THE Hunter coal industry is back on an optimistic footing after big rises in prices both for coking coal for steelmaking and the region’s main product, thermal coal for power stations.
In round figures, thermal coal prices are up by about 70 per cent on lows earlier this year, while coking coal, which makes up about 15 per cent of Hunter output, has effectively doubled.
The price increases have led analysts to re-rate most Hunter mines as profitable, whereas a year ago it was widely accepted that two out of three mines were losing money.
In Queensland, Glencore has reopened its Collinsville open-cut, creating jobs for about 200 mine workers.
In the Hunter, although the deal is yet to be finalised, the rising prices mean that Nathan Tinkler and his associates may well have struck with perfect timing in their purchase of the Dartbrook mine from the financially stricken Anglo American group. Although Mr Tinkler is no longer on the board of Australian Pacific Coal, his companies retain significant shareholdings.
In an echo of former deputy prime minister Mark Vaile joining the board of Aston Resources when Mr Tinkler was developing Maules Creek, Australian Pacific Coal has appointed a former chief minister of the Northern Territory, Shane Stone, as a non-executive director.
Although Australian Pacific Coal’s share price has stayed at similar levels in recent months, other small mining companies that have bought discarded mines from major players have already profited.
Queensland producer Stanmore Coal has seen its share price go from 5 cents in June last year to 62 cents this week.
Economists say higher coal and iron ore prices should dramatically improve the federal budget’s bottom line.
The improved market has also lifted volumes sold out of Newcastle, with 119 million tonnes rail-hauled to the port in the first nine months of 2016, compared with 117 million tonnes in the same period last year.