the
use
hazardous
materials
and
generation
hazardous
and
other
waste
may
subject
investigation
and
require
the
clean-up
soil,
surface
water,
groundwater and other media.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Mining
operations,
including
blasting
and
processing
ore
bodies,
can
also
generate
environmental
impacts.
These
impacts
include,
but
are
not
limited
leakages
polluting
substances,
explosions,
flooding,
fires,
accidental
mine
water
discharges,
and
excessive
dust
and
noise.
Such
risks
could
result
damage
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
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
the
contamination
other
damages,
even
for
the
entire
amount
damages
assessed.
Additionally,
any violations of
environmental laws by
us could lead
to, among other
things, the imposition
of substantial fines,
penalties, other civil and
criminal sanctions, the curtailment
or cessation of
operations, orders
pay
compensation,
orders
remedy
the
effects
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
disposed
pumping
into
impoundment
area
where
particles
are
allowed
settle.
have
procedures
place
that
the
Curragh
slurry
impoundments
remain
below
the
surrounding
topography
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
fail,
releasing
large
volumes
coal
slurry
into
the
surrounding
environment.
Structural
failure
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.
Coronado has four
refuse areas
throughout our
U.S. mining
properties.
Only one area is a slurry impoundment. One refuse area utilizes a slurry cell system, that is designed to limit the
amount of slurry
that is
subject to a
problematic release. Two of
the refuse areas
utilize a combined
refuse system
and do not impound slurry. The one slurry impoundment overlies mined out areas, which can pose a heightened
risk of
failure. The
presence of
the mined
out works
is incorporated
into the
design of
this impoundment.
If our
impoundment
any
the
other
refuse
areas
were
fail,
could
subject
substantial
claims
for
the
resulting environmental contamination and associated liability,
as well as for related fines and penalties.
Changes in and
compliance with government policies,
regulations
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
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 GHG emissions,
attach a cost to GHG
emissions, limit the use of thermal
coal in power generation,
create
more
stringent
workplace
health
and
safety
laws,
create
more
rigorous
environmental
laws,
and
make
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
interrupt
continuation
exploration
production
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
the
regulations
for
these
laws
have
not
yet
been
promulgated
and
certain
instances are undergoing
revision. In addition,
judicial decisions limiting
the authority of
regulatory agencies,
decisions
impacting
current
regulations
and
policies
implemented
such
agencies,
could
create
uncertainty
regarding the regulatory landscape and impact the Company’s
ability to plan for future investments.
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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,
may
also
subject
unforeseen
environmental
liabilities
resulting
from
coal-related
activities,
which
may
costly
remedy
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
may 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
Operations,
may
have
adverse
effect
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.
the
extent
that
such
environmental
laws
and
regulations
reduce customer demand for or
increase the price of coal,
our operating results may
be detrimentally impacted.
For
additional
information
about
the
various
regulations
affecting
see
Item 1.
“Business—Regulatory
Matters—Australia” and “Business—Regulatory Matters
—United States.”
are
subject
extensive
forms
taxation,
which
impose
significant
costs
and
future
regulations
and
developments
could
increase
those
costs
limit
our
ability
produce
coal
competitively.
Federal,
state
local
governmental
authorities
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 duties, environmental taxes and income taxes.
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
particular
period,
have
material
adverse
effect
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
have
filed
trademark
application
for
use
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
the
United
States
Australia.
have
not
filed
for
this
other
trademarks
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,
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
cancellation
proceedings
are
filed
against
our
trademark
application,
our
trademark
may
not
survive
such
proceedings,
and/or
may
required
expend
significant
additional
resources
effort
defend
ourselves in the proceedings or identify a suitable substitute
mark for future use.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
applicable
trade
sanctions,
anti-competitive
behavior
other
misconduct
our
employees,
contractors,
customers,
service
providers,
business
partners
and
other
third parties
could
result
in violations
of relevant
laws
and regulations
and
subject us or relevant
individuals to corresponding regulatory
sanctions or other claims,
and could also result
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
financial
harm
addition,
failure
comply
with
environmental,
health
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
cessation or interruption of operations.
have
policies,
procedures
and
internal
controls
intended
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
adverse
effect
our
reputation,
financial
condition
and
results
operations.
Risks Specific to Our Common Stock
Our certificate of incorporation and bylaws include
provisions that may discourage a change in control.
Provisions
contained
our
amended
and
restated
certificate
incorporation,
certificate
incorporation,
amended and
restated bylaws, or
bylaws, and
Delaware law
could make
it more
difficult for a
third-party to acquire
even
doing
might
beneficial
our
stockholders.
addition,
provisions
our
certificate
incorporation and bylaws 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,
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
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
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 certain exclusions)), may not engage in a business combination
transaction with such company for a
period of
three
years
after
buying
more
than
such
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
incorporation
limits
the
personal
liability
our
directors
for
certain
breaches
fiduciary duty.
Our
certificate
incorporation
and
bylaws
include
provisions
limiting
the
personal
liability
our
directors
for
breaches
fiduciary
duty
under
the
DGCL.
Specifically,
our
certificate
incorporation
contains
provisions
limiting
director’s
personal
liability
and
our
stockholders
the
fullest
extent
permitted
the
DGCL.
Furthermore, our
certificate of
incorporation provides
that no director
shall be
liable to
us and
our stockholders
for
monetary
damages
resulting
from
breach
fiduciary
duty
director,
except
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
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.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
Coronado
Group
LLC
and
the
EMG
Group
have
substantial
control
over
and
are
able
influence
corporate matters.
Coronado Group
LLC and
the EMG
Group have
significant
influence over
us, including
control over
decisions
that
require
the
approval
stockholders,
which
could
limit
the
ability
other
stockholders
influence
the
outcome of stockholder votes.
December 31,
2025, the
EMG Group
indirectly held
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
of September
between us
and Coronado
Group LLC,
or the
Stockholder’s Agreement,
so long
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
markets transactions.
See Item 5.
“Market for
Registrant’s Common
Equity,
Related
Stockholder
Matters
and
Issuer
Purchases
Equity
Securities”
for
description
the
Stockholder’s Agreement.
Further, pursuant to
the terms of the Series A
Share, Coronado Group and the
EMG Group or its successors
permitted
assigns,
the
beneficial
owner
the
Series A
Share,
its
option,
will
have
the
ability
elect
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
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
acquire assets that
we seek to
acquire and, as
a result, those
acquisition opportunities
may not be
available to
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,
the
Registration
Rights
and
Sell-Down
Agreement,
Coronado
Group LLC
its
successors
permitted
assigns
transferees)
has
the
right,
subject
certain
conditions,
require
cooperate in a
sell-down of
shares of
our common
stock or
CDIs held by
it. By virtue
of its majority
ownership,
Coronado
Group LLC
could
cause
undue
volatility
the
prevailing
market
price
our
common
stock
exercising its registration
rights and selling
a large number
of shares of
CDIs. 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
our
non-employee
directors
their
respective
affiliates,
including
the
EMG
Group,
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:
permits
enter
into
transactions
with
entities
which
one
more
non-employee
directors
are
financially or otherwise interested;
permits any
non-employee director
or his
or her
affiliates to
conduct a
business that
competes with
and to make investments in any kind of property in which we may
make investments; and
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
provides
that
any
non-employee
director
becomes
aware
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
have
acted
manner
inconsistent
with
his
her
fiduciary
other
duties
our
stockholders regarding the opportunity or to have 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, including the EMG Group as a result of
the rights granted to it under the Stockholder’s Agreement.
General Risk Factors
Any
failure
maintain
effective
internal
control
over
financial
reporting
may
adversely
affect
our
financial condition and results of operations.
Our
management
responsible
for
establishing
and
maintaining
adequate
internal
control
over
financial
reporting.
Internal
control
over
financial
reporting
process
designed
provide
reasonable
assurance
regarding
the
reliability
financial
reporting
and
the
preparation
financial
statements
accordance
with
generally accepted accounting principles in the United
States, or U.S. GAAP.
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
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.
such
circumstances,
our
financial
condition
could
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
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,
are subject to continuous compliance requirements under 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.
public company, we are subject
to the reporting
requirements of the
Exchange Act, the
Sarbanes-Oxley
Act
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
and
other
applicable
securities laws, rules and regulations. Compliance with these
laws, rules, and regulations may increase our legal
and financial
compliance
costs,
make
certain
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 the SEC
with respect to our
business and results of
operations. In the absence
waiver
from
the
ASX
Listing
Rules,
these
SEC
periodic
reports
will
addition
our
periodic
filings
required
the
ASX
Listing
Rules.
The
Sarbanes-Oxley
Act
requires,
among
other
things,
that
maintain
effective
disclosure
controls
and
procedures
and
internal
control
over
financial
reporting.
order
maintain
and,
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.
result,
management’s
attention
may
diverted
from
other
business
concerns
and
our
costs
and
expenses
could
increase, which
could
harm our
business
and results
of operations.
may need
to hire
more employees
engage outside consultants in the future,
which will increase our costs and expenses.
Table of Contents
Coronado Global Resources Inc. Form 10-K December 31,
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
certain
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
provided
regulatory
and
governing
bodies.
This
could
result
continuing
uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance
practices.
intend
invest
resources
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
compliance
activities.
our
efforts
comply
with
new
laws,
regulations and standards differ from the activities intended by
regulatory or governing bodies due to ambiguities
related
their
application
and
practice,
regulatory
authorities
may
initiate
legal,
administrative
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
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
proceeding
asserting
claim
against
the
Company
any
director
officer
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
any
director
officer
other
employee
the
Company
governed
the
internal
affairs
doctrine
other
“internal
corporate
claims”
defined
Section 115 of the DGCL.
The choice of
forum provision may limit
a stockholder’s ability
to bring a claim
against us or our
directors, officers,
employees or
agents in
a forum
that it
finds favorable,
which may
discourage stockholders
from bringing
such
claims
all.
Alternatively,
court
were
find
the
choice
of forum
provision
contained
our
bylaws
inapplicable or unenforceable
in an action,
we may incur
additional costs associated
with resolving such
action
another
forum,
which
could
materially
and
adversely
affect
our
business,
financial
condition
and
results
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
or general operations
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
issuances will dilute the ownership of existing holders
of our common stock.
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;
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Coronado Global Resources Inc. Form 10-K December 31,
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;
new or changes in government laws or regulations;
potential or actual military conflicts or acts of terrorism;
new or changes in accounting principles;
announcements concerning us or our competitors;
changes in government policy,
legislation or regulation;
inclusion of our securities
in, or removal of
our securities from,
particular market indices
(including S&P
and ASX indices); and
the risks inherent to our business, including adverse weather
conditions.
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
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
the trading
price and
volume of
any particular
security
will be
sustained. These
factors may
materially affect
the market
price of
our
securities, regardless of our
operational performance. This may
then significantly impact our
ability to raise new
equity which may
be required to fund
our operations if
our financial performance deteriorates
due to other
factors.
The payment of dividends and repurchases of our common stock are dependent on a number of factors,
and future
dividend payments
and repurchases
are within
the discretion
of our
Board of
Directors and
cannot be guaranteed.
The
payment
dividends
respect
our
common
stock
impacted
several
factors,
including
our
profitability,
retained earnings,
capital requirements
and free
cash flow,
as well
as applicable
covenants under
the Indenture
governing our
Notes, covenants
under the
ABL Facility
and terms
of our
other agreements
with
Stanwell. In certain circumstances, prior to paying any dividend
to our stockholders, we are required to make an
equivalent (or greater)
payment to Stanwell
as well as an
offer to redeem
an equivalent amount
of our Notes (if
required by the
Indenture).
As a result,
if the Board
of Directors determines
to pay a
dividend, a significant
portion
of our
cash on
hand that
would otherwise
be available
to pay
dividends must
be used
for other
purposes. Any
future
dividend
payments
will
determined
and
declared
the
discretion
our
Board
Directors
considering
the
factors
above,
among
others.
There
guarantee
that
any
dividends
will
be paid,
or stock
repurchases will be made, by
us in the future,
or if paid, paid at previous
levels. From time to time,
our Board of
Directors may also cancel previously announced dividend
payments.
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Coronado Global Resources Inc. Form 10-K December 31,
