Nathan Tinkler has agreed to spend as much as $25million exploring the Ferndale coal exploration area near Denman in a deal that will give him almost 20 per cent of the shares in the small Hunter mining company Coalworks.
Coalworks managing director Andrew Firek said yesterday Mr Tinkler’s ‘‘unique ability to add value to coal projects’’ would help the company turn the exploration area into a mine scheduled to start production in 2016.
Ferndale has likely reserves of more than 500million tonnes of coal.
Mr Firek said if shareholders approved the deal next month, Mr Tinkler’s company, Boardwalk Resources, would buy shares in Coalworks giving it a 19.9per cent stake and a seat on the board.
Mr Tinkler’s investment in Coalworks through Boardwalk is the latest in a line of coal industry deals transforming the shape of the NSW industry.
The Australian Financial Review reported on Friday that the Mount Penny exploration area west of Denman, bought from the state government about 14months ago for $1million, would be sold for $500million.
It reported that two of the men involved, Brian Flannery and Travers Duncan, earned more than $1billion between them last year when they sold Felix Resources – owner of the Moolarben exploration area west of Bylong, for $3.2billion – to China’s Yancoal.
The NSW and Queensland coal industries are making big profits despite the record strength of the Australian dollar undermining the returns on commodities traded almost exclusively in US dollars.
Tony Maher, general president of the Construction, Forestry, Mining and Energy Union’s energy division, said the coal industry was in the grip of profiteers.
‘‘These guys are buying and selling mining tenements. They’re real estate transactions rather than mining. It’s a monopoly game for these people,’’ Mr Maher said.
Email a friend