Ironically with Stockton facing job cuts Bathurst may see it's importance in the area grow. Now only if they could get their own act together!!!
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Ironically with Stockton facing job cuts Bathurst may see it's importance in the area grow. Now only if they could get their own act together!!!
Well I've been patient these past few weeks on this one, anticipating a drop to under 6c NZD and to 5c AUD...and managed to get a bundle yesterday on the ASX, well under the rights issue price.
The best time to buy stocks is often when their industry is out of favour.
Go you good thing. Up 4% today on my buy price, and I would be very surprised if we see yesterday's prices again...ever.
A brave call? I'm only hoping it's not a foolish one. Management - you better know what you're doing. I'm right behind ya', believing your story.
Bobcat, Rule #22 - never trust management.
1 + 2 = I'll let you make up your own mind Bobcat, what it could equal.
I only read this tonight and it quite a wakeup call for me.
I am interested in your version.
1 - http://www.resilience.org/stories/20...oment-of-truth
The Global Energy Market’s Moment of Truth
by Paul Gilding, originally published by Cockatoo Chronicles | TODAY
2 - http://online.wsj.com/news/articles/...99463110726302Rio Tinto Seeks to Sell Australia Coal Stakes
By Gillian Tan in Sydney,
Robb M. Stewart in Melbourne and
Mari Iwata in Tokyo
Updated April 3, 2013 3:08 a.m. ET
Alcatel Lucent ... More quote details and news » RIO.LN in http://www.sharetrader.co.nz/image/p...AASUVORK5CYII= Your Value Your Change Short position PLC has put stakes in several Australian thermal-coal mines on the block in sales that could fetch around US$3 billion, people familiar with the matter said Wednesday.
They're interesting articles, tricha but they're talking about the future of thermal coal, used largely for generating electricity, rather than Bathurst's coking variety, used for steel making. Certainly, the market for coking coal isn't great at present but until the world learns to do without steel - or finds a better substitute for hard, coking coal, then Bathurst's product has a future. This may not be the case for their thermal coal mines, providing energy for S.I. dairy processing.
couple of observations:
1) "Resilience.org is a program of the Post Carbon Institute (PCI)". No doubt they wish that what they preach will happen. Why would they publish anything else?
2) Whatever you think about the predictions for thermal coal - Bathursts main product is coking coal, which is required for steel production (you need the carbon, not the energy .... - check:
http://www.sharetrader.co.nz/showthr...l=1#post484206
This means BRL is in the hands of the steel market (and the supply of coking coal, which is currently plenty), but just to a minor degree dependant on energy markets turning regenerable (which is inevitable, though I am not sure about the timeframe: years, decades centuries?).
We will see, all the different grades of coal, blended\processed. If what I believe will happen and it needs to happen, otherwise we will either need webbed feet or have to move higher.
The US is building a big new nuclear power station. Why ???
https://www.google.co.nz/#q=new+nucl...+plants+in+usa
available in the U.S. Department of Energy Nuclear Power Deployment ...US starts building first nuclear reactors in 30 years - New...
www.newscientist.com/.../mg21829116.600-us-starts-building-first-nucle...
Apr 3, 2013 - YOU could be forgiven for thinking a new era of nuclear energy is under way in the US. On 11 March, crews at the Virgil C Summer power plant ...
The point here is change.
The postie is disappearing, meter man, video stores.
Nothing stays the same.
If America is getting serious about coal.
8 Things You Should Know About The Biggest Thing A President’s Ever Done On Climate Change
http://www.resilience.org/stories/20...climate-change
Then China will as well.
Thanks for the life lesson, however as has already been pointed out, coking coal is for use for efficient steel production NOT electricity nor heating. Me thinks you may have another agenda in mind...
Attachment 5906
Tricha, how can you possibly ever invest in any company stock without trusting those in charge of how those funds are best managed? Of course you must trust.
If you can't find a company whose business leaders you can trust, then stay away from the stock market, and ask yourself the rather personal question :
"What is it that made me so cynical that I cannot trust others better equipped than myself to properly manage a business venture?"
BC
Some years back I recall reading an article about a prominent NZ scientist, backed by Tindall, whom had created an algae that consumed slag waste from steel mills. Supposedly it was trialled successfully at Glenbrook then tested at a Chinese mill. Has anyone any info re these tests or updates?
Thanks
Ok, I'll re phrase it.
Bathhurst
Not that I ever held it and now with the information available, probably never will.
There is now a grey area over coal.
Bobcat have you done due diligence on the Bathurst management.
1 - How many shares do they own in Bathurst.
2 - Have they been buying recently on your perception that, Bathurst is now cheap.
3 - How much are they getting paid. Under these stressful circumstances to the company.
Are they taking a pay cut and should a big part of their salary be free shares at a higher price.
4 - Who spent 7.5 million on a shed at the Westport wharf. Where did this money come from and was this ever a sound investment.
All the best with Bathurst.
Change is coming. This might be the end of coal for the coast.
Remember in this fast changing world, nothing stays the same.
The mining boom hangover is about to begin
ROBERT GOTTLIEBSEN 6 JUN, 7:30 AM 12
INDUSTRIES RESOURCES AND ENERGY ECONOMY CHINA COMMODITIES
I do not believe Australians fully understand the seriousness of what is happening in the global mining business. Right now it is the Australian mining investment boom that is delivering the good economic figures that Treasurer Joe Hockey boasts about. Next year and in 2016 we will see a rapid decline in mining investment and, worse still, bad news on the mining front is still emerging from many quarters. Mining will still underpin Australia but the huge investment boost is over.
Normally the changed mining outlook would see the Australian dollar slump, but because our interest rates are so above Europe and the US (and last night’s European cut underlines this), our currency stays high. This makes it even harder to justify new mining projects and intensifies the impact of the price reductions.
This amazing boom has enabled Australia to go 23 years without a recession. In the post-war decades among developed countries only the Netherlands has beaten that record and they fell over in the global financial crisis.
Chinese banking scams punctuate the mining fall. At the beginning of this calendar year we saw iron ore prices soar and many believed the boom would continue. But the spike was partly on the back of a Chinese bank trading scam where steel mills could obtain credit by buying ore they did not need. It unravelled and the price slumped.
For a long time similar Chinese banking scams have involved copper, which was used as security for apartment block building loans. The apartment blocks normally had no tenants. Now this week one of these copper banking games has proved to be a fraud where the same copper was used for many mortgages. The crazy copper game may now end.
Longer term, copper will fare better than many other minerals, but there could be short-term pain.
For me, the full realisation that the mining boom was marching towards its end came just one day short of 17 months ago when I wrote the benchmark comment with the heading China makes a frightening energy shift. The opening said: “Register February 7, 2013 in your diary. That is the day you fully appreciated the new direction China is now taking which will hit the expansion of our coal industry and later may affect other mineral exports.”
Of course as regular readers of my commentary will recall I based those conclusions on research by Ross Garnaut and his son John Garnaut. As we now know coal prices have slumped. I was reminded of how right the Garnauts were when, in Business Spectator yesterday, we carried the heading China coal demand to fall: Garnaut.
Ross Garnaut, writing in the forthcoming China & World Economy Journal, predicts thermal coal consumption in China will fall by 0.7 per cent per annum through to 2020, leading to a “historic” turnaround in demand from a lift of 13 per cent between 2000-2011 to a 10 per cent decline through to 2020.
The essence of what Garnaut was saying in February last year was that China was about to tackle its emissions and air pollution, and coal would be the sufferer. Inevitably iron ore would also be affected. Gas, solar and perhaps nuclear would be the winners. At the time coal miners were engaged in massive, high-cost expansions and did not believe the commentary. Most do now.
Falling coal demand in China is happening as extra coal supply comes onto the market, including big expansions in Australia. In addition the swing by the US to gas, which freed up US coal from the domestic market to exports, has helped pummel the coal price. At least we had gas.
But now China has signed a massive, cut-price gas deal with Russia which will make most new Australian gas projects uneconomic and put pressure on long-term returns from the high-cost developments like Gorgon.
What happens next? It will be very hard to get new projects off the ground and while prices for iron ore and coal remain depressed, returns will be a lot lower than forecast. If PricewaterhouseCoopers is right the next step is lower dividends from many miners.
According to the Financial Times, PwC believes that:
“The level of dividends paid by the world’s largest miners is at risk amid weaker commodity prices after companies’ payouts to investors last year amounted to more than double their net profits … The aggregate profits earned by a ‘top 40’ group of the world’s biggest miners by market capitalisation were driven down by impairments and slumped more than 70 per cent in 2013 to $20 billion, the lowest level in a decade … At the same time dividends last year from the same group of companies amounted to $41bn, up from $15bn five years previously. Dividends have become an important tool for miners to try to retain investor support but in the tough times it will be hard to sustain them.”
After a long and painful slump - are coking coal prices slowly creeping up? Check out the graph - this is the third successive (though modest) price increase in a row:
http://www.sunsirs.com/uk/prodetail-417.html
Chinese coking coal market - try Chinese Yuan (or Renmenbi - "peoples gold")
And here’s more encouraging news – the Brits are looking at starting a coking coal mine in Cumbria. Never saw that one coming.
http://www.newsandstar.co.uk/news/ne...obs-1.1141547?
Underground mine (of course) 500 jobs.
However – our OCR has just gone up – that will make life a little more tricky for exporters.
You better hurry up and buy some more, they are being discounted again. The fund managers are dumping them, I wonder why?
$0.050 https://ost.asbbank.co.nz/Content/St...ransparent.png0.5 9.1%
This outfit is a bit further ahead http://www.nae.net.au/ seems a sure bet.
tricha,
BRL is no doubt a high risk investment and can easily go belly up. I am still holding (but quite close to my exit trigger), and wouldn't buy more at current. However - the argument that fund managers are selling doesn't mean a thing - just have a look at the 2014 stock picking contest - how do fund managers rank? What return do most of these funds deliver year on year? Sure, some are better than others, but as a group they might though have a better crystal ball than us (more research resources), but I am not always sure, whether they know how to use it.
The fund managers must be selling heaps, HUGE numbers sold today,......
Yea Right!!!!!
630k has been traded on the asx. Up 6.5%. The worm may well have turned.
Maybe the environmentalists have finally won through the recycling of steel. :D
Up nearly 8%, one of the best performers on the NZX today !!
Blue sky ahead !!
Bought a bundle earlier this week @5.1c. Let's see now whether or not today's spike has the legs to climb back up that steep slope...at least to 8c. My targets 30% over the next three months.
I could be dreaming of course. Coking coal would need to make quite a comeback on the world stage.
It would be interesting to see how closely it tracks the spot price of iron ore...which has also been falling for quite a while.
Bought more (40% more) this week around A$ .048. Taking a two year view on a counter cyclical play while sellers continue to crystallise their losses.
Counter cycle, hmm in your dreams. It is called change! People generally do not like or accept change.
If you reckonize it early, you might save a mint!
http://www.resilience.org/stories/20...ng-war-on-coal
War on Coal being waged by Geology and Markets, Not EPA
JonJon
Blackpeter summed it up in post #363 but I take the liberty of repeating it.
I think you have a point if you talk about thermal coal - but that is not BRL's main product (well, at the moment it is, but just for local supplies). What they want to export is premium hard coking coal - much too expensive to burn.
Hard coking coal is an essential ingredient to make steel - you need it for the process to turn iron oxide and hard coking coal into iron and carbon dioxide. The main purpose of the coal is to release and then bind the oxygen again, not to provide energy for the process.
The use of hard coking coal would drop when the world doesn't need steel anymore, but don't expect that to happen overnight.
The current oversupply of hard coking coal is not a result of competing energy sources, but is the result of an under supply some years ago. Hard coking coal prices skyrocketed and everybody wanted to benefit from this opportunity and developed new mines (as well as BRL). Guess what happened when all this new supply swamped the market - prices dropped.
At this stage however there is more news about hard coking coal mines getting mothballed (or development delayed) - i.e. the producers take coal out of the market. I expect the price at some stage to come up again (and time will tell, whether BRL can hang in long enough to benefit from this rise).
Progress yesterday, the Plateau can now be prepared for production, from here it is just a waiting game...and payment of a fair bit to DOC.
Good to see progress and the diggers will be scratching the surface in a couple of weeks.
Hamish Bohannan got the usual accusatory grilling from National Radio's Morning Report today - "... the company is going broke..." etc - but came through it pretty well, I thought.
Other reactions?
Here is the interview: http://www.radionz.co.nz/audio/player/2600222
Yes, I think that Hamish came quite good through the grilling. As you expect, he didn't provide a lot of new information. Restated that they need US$140 per ton of coking coal to make it worthwhile to start mining and US$100 per ton in steady state production to break even.
BTW - nice little recovery yesterday on NZX plus quite a significant volume on the ASX (with a lesser increase - go figure ...). Still - feels like sentiment is improving.
Yes, although with the SPP offering a top up at a price that is still above market price, there is the possibility of a pump and dump.
The $140 per ton has already happened on some spot trades. See article
http://coal.steelguru.com/australia_...surprise_in_q4
I also found the comment that one Indian outfit has left the spot market in favour of fixed pricing, sensing price increases, somewhat encouraging.
Is it getting closer to the time to buy BRL?
There's also better news on the metals markets these days (well, at least copper is holding above USD3/lb on a day to day basis). Only one fly in the ointment - china. Is it or is it not going belly up?
Well spotted. This link has the Aussie current futures price which paints a different picture... (in USD I believe)
http://www.barchart.com/commodityfut...es_Futures/ILW
So Bathurst is going to be a cheap producer of coking coal?
I beg to differ.
I think the party is over, change is coming. Whether its iron ore, coal or coking coal.
Unfortunately the greens won again. This mine should have been pumping years ago.
http://www.businessspectator.com.au/...ters-Australia
Of more immediate concern, however, is the excess capacity resulting from past investment. This points to softer demand for iron ore and coking coal and may result in commodity prices falling even further. This presents a near-term risk for the Australian economy, not just in the broadest sense but with regards to individual iron ore producers.
While I wouldn't attempt to curtail the democratic notion of free speech I do believe that your posts are rooted more in emotional attachments you have regarding the prospects of the continued survival of our planet rather than the individual prospects of the company that this thread is dedicated to.
From your link, Quote,"According to Chinese Vice Foreign Minister Wang Bao’an, a further 100 million people will migrate from agricultural and rural areas toward the cities by 2020, resulting in investment worth around 74 per cent of Chinese GDP divided over the next six years."
Would this not mean more urban infrastructure 70 times the size of Auckland, IE..... more steel required???
i am just saying it as it is, coal is a dinosaur wether you like it or not.
are the directors buying at these cheap prices :confused:
China's plan to combat pollution will fight climate change too
By Peter Sheehan
2:37 PM Sunday Jun 29, 2014
http://www.nzherald.co.nz/world/news...ectid=11283185
No argument there, tricha, but note that the article concerns China's plan to reduce the burning of coal for energy, ie the thermal variety, not the coking, steel-making variety that Bathurst gets beaten around the ears - by some - for deigning to mine on the West Coast.
Did any of te directors buy into the new share issue?
not a token gesture, but a meaning ful buy?
Did you tricha? Quite funny question anyway - anybody who wanted shares could get them cheaper on market (and many did - quite significant volumes going through).
As well - as "guru" you should know that directors are only in certain time windows allowed to buy / sell shares of the companies they have insider information about - and the time close to the end of the financial year (30 June for BRL) and the result announcement is definitely a "no-no". So no - they didn't and they would have broken the rules if they would have.
If you are really interested in the shareholdings of the directors, than you don't need to look further than the latest annual report. The "older" guard has some quite substantial holdings - from memory couple of million for Hamish B - and some of the others have quite significant holdings as well. Admittedly, they payed much more for them, than they are worth now, but they do have skin in the game, if that's what you are referring to.
Hope this helps - though I trust that you didn't wanted to know anyway ...);)
The old guard fair enough.
i am only interested in the new guard.
now with the capital raising a flop, I am guessing the new guard are out of a job?
Hmm as far as director rules, have a good look at TAP and a good Look at your rules.
Their CEO has been buying truck loads on market. I guess it depends on how much faith you have in your company and yourself.
Hi Tricha,
can't comment on TAP - however here is an article referring as well to the rule I mentioned:
http://www.theaustralian.com.au/busi...c898b5c45d498d
just to save you the search:
"There are two periods during the year when directors are not allowed to buy shares: the periods before the company's results.
Also, they are not allowed to buy company shares before a major announcement or when they become aware of a significant event."
Thanks for the answer Blackpeter.
1 - How many shares
do the directors hold.?:confused:
2 - How much are the directors of Bathhurst paid.?:confused:
The reason I ask this is - If the current directors have no real skin in Bathurst, they are only directors and not part owners.
If they are paid to much, they are working for themselves, not the shareholders.
( The reason I refer to TAP, it is a good example of a small company where the CEO Troy, took a big pay cut in lieu of shares at a much higher excise price than the shares were selling for.
His interests are for the good of all, shareholders and management.
He recently bought big parcels of shares direct from market, which again tells me he is putting his money where his mouth is)
Is Bathurst a good investment :confused: Answer to question 1 + 2 will give a good indication if the directors think so, or are they milking a dead cow..
Hi tricha,
not sure, whether I understand you confusion - a brief look into the 2013 annual report will clarify all of your questions:
http://www.bathurstresources.com/wp-...INGLE-PAGE.pdf
page 47 to 49 will give you all the answers you are after ... ;) ... and yes, I don't particularly fancy the colour schema of the report either.
Not sure, whether you checked the directors fees already prior to asking (i.e. did you ask a rhetorical question or are you just stirring?), but I agree that they appear to be quite high given the current company performance. On the other hand - they have been set some years ago, when the SP was ways higher (and the size of the fee potentially justified).
Still not sure what point you want to make - if you are saying that their might be better companies around to invest in ... yes, sure .... depending on your investment criteria this is always a true statement (no matter which company you are talking about, just depends on the timing). Just to name some of the fashionable high flyers and deep fallers: XRO, PEB, WYN, DIL - for all of them there have been times to make lots of money, and as well times to loose lots of money.
BRL is not different - and currently in my view basically an options game with only one factor influencing its outcome ... and that's the price development of coking coal. This is obviously as well a factor outside of the control of the directors, so the only thing they can do is to try to keep the current business running on the backburner (and as sustainable as they can) and hope the coking coal price will recover before the company runs out of money.
In my view there is no question that the coking coal price will recover (at some stage) - however it is up to anybody's guess, whether it will recover fast enough for the company to survive. If the recent company announcement is correct (that they can sustainably operate based on inland revenue), than its just a waiting game (and the directors worth their money). If they are however not able to keep the business sustainably running, than you are right - the directors are not worth their money.
BTW - here is the latest analyst report I could find ... target price 15 cts?
http://www.bathurstresources.com/wp-...he-hatches.pdf
Question: instead of keeping to harp on directors shares and fees - would you have any evidence to assess the directors performance (other than picking an industry with cyclical resource prices)? It looks like to me they made otherwise quite sensible decisions ... got all the necessary permits, closed down (currently) uneconomical production ...
just came across this article in the Otago times ... already a week old, but thought it is relevant to this thread:
http://www.odt.co.nz/news/business/3...ng-coal-prices
In a nutshell - analysts expect the coking coal price to stay depressed for the next couple of years ... and Bathurst say they can survive this period by increasing (and living off) their inland production. I guess time will tell - and the next financial report (due in August?) should give an indication ...
Actually - I stand corrected: yesterdays NZX announcements show that at least some of the directors (more announcements might follow today) did buy in the recent capital raising - check https://www.nzx.com/markets/NZSX/sec.../announcements
Starting to wonder whether all of the new shares have been bought by the directors (given that it was cheaper at that time to buy on market, but directors haven't been allowed to do due to reporting window)? Time will tell.
Hmm, that is not buying, that is a token gesture, am I reading it right, a lot of $600 and $1,700 .
$560,000 for director fees.
a shed (white elephant) at Westport that cost around 7 million, for what?
a ship loading facility that does not work, not that matters there is no ship and no mine.
7 million and a shiny sign. A. Sad state of affairs.
Hi Tricha, you seem to have forgotten (short attention span?) that directors are not allowed to trade prior to the announcement of the financials. Taking up their 1:23 allocation from the latest non-renounceable rights issue was the best they have been allowed to do.
Just to demonstrate the pressure on Bathurst these days, BHP has produced record volumes of coking coal in the past year.
http://news.theage.com.au/breaking-n...723-3ce8j.html
wonder what caused 26m shares to go through on ASX pre-market today. Guess we can expect an SSH for that one
The price was dragged down last week to 4c on the .nzx with large volume as a seller dumped. I put an immediate bid in at 4.1c to top up but it never got hit, and the price has risen since. Onward and upward from here I would say.
An interesting Motley Fool opinion.
I have yet to see any commentary that suggests that coking coal prices won't eventually recover.
Assuming then that they will, surely buying into the coking coal industry is best done at a time when coking coal prices are at a low ebb.
If not investing in BRL when between 4c and 5c $AU per share then when? Wait for coking coal prices to pick up? When that happens the BRL share price could well double very quickly IMO
In my view, buying at around those levels as I've said previously, is an excellent risk/reward proposition with a two year view. That of course means there IS risk and it's substantial. The potential reward horizon is IMO well and truly worth that risk.
Disc. Hold quite a few so I'm biased and my comments are accordingly and typically positive. Doesn't mean they are right.
Re: Coking Price recovery, you could be waiting a bit longer...
http://www.barchart.com/commodityfut...es_Futures/ILW
And the current chinese coking coal price trend is down....
http://www.sunsirs.com/uk/prodetail-978.html
So, held yesterdays gains and added a bit, the worst could be behind BRL.
Posters saying the stock is ''a dog'' and ''has fleas'' make me chuckle, had prices of coal stayed up where BRL was budgeting SP would have been buoyant and divs might have even been in the vocabulary.
Business wether it be coal, oil, milk, ice creams, pies or hotel beds relies on ''Mr Market'', right now Mr Market says coal is not worth so much, it is any ones guess when or if the price will rebound but history shows it always has in the past, should it do so again I suspect the fleas will leave the dog and much blue sky will be seen.
Quarterly financials are out: Q2/2014 was cash positive (though they expect Q3 to be cash negative - lower winter coal demand from dairy industry ...). 2015 overall expected to be cash positive - i.e. they can bunker down and just wait for the coking coal prices to recover.
https://www.nzx.com/files/attachments/197642.pdf
Given that it looks like they can bunker down and survive without selling on the international market is it now just a waiting game. If they really turn cash-positive in 2015 (still need to see the evidence), than the only big remaining risk for the company is if coking coal would never recover - not likely for a cyclical resource. So - happy to hold & wait.
Hi Tricha,
I can't remember that I noticed a white elephant the last time I came through Westport ;) (5 years ago or so), so happy to succumb to your better local knowledge.
Overall - it appears you carry a lot of baggage with you related to BRL, and I obviously don't know your personal situation. Why don't you just disclose what really bugs you with this company (and why, if it isn't obvious) - and then we might be able to start a more productive discussion.
Discl: My only relationship to BRL is that I hold a quite small share parcel from them in my high risk portfolio.
Kk
Come on Black Peter, you are telling me you do not know where your money is going :confused: oh the shed is real, but the ship is an illusion.
actually the shed is right next to Talleys, I am sure it will make a nice new fish factory.
https://nzx.com/files/attachments/160812.pdf
O.K. - nice picture ... and btw, at that time (2012) it wasn't my shares and therefore not my money. I only purchased the shares after they've been discounted after building the shed (so to speak - bought in only some months ago). Pleased to note that the current 50 Mio $ market cap covers as well a nice 5 Mio $ shed in Westport - who knows, maybe this knowledge is at some stage useful ....
Still not sure, why you are so frustrated. The coking coal price was in 2012 between 150 and 200 USD and it made sense to assume they can go ahead with production, and prepare for it (e.g. by improving the handling facilities).
Are you angry, that they didn't accurately predict the tanking of coking coal prices? Obviously we both now know, but you might agree that it is much easier to predict these things in hindsight.
Are you angry because they possibly made a mistake? Well, I know only about one person without fault (and even this is controverse). Died some 2000 years ago. Follow up with Bobcat if you want to know more.
You still didn't tell me why you are so angry. Did you own shares and lost money? Did you (or somebody in your family) loose a job with them? Or do you just like to stir?
the shares are not discounted.
I believe you are flogging a dead horse. Australia is closing multi millions of tons of coking coal.
at a cash cost far below Bathhurst.
If they were cheap, the directors would be buying ( tens of thousand dollars worth)
Unfortunately the greenies won again with their delaying tactica and national did nothing.
TRICHA Enough of your emotional dribble.
I wager you $10,000 that BRL shares are twice or more than todays closing price in 1 years time, a very good return in my books. India has announced massive infrastructure expansion and will need steel. China's population are moving to the cities. Australia's coal producers are locked into transport contracts that soon expire, their over production will soon reduce.
Most of us don't care what a company does as long as it can make us a profit. Trading in shares is just another form of gambling.
If you are so certain of your position please accept my wager. Curiously I would like to know how many short positions you have in BRL.
Tony
Wager Withdrawn
Why Tony? Is it the 5% slide in coking coal price this past month... http://www.sunsirs.com/uk/prodetail-978.html
Or some other reason?
No I'm still long this company, bought a mill of shares recently. They have a good internal position with thermal coal. With China's recent down turn in consumption and their removal of the 40% export tax Jan 2013 Met coal was always going to go south. I think that as their consumption increases along with India's and with the environmental buzz in the back ground then low sulphur coal for steel making is a long term play. I've been wrong before so time will tell. QUOTE=youngatheart;496560]Why Tony? Is it the 5% slide in coking coal price this past month... http://www.sunsirs.com/uk/prodetail-978.html
Or some other reason?[/QUOTE]
Sounds like there are some early signs that the world-wide coking coal mine closing starts to work:
http://online.wsj.com/articles/coal-...ize-1409517243
As well - Michael Warrington mentioned yesterday in his newsletter (http://www.chrislee.co.nz/market-news), that some 200 Indian coking coal mines might have some current legal trouble at hand impacting on their ability to supply.
Fits well together with other recent news that India is already suffering under the lack of (admittedly - cheap) coal:
http://www.themalaymailonline.com/mo...coal-shortages
Ah yes, and not to forget - Russia just invaded the heart of the Ukrainian coal country ... can't really imagine that war is a good way to boost production.
Edit (added later): http://www.mining.com/web/ukraines-n...omic-disaster/
Time to buy?
Discl: holding and just cancelled my sell order, but DYOR;
I topped up @ 5.2 NZ last week, hope they have bottomed out!
They say it is difficult to pick the bottom (well, unless with the benefit of hindsight), but somehow it has a bottom-ish feeling to it:
http://www.e-reful.com/news/383.html
Similar headline for Steelfirst (didn't bother to subscribe, probably referring to the same two shipments):
http://www.steelfirst.com/Scrap-and-...king-Coal.html
Discl: holding;
Have been watching this stock for awhile wondering if I should get in. My view was that the price is cheap at 5 cents or so.
But I have to admit I am losing any confidence there will be any reasonable gain in coking coal prices any time soon. Commodities have now hit a 5 year low and China look likely to accept lower growth. I can't see this demand being taken up elsewhere in the next year or 2, and certainly don't see a reasonable recovery in the coal price in the next 2 years.
My other big concern is BRL know how to burn cash. Not sure they have a survivable cost structure in this environment, and if their other mines come under pressure then we'll for sure see another capital raising. It's hard to compete with the big boys in Aussie and with the Aussie dollar depreciating considerably this year it's tough in NZ. it's hard to see any rebound in the Aussie dollar at the moment. But the kiwi on the other hand, although it has come down the last month is still very high. I don't expect any massive drop either. Especially next year when interest rates will continue there upward path keeping the kiwi right up there for the next couple of years. That combined with low coal prices just make this too risky at the moment, with very little scope for upside, IMHO.
I'll keep watching though.
Could be a story for 2016 if they can survive until then. But if thermal coal prices come under more pressure and cut their cashflow...well shareholders will have to dig in their pockets to keep the dream alive.
Hi Flugenbear - you are absolutely correct - this is a high risk share.
If the price for coking coal recovers over say the next 12 months, than the current share price is a steal. On the other hand - if it doesn't, than they will need more money (based on the IMHO quite optimistic price and currency assumptions they put into the recent annual report).
However not sure, whether you really need increased economic growth for the coal price to go up. Lots of mines have by now reduced or stopped production - just keeping the current consumption going is likely to increase the coking coal price over time (steady demand, reduced supply).
Discl: holding ... and reached my personal investment cap for this high risk stock (i.e. not buying more ..). DYOR and only risk money you can afford to loose!
Supply and demand....absolutely true.
No doubt the current coal price will put some out of business or force them to reduce...though I see some are even ramping up in Aussie (Cockatoo) can't really figure out why unless they are still profitable with these margins or they expect a bounce back in CP...or the Aussie $ to continue it's slide...who knows.
Only risk money you can afford to lose...very good advice.
I'm going to keep watching for now. I get the feeling there is a bit more pain to go yet unless the NZD takes a tumble. Though the SP can only go so much lower...it's near the bottom one way or another!
But yes, there certainly could be a pretty penny to be made on this one if it all comes together.
Happy to have picked up more of these at A$ 4c
Maybe Snapiti, and I am bearish on BRL for the time being. But if you view it as an option on the price of Coking Coal with a bottom or say 2 cents (shell value) then at 4 cents its a pretty cheap 10 year? option to hold.
Have not done a B/S but if you view the top end of say $.40c and the bottom at $.02, a Rf rate of 4.5%, do not have any idea what the volatility is, a time period of 10 years till expiry (if nothing has happened by then nothing will) I would venture a guess that $.04 is cheapish?
DYOR my above analysis is just back of envelope musings as I write here and type.
A few months old but seems to be on the money,
https://www.kpmg.com/Global/en/Issue...13-q1-2014.pdf
From an article about Alpha Natural resources, Forbes last week,
"According to the world steel association, global steel demand is projected to grow by around 3.1% in 2014, down from around 3.6% growth seen in 2013, and then further expand to around 3.3% in 2015. While Chinese steel consumption is expected to grow by around 3% this year, it may not help overall met coal demand much since China has also been boosting its met coal production. India, which was ANR’s largest export market last year, could see met coal demand grow further since steel production in the country is expected to grow by around 3.3% in 2014 and by around 4.5% in 2015, on the back of structural reform which will support infrastructure investment. Europe, one of the key markets for Alpha’s metallurgical coal, is expected to increase its steel demand by around 3.1% this year."
Unfortunately, Goldman Sachs has a downbeat view on price..
(2/10/2014)
Goldman Sachs cut its 2015/16 met coal benchmark price projections to $126/$142 per MT (from $140/$147 per MT).
BTW - I’ve just come back from Westport yesterday – I noticed that the rail tracks at all the level crossings over the Ngakawau line are rusty on the rail tops. I did see one train moving up the line but that was all. Normally, there’s be three or four movements a day (you can’t miss them, the rumbling of the wagons can be heard anywhere on the coastal flat) – it was very quiet. It could be just a quiet period, could be stockpiling up the hill or at Ngakawau – I don’t know - this is just what I observed.
More bad news, "China’s move to impose a tariff on coal imports starting on Oct. 15 could have an “unquantifiable impact” on liquidity-constrained coal producers which have already suffered dramatic losses in bond valuations as declining coal prices pose a limitation on cash-flow generation.
The decision by China – the world’s top coal importer – to put a 3% tariff on anthracite and coking coal and 6% tariff on thermal coal reverses a near decade-long policy to remove barriers to imports, making a near-term rebound in coal prices increasingly less likely, analysts say."
If you are using the Sunsir Graph, http://www.sunsirs.com/uk/prodetail-417.html
July 959yuan/6.22 = $154US
Oct 910yuan/6.12 = $149US
Not a huge change given market sentiment. Time will tell.
Coal Coke Prices bottomed at last... http://www.scmp.com/business/commodities/article/1620171/energy-bets-us2-it-has-picked-bottom-coking-coal-market
Happy to have picked up some more at 3.5c Aust
Looks like a bounce off the bottom...http://www.sunsirs.com/uk/prodetail-417.html