You are correct , the future of coal is downward. The international banks stopped funding coal fired power stations some years ago.
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You are correct , the future of coal is downward. The international banks stopped funding coal fired power stations some years ago.
Yes that is about it.
My interest is that I lost a lot of money in PIKE and have followed at a distance the world coal markets feelings.
Interesting that the PIKE accident happened at a time together with the insurance that matched the high value of hard coking coal. Had the accident not happened the fall in value of this coal would have wiped out PIKE anyways as a economic mine -- ask Solid Energy
Again do your own research.
Have no investment in BRL nor will I buy in--- just watching after Pike experence
I wish those of you that want to carry on with coal well---DYOR
Your post infers that no new coal stations are being built. http://energydesk.greenpeace.org/201...waiting-burst/ This article states that China is still commissioning one new power station per week, all be it at reduced generation ie no increase in coal consumption. Coal fired stations are still being built big time in China, India and many other countries in Africa. They are also running a lot cleaner.
As an aside when the process of Lanzatech, a NZ origined company, is given the green light coal's image will change.
http://www.lanzatech.com/china-steel...rcial-project/
Whilst this is still not carbon neutral it will reduce the amount of oil used.
http://www.lanzatech.com/wp-content/...t-1170x273.jpg Chicago, Illinois (April 22, 2015)Taiwan’s largest integrated steel maker, China Steel Corporation (CSC), has announced formal Board approval of a 1400M TWD ($46M USD) capital investment in a LanzaTech commercial ethanol facility. This follows the successful demonstration of the revolutionary carbon recycling platform at the White Biotech (WBT) Demonstration Plant in Kaohsiung using steel mill off gases for ethanol production.
This is, like most science in the media, mostly hype. The Lanzatech process uses carbon monoxide. Well that's good, better to use it than pump it into the air, I guess but efficient fuel combustion produces carbon dioxide which can't be used for anything without another energy source as it is fully oxidised. You can capture carbon dioxide if you can combine it with reduced molecules like methane or hydrogen sulphide but it is not going to significantly address carbon capture in most situations.
Better tell the NZ govt that its HPYE cause they have invested more than $60M of NZ super funds in this company.The genetically modified microbes that Lanza tech uses,consume CO, CO2 and H2S to form an algae which is used to make Ethanol first trialled I understand at Glenbrook steel mill.
Yeah - probably not too many people around who made at current SP a gain ... my average buy in was 4.85 cents - doesn't hurt that much, but still hurts.
Agree with your sentiments re coking coal price, though hoping that it will recover a bit earlier (but this is really pure speculation ...). This is not really about lack of demand - this is about the BHL's and RIO's of the world trying to play Saudi Arabia and flooding the IO and Coking Coal market with cheap coal and ore. I guess they will find out at some stage that they are only damaging themselves (even if mines close - the ore and coal is still there when the price goes up again) - and their shareholders as well as the countries housing their mines (deprived of tax revenue) are hurting as well ...
An algae is a microbe and they don't usually make ethanol. Not saying LanzaTech aren't a good investment, just that they cannot alter the basic chemistry that, at best, burning coal produces carbon dioxide and carbon dioxide cannot be converted into complex organics without additional energy consumption and it is fully oxidised so no more energy can be extracted from it. LanzaTech cannot change that fact or change the image of coal without the use of magic.
Well then please explain how Lanzatech without extra energy are continuously producing Ethanol at 5 plants here, China and Taiwan.
http://www.lanzatech.com/facilities/
Algae is used for producing fuels! Google it.
I don't think its far away that governments will legislate the requirement to treat coal effluents from power stations and mills by such a process when shown to be cost neutral. Coal is still cheaper than oil to generate energy.
There is no replacement for steel on the horizon and the cheapest method of adding carbon to iron ore is the use of coal.
Don't trees convert CO2 and ground nutrients into a fuel of sorts??
LanzaTech are capturing carbon monoxide (not fully oxidised).
Algae produce oil, you can also get them to make hydrogen by starving them of sulfur. Algae use photosynthesis (energy from the sun).
Trees also use photosynthesis to convert carbon dioxide to sugars. Again the energy comes from the sun.
Easy to convert coal into sugar if you use photosynthesis. You don't need LanzaTech for that. Photosynthesis is not that efficient though. If you want to capture energy from the sun, use photovoltaic system (is way more efficient) and you don't need coal.
Bathurst is delisting from the NZX! What does this mean for the share price?
https://www.nzx.com/companies/BRL/announcements/265000
From what I can see, 1 million new orders were placed between that announcement and now, while 100k sell orders removed and the lowest sell price increased.... Buy's are outstripping Sells by a wide margin (2:1) on both NZX and ASX exchanges. Although no trades have taken place.
I think long term it will be good, I mean they saving money, how bad can that be?
Tough day for local holders. Apart from being on the wrong side of the coal price, you now have a currency risk, and perhaps an FIF liability. Very poor move by the board - they must be desparate
Xerof, I first thought you must be joking ... surely - a New Zealand company listed on the ASX can't be subject to the FIF regime? Does not make any sense what-so-ever. However - just checked the most recent IRD's exception list (https://www.ird.govt.nz/resources/8/...ir871-2014.pdf) ... and couldn't find BRL listed on it. So - yes, you might be right - while it is a joke, BRL.ASX would be according to current rules subject to FIF. Maybe they change this still for their next update in July 2015, but I must admit that my faith in the common sense of tax officials has faded over the years - i.e. I don't hold my breath.
On the other hand ... I am not sure, whether we can blame BRL management for this idiocy - it is more the elected politicians (and their predecessors) who created this highly unfair mess called FIF regime.
actually - it might not be as bad as I first thought (but hey - better talk with your tax professional if this change brings your foreign investment above the de minimis rule ... i.e. if it would mean that you have after the listing change more than $50k in Foreign Investment Funds ...
Just looked through IRD's FIF guide (https://www.ird.govt.nz/resources/7/...dd2d/ir461.pdf), and it says:
Given that BRL is still a New Zealand company (just listed on the ASX) it would IMHO not fall under the definition above.Quote:
A FIF is
• a foreign company
• a foreign unit trust
• a foreign superannuation scheme (prior to 1 April 2014)
• a FIF superannuation interest (from 1 April 2014)
• an insurer under a life insurance policy (and the policy is not offered or entered into in New*Zealand)
However - please talk with your tax professional or do your own research - I am NOT a tax professional, just trying to use common sense (which might not be that common after all).
:t_up: Love it.Quote:
just trying to use common sense (which might not be that common after all).
I did say 'perhaps' and certainly wasn't joking.
BP, Your common sense is uncommonly sensible - I couldn't find them on the Companies Office the first time I searched (fat fingers perhaps), so looked up ASIC and found them there (although on second glance, they are registered as a foreign company on ASIC), hence my alert to FIF
Sorry for potentially frightening the daylights out of you:eek2:
Currency risk still stands as a new element of holding this stock though, for those currently holding NZ:BRL
HOLCIM CLOSURE ON TRACK
The Holcim cement plant at Cape Foulwind is on track to close in the second half of 2016. The company announced in 2013 that it would stop making cement in New Zealand and instead build two new cement import terminals, at Timaru and Waitemata. Holcim capital projects manager Ken Cowie said the timeframe remained, and the Westport plant would close later next year. The exact date had yet to be set.
(Greymouth Star – 9 May 2015)
Old news, but yes, this means that international coking coal prices better go up by mid of next year for BRL to stay afloat.
I guess the latest headlines are for the first time in some months somewhat optimistic:
http://www.steelfirst.com/Scrap-and-...king-Coal.html
... but only time will tell whether this is the beginning of the hoped for strengthening (increased demand in Asia meeting reduced supply) or just another blip on the downtrend.
Interesting how 2 directors recently brought about 100k shares each, I mean I realize this is not huge $ values we are talking here, but one would think this purchase shows they believe the company is undervalued...
Im trying to get a grasp on what would be a 'go' scenario on exporting coking coal for BRL..... I haven't got much to base this on, but I note in Feb-14 BRL mentioned "expected operating costs at Escarpment to range from about US120/tonne on start-up, reducing to less than USD90 per tonne" that was back when the exchange rate was roughly 0.82 USD, with the change in exchange rate (now circa 0.72 USD) does this mean that operating costs are about $105USD/T?
What is unclear to me is what the 'expected operating costs' cover, is it inclusive of freight to ports i.e FOB?? Im just working out how it relates to coking coal prices (which I believe are about $117USD at present??)
Does anyone have a good (free) source for coking coal price chart? I have not had much joy in finding anything as yet.
Im trying to find a glimmer of hope to reassure myself that all is not lost!
30Jan15 BRL report indicated $115/ton mined was their current net cost of extraction. Company admin costs if I remember correctly was another $15/ton
NTA 31Dec14 was 2.9 cents.
Since then at least a million in costs has been taken out of the domestic business, wages and oil . Holcim had a plant defect earlier in the year and I understand income is back to same levels as last year. New report should be out end of next month.
If $NZ drops to $AU .90 then at least BRL will be competitive with Aussie miners negating the extra transport costs.
FOB Free on Board. Exporters are usually paid once cargo is loaded on board.
This webpage is stating that Met coal prices were around $85 US.
http://www.mining.com/whats-ahead-fo...to-joy-global/
A lot miners have had to continue production even at a loss to meet transport commitments hence the world oversupply and low prices. Latest news suggests that only now, production down turns and closures that are occurring world wide will reduce the supply side, price rises in the last week or so may confirm this.
Yesterday 9Jun15 Jintang sales for premium HCC were US$94.11 and Aus FOB was US$87.11/ton
Maybe the bottom has been.
Steel first
"Four trades of cargoes of premium hard coking coal were reported; top Australian brands were believed to trade at $90-92 fob, while another deal of lower rank premium hard coking coal was heard concluded at $94-95 cfr.
This is an increase of $3-4 as compared with levels reported earlier.
Steel First's cfr Jingtang premium hard coking coal index surged to $97.15 per tonne, up $3.04 per tonne and the cfr Jingtang hard coking coal index was up $1.14 to $91.40 per tonne.
The fob Australia premium hard coking coal index was up $3.56 to $90.88 per tonne while the fob Australia hard coking coal index was up $0.64 to $84.16 per tonne.
The increase is less a sign of a rally and more a return to "normal" price levels after previous sharp drops, one participant said."
cfr Cost and Frieght
Share price still seems to be extremely week, but hopefully it has bottomed out (time to buy?)... I am still worried that another capital raising (or borrowing or some other way of getting money) may be needed in 1-3 years times to keep the company going (is anyone else thinking this?)
As a lot posters have stated COAL is a dirty word, the share price is probably a reflection of this sentiment. Believing the reports then BRL has money in the bank and is operating cash positive. They are mining up on the plateau in a preparation capacity and selling this limited production into the thermal market. When and if the market recovers they should be well positioned to go. In hind sight the thermal asset purchases have been a life preserver.
A good read.
http://www.mining.com/charts-chinas-...th-collapsing/
From what was in the the annual report, the company still burned through $1m of cash in the quarter ending march (even though operating cash flows was positive), this is what worries me...(hopefully I'm reading it wrong...)
(https://www.nzx.com/files/attachments/212062.pdf)
Cash balance was lower at the end of the quarter due to repayment of borrowings and capital payments for acquisitions. As noted, operating cash flow was mildly positive.
Much is made of coal's bleak outlook and there is little doubt that a lot less will be burned in future. Meanwhile, though, I note that exports from NSW were 5% higher in the nine months to 31 March; coal generates over 40% of global electricity - good luck trying to talk those consumers into switching off!; India continues to build coal burning power stations, with an emphasis on using higher quality, "less dirty" fuel. The glass may be not quite empty yet!
Some interesting points here.
Firmer market for premium quality metallurgical coals
By Hector Forster in London
June 15, 2015 - The Atlantic coking coal market June 15 heard of tightness around premium quality coking coals for loading over the next two months, lending some support to global markets as quarterly price negotiations in Japan continued.
There has been a pick-up in spot prices, with over $90/mt FOB Australia now possible for the highest spec grades, a trader said.
A miner did deals for two Panamaxes at $92/mt for a premium low-vol and $89/mt for a premium blended coal, both for August loadings.
The July monthly contract price for Goonyella in Europe was heard at $92/mt FOB. Spot prices for the coal may have already reached that level, the trader said.
Several European mills were looking to Australia for material, with good spot demand seen for BHP Billiton's main coals, along with other Australian miners in the premium and other categories, according to sources.
Australian tonnages for July were largely spoken for and said to be tight, while August loadings at slightly higher prices were the focal point.
Better availability was seen for low-vols as mid-vols remain harder to secure given some temporary reduced mining activity.
The mid-vol premium segment was particularly tight, and participants said it may not come as a surprise should these coals end up with higher prices than for premium low-vols in Q3 contracts.
A large decline in the benchmark price accord is assured from the second quarter's $109.50/mt FOB Australia, based on the $95/mt FOB offers discussed going into the negotiation.
In Q2 premium mid-vols were priced at parity to reference brands of low-vol, when previously they were agreed at a discount to low-vols, such as German Creek.
US met coals were widely expected to be offered at a price premium to the eventual benchmark, to align with higher costs, buyers and suppliers indicated.
Only some US high-vols, blends and crossover coals with weak coking properties, or sold as PCI, were heard offered or sold below the mid-$90s/mt FOB USEC.
Colombian met coal remained in some demand regionally, with lower domestic coke production said to be helping lower coal procurement prices for traders.
The Platts US low-vol hard coking coal assessment, based on good-quality CAPP low-vol with 58% CSR and 1.5% MMR at 19% VM, was stable at $100.50/mt FOB US East Coast.
The US high-vol A assessment was steady at $106.50/mt FOB USEC. Platts assessed US high-vol B, based on 34% VM coal with 25,000 ddpm, at $99/mt FOB USEC.
Offers for lower quality high-vol were seen in the mid-$90s/mt, with growing expectations any new spot business for non top-tier high-vol, high fluidity coal would be under $100/mt FOB USEC.
Recent spot rise may help miners in Q3 talks
The quarterly benchmark outcome was looking more positive for suppliers than two weeks ago, said a market source who cited the rise in spot prices.
Weakening steel margins in China may feed another bout of negative sentiment and buyers may be cautious to agree a price much above $92/mt FOB, the source said.
A higher benchmark may help US miners' negotiating position as it may narrow any gap between offers against the industry reference and make them more acceptable for buyers.
Surely BRL is worth more than $A15 million?
I'm adding at $A1.5/1.6c
Disc. Hold quite a few on a risk/reward basis. At the moment however, the risk is 'quite large' :-)
I would think that it is, but it seems like a bottom-less pit (in terms of buying with a share price seemingly 'always' going down)...
Holding some already but it is starting to get attractive...surely coal can't be that bad...
TO buy the ASX listed or NZX listed stock is also another question on my mind (given a weaker currency now, and also that they are going to be covered to ASX only shares soon as well)
Don't think it really matters if bought at an equivalent price based on the exchange rate at the time, (excluding the cost of buying A$s if not already holding Australian currency) but if you hold NZ shares there may be 4 days after delisting (30th June to 3rd July) when you can't trade your shares. That is from delisting until registration on the ASX. Not sure about that though. There may be some 'selling forward' mechanism that is provided by brokers.
Good to see a bit of action on the ASX today. Over 5 million through the market ( and I only bought a few of those).
Also good to see a new director buying last Friday even if only 750000 shares. Didn't have to waste 10K if he saw no future.
Looking forward to the quarterly report at the end of July.
I wonder if there is a bit of tax loss selling going on in Au. at the moment.
Disc. Sometimes called Pollyanna.
Found this on the BRL website, chuckle chuckle.
http://www.whaleoil.co.nz/2015/06/wh...al-to-produce/
Anyone know why trading has been suspended on BRL?
delisting - only traded on the ASX going forward.
Ok ..... bought in the interim and got no info from company ...... found it now ..... thks
October quarterly report had 89,113 tons produced at a cost of around $10m, NZ$112.21/ton. Half yearly report was at similar values $115. Assuming CNBC are correct in there forecast for NZ dollar to drop below 62cents US. Then at this cost per ton BRL will be producing at US$69.60. Assuming there has been greater than a million in savings since then for extraction costs then costs per ton would be US$62.70. With production synergies the price might be lower. A lot of ifs.
I think this stock, despite depressed coal prices, is still seriously undervalued.
Next report/update must be out within the month maybe? Should confirm cash flow positive and show impact of dropping dollar... Both good things for the company.
Well, it certainly is not all doom and gloom. Interesting is that the NZ$ price for hard coking coal hardly dropped this year - the falling US$ price is nearly compensated by the dropping NZ$. Throw the low oil price environment (lower operating and transport cost) into the mix, and we could even identify a silver line at the horizon ...
However - given the price of the BRL shares - they are at current basically an option on coking coal. If coking coal goes over the next 12 months up in a meaningful way, than this will turn into a multi-bagger. If it stays low for more than another year or so (when the Westport customer closes its premises), than we can probably say good bye to any residual share value.
Surely Bathurst is worth more than $10m AUD?? what is happening to the share price at the moment? 0.011c??
The previous 2 quarterly updates were released on the 29th of the month, so going by that trend we should receive a quarterly update this week sometime (Wednesday?).
I guess this will show cashflow positive. The value of the company still hinges around the price of coking coal though, which I think dropped about another 10% over the last 4 weeks. From platts dated 20 July in regards to met. coal "Second-tier coals have fallen $10.50/mt since June 19, while first-tier coals have dropped a milder $7.25/mt over the same period"
Unfortunately the spot price is falling faster than the exchange rate so its not cancelling out!
Still tempted to top up at these prices though, surely coking coal prices will recover one day (?)
Giving into your temptation is o.k., as long as you realise that this is highly speculative. I guess the relevant question for BRL is whether coking coal goes up before their inland contracts run out. This is possible (and if it happens the buyer / holder will be nicely rewarded), but it is far from certain. Only buy more shares if you can afford to write them off ...
The thing is, as soon as the met coal market starts showing a sign of turning around, bathurst shares could quite literally double just on that news (like earlier this year around when it went from about 1.8c to over 4c in the space of about a month or so). I am not sure of many other shares on the NZX that have the ability to make a "easy" 100-200% gain in a couple of months, with more room for it to move up (assuming met coal market continues "recover" BRL could be over 10c in a couple of years quite easily I would think).
The question therefore is, will the international met coal price turn around in time for when Bathurst's domestic contracts start to dry up, because if it does turn around before, Bathurst (I think) will be a huge success, but if it doesn't, quite the opposite could happen...
In the short term I am hoping for another cash flow positive report to come up soon...
Except for the fact it's no longer an NZX listed company ;)
I traded out of Bathurst at 2.3 cents shortly after the delisting news. Horrible trend, coal is always going to be needed yes, but long term... it's just not the future and based on how I invest I decided it's no longer the stock for me. I wonder why I bought it in the first place... expensive mistake. Seeing week after week a steady drop to the point a 0.001 cent drop translates to just shy of 10% (a red percentage I would dread to see on any other in my portfolio) makes me happy I cut my losses. I think for now, like left field said, you would be better pursuing other opportunities out there than quickly pouring more money into a leaky ship and doing nothing but hope it stays afloat.
Trouble is Trader Jackson you have to know when to bail on a profit when in uptrend easier said than done!
This is always the problem!
A friend of mine brought BRL in December for 2.8c, 3 months later it was over 4c, he didn't sell... what was looking like an amazing success is now... well not so much. I wonder what exactly caused it to spike all of a sudden earlier this year around March?
Cash reserves up 400k for the quarter. Cash on hand 5.2mill. Not all bad, producing at around US$83/ton
I think this is actually pretty dam good to be honest...
Clearly you are not alone with that opinion! Something like 110 trades went through today, price up 33%. If only I had stuck with my convictions and brought last week like I had been contemplating! Hopefully this is not a blip, but instead is the reversal of a long winded down trend.
Commodity prices and related stocks rebounded Monday, and while it's too soon to call a bottom following a rout in the commodity complex, closely followed market watcher James Paulsen said Monday the outlook could look brighter within a year.
The biggest factor in a commodities turnaround will be the dollar, the Wells Capital Management chief investment strategist said. If it continues to go higher, commodities will remain under pressure.
However, Paulsen said he believes the greenback has been in "peaking mode" since March.
"With a little bit of dollar weakness and with a bounce—not only in United States growth, but also just globally from all the policy stimulus that we've been enacting—if there's a bounce, then I think commodity prices have an excellent chance of surprising and rising over the next year," he told CNBC's "Squawk Alley."
A stronger U.S. currency makes dollar-denominated commodities more expensive for holders of other currencies.
Crude futures rebounded from multimonth lows Monday, and gold hit the highest level since June. Silver and copper were both up about 3 percent.
Meanwhile, the S&P 500 energy and materials sectors led gains on Friday, and industrial stocks rose 1.8 percent.
Paulsen said the rally in names like Caterpillar is more likely due to a technical bounce off the 200-day moving average on Friday than any fundamental change. The announcement that Warren Buffett's Berkshire Hathaway would buy Precision Castparts also likely boosted industrials, he added
Still, he said it he felt fine allocating some investment toward industrials, materials and energy.
"You don't have to buy commodities, but you can buy commodity-like stocks in industrials and materials and energy.
The Canadian stock market, the Australia stock market are all potential plays on that," he said.
I think they were referring to commodity based returns in the Americas. A higher U.S. Dollar would shut down production in the U.S. And help ease the oversupply world wide, a good thing for a NZ producer. There has been a real lag in production decreases, probably contractual obligations, in regard to oversupply. Only now are we starting see these reductions.
Nice to see a bit of upward movement this week, $100,000 turnover today and a close at 2.2c. Not a bad rise from 1.1c a couple of weeks ago but still a long way and wait to go in the coking coal world.
The West Coast could do with a prosperous Coking coal mine right about now!
So what was the reasoning behind the big rise today? There seemed to be some concern around china today... heavy volume as well...
Duplicate post
:mellow:
A road from Denniston to Stockton load out facility and coal to Lyttleton issues are soughted. Anyone know the topography thru this area for that feasibility????
Looks not to bad actually...
http://www.asx.com.au/asx/statistics...idsId=01655904
(hope the link works)
Yes, not going broke, so just patience required for an upturn in the coking coal price and/or off-take agreement/investment.
Export coal "Focus on margin not coal price" certainly something to work towards and great to see, but hard to squeeze a reasonable margin at current prices -costs and coal, however the projected NZ$73 a tonne cash cost of coking coal production for FY16 is a very good start!!
( less than US$48 a tonne in today's money!)
I really like the upside possibility of BRL. From around 2 cps has the potential of multiplying the share price many times.
Disc hold quite a few, some for quite a while, so I may be biased.
that is there FY16 target, on slide 6:
"Reduction of mining costs from FY14 of 40% ... Target FY16 – NZ$73/tonne, average cash cost of mining."
Now I see it - cheers! Yes - sounds like a good target, though it is obviously only that ... and overhead cost come on top of that (though they said that they reduced these as well.
Good though, to see them fighting - though they obviously can't do a lot about their largest competitive barrier - the high transport cost to bring the coal to the next real harbour. To be long term successful they will need as well either a rise in the coking coal price - or a very innovative transport solution.
Has anyone tried to sell their BRL shares on the asx since the delisting on NZX? I trade via ASB Securities and it currently wont let me place a sell order on the asx... as it tells me I don't have any existing shares to sell. Bugger.
The ASX allows several different ways to hold shares. One of them is CHESS, which is probably the closest to our system (with common CSN on the NZX), but per default shares get into an "Issuer sponsored holding". I guess most "full-service" brokers are able to deal with these as well, but it might not fit that neatly into their process - and the e-brokers seem to have problems with them.
However - if you ask your broker to transfer these shares into a CHESS account (just give them a call and they will send you the necessary form), than you can deal with them similar to any NZX shares you might have in your portfolio. In our case the transfer took a couple of days. Might be longer though, in case you first need to apply for a CHESS account.
Anyway - contact your broker and make sure you talk with a real human;), they will be able to sort it out for you.
I thought Hamish earned enough whilst at BRL. Maybe she was just bored? Ah I see it happened before he started at Bathurst. Is this why he resigned?
http://www.stuff.co.nz/business/worl...-welfare-fraud
Could be... don't really think it impacts Bathurst in anyway to be honest, but thoughts welcome.
Interesting times must be close.
With solid energy announcing that they will sell down I wonder if Bathurst are pressured into buying. Will they have to buy?
If they do there must be a rights issue in the wings, which would go down like a lead balloon if they aren't exporting coal.
I don't think Bathurst would be pressured into buying anything... how can the exert pressure on them? Its not Bathurst's fault Solid Energy went under... if anything it could represent a unbelievably cheap buying opportunity by Bathurst... maybe, like that coal mine overseas that sold for $1, Bathurst can work out a deal like this? :t_up: no capital raising needed for that purchase!
From memory, Bathurst's Buller project adjoins Solid Energy's territory in that region. There may be strategic reasons for BRL to acquire those permits/operations but whether they can afford them may be another matter.
There is a rail load out facility at Ikamatua that would come in handy, ex PRC. and maybe the piping that PRC was using to get the coal part way to Ikamatua. Interesting opportunities.
From CNBC
Global miner BHP Billiton expects coal prices to stay weak in the near term, but sees the fuel remaining an important part of the world's energy mix for decades, even amid a push to cut carbon emissions, its coal chief said on Friday.
BHP's coal president Mike Henry .............
............On steel-making, or metallurgical, coal, BHP sees demand rising for many years as China continues to grow and India becomes a major steel producer.
"While China has significant domestic met coal resources, we do not believe they will become wholly self-sufficient," Henry said, adding the country will need to import coal to obtain certain qualities and supply steel mills on the coast.
So met coal (Bathurst's primary focus) might be ok? (at least in the long run)
Also, do you think Bathurst would be interested in buying any of Solid Energy's met coal mines? (do they even have the cash to do this?)
Thoughts welcome
Good question (both of them). There is no doubt for me that the met coal demand will at some stage again go up again (but this still might take years) ... just too many infrastructures worldwide in dire need of repair (like all of Europe and US) or in need to be build in the first place (like India, SE Asia, still lots of potential in China). The question is just ... is BRL in a position to survive long enough until the demand rises again, and are they in a position to compete in the race for lower production cost.
At this stage they can fund themselves until mid 2016 (without new customers / orders), however - given Solid Energy's demise, they might be able to get some of Solids customers, which could be their lifeline for longer.
Re you second question (buying some of Solid Energy's assets): would make sense and is certainly better than having some new neighbour competing for the same customers. Don't think however that Bathurst is able to pay much without capital raising ... and any capital raising would be for a company with a $17m market cap highly dilutive.
Maybe they can buy some of the SE mines as going concern for one dollar, though in doubt about that ... the creditors do want to see real cash, otherwise they could have liquidated immediately.
Anyway - interesting times .. this might be a change of game for BRL, but I guess we will see.
Discl: hold a wee parcel ...
http://www.asx.com.au/asxpdf/2015092...fsk12qjrh5.pdf
http://www.stuff.co.nz/business/7243...ow-coal-prices
It does look like they have done pretty well given the circumstances... lets just hope it can stay afloat during these turbulent times... Will have to keep holding onto our hats...
Thoughts?
Job pruning saw still at work, 1 middle management job gone from Timaru this week
What does everyone think of the resolutions?
http://www.asx.com.au/asxpdf/2015102...mnpc436l50.pdf
In particular the performance rights (and how they are calculated)? Good? Bad?
I haven't had a detailed look but interested to see what people think.
difficult question - how do you expect anybody to know what everyone thinks ;)?
If you are interested in my views .... I spent probably not enough (and at the same time already too much) time with trying to understand the proposed resolutions.
From what I understand - they are trying to incentivise as well the board by throwing shares into the package. The overall amount of shares (given the current SP) does not look too frightening, however - given that their board fees are in the top range of other (and much larger) NZ companies (120k for the chair and 60k for each of the other directors), despite them being just a dwarf miner in hibernation mode with little shareholder value left, would I prefer to see them first reducing their quite outrageous cash fees before they add an additional share based bonus.
Feels like Hamish's spirit is still hovering over the current board - suck'em out as long there is still life ...
Discl: holding a small parcel - but not sure, how much longer ...; If still around as shareholder during the AGM I'm likely to vote against;
Yes I see... I am almost tempted at 0.015 to buy more (my average price is well, well above this price), and surely it is worth a bit more than 0.015 a share (but then again a friend of mine thought it couldn't get any worse than 0.028)
Yes I am also concerned that there isn't alot of shareholder value left, but it is almost inequitable for me to sell now.
Watched an interesting video yesterday that essentially rattled on about how out of date (or non existant) the worlds infrastructure is (roads, railways etc), particularly in the US and how it ultimately needs replacing... I don't know if Bathurst has a direct link to something like this, but I would have thought when the time came to build these things, high quality coal would be one of several things required... such some macro thinking, and I suppose a better question is if Bathurst can last long enough to capitalise on this eventual demand
Next few quarterly cash flow statements will be more crucial than ever
On another note... I also noticed that the control number doesn't work when I go to vote online... (something like 'this meeting isn't available, please try again later') any clue as to why this is?
Agreed - there is a huge need for infrastructure replacement around the globe, what is however sort of missing is the money to pay for it. Nevertheless - demand for coking (and thermal) coal is so far increasing every year for the last century or so ... and while the growth rate is declining - the world uses every year more coal than the year before - and "peak-coal" is still far away on the horizon.
http://www.iea.org/newsroomandevents...r-by-2019.html
So - demand is not the problem (even if the world keeps delaying to build all the infrastructure they should need), supply (too much thereof) is. Problem is that the Rio Tinto's and BHP's of the world decided to do to the coal market what Saudi Arabia does to the world oil market - they are just continuing to flood the market with cheap coal. And if we think that they run at some stage out of cheap coal, we should think again ... last time I checked there is roughly 100 times as much coal than oil in this world - i.e. they probably could do that for the next half millennium or so - and this is ways beyond my investment horizon ;).
Still - BRL has probably the potential to stay in some way in the game supplying the domestic market. What the resource markets are doing is anybody's best guess (and more dependant on political whim than on demand / supply). What goes down might come up again ... and if this happens, than BRL has (if they are still alive) a top quality product to offer.
My frustration is not with the industry ... it is more that the recent board proposals smell again after a board looking more after their self interest, than after their share holders. If they would just swap some of their huge cash fees against a payment in shares (and even if they would give themselves some discount), I would be a quite happy share holder - but just taking a larger and larger piece of a shrinking pie is not on.
Looking at you voting problems ... I suspect you need to wait until you get a personal email (with a personalised link) or a letter (with a personalised control number) asking you to vote. Remember - the voting website always seems to recognise you ... and how would this be possible if everybody uses the same control code? However - it might work, if you have already an account with Link market services ... have a try, if you don't want to wait.
http://www.asx.com.au/asxpdf/2015103...c13mwszv7p.pdf
I think this is quite a good cash flow report! No more net debt as well... Maybe Bathurst does have a chance afterall?
Nice report!!!
Yes very nice. I especially liked the bit about the Buller Escarpment
"The Escarpment will be targeting an initial output of 500,000 tonnes of coking coal per annum for international steel markets
In the coming months will see the mine developed to a stage where it can quickly move into steady state produc
tion to meet potential export demand.
Over the life of the block, total annual production is expected to increase to around 750,000 tonnes".
Would be very happy if Bathurst starts exporting 500,000 tonnes of coal a year - what would this be worth in NZ$?
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Great report! Cash flow positive by over 2 million dollars? I don't think I need to say to much more, although it was interesting they didn't break out the numbers side of things (are they meant to? or did they and I missed something?) Remember major contract is finishing this year... I've read (only vaguely) on hotcooper that people are hoping for another contract to be signed up (for purchases of thermal coal while the premium/met coal is still uneconomical)... next few quarters will be crucial for the company to stay cash flow positive, did anyone see if they mentioned much about outlook?
If they can survive this year and the next, things could be looking very good...!
(thoughts on the above welcome)
Yes, I have already read the report and commented on hotcooper... the most surprising thing (aside from the profit and NTA backing...) is how the share price basically barely moved...!!
agreed. The numbers on thermal coal don't support any rise in share price and even with a confirmation of coking coal operations I have only a modest increase in share price in mind. another capital raising or rights issue needed to if they are to set the escarpment operation alight. I would think which further dilutes the stock
Iron ore price jumped 19% yesterday. Would met coal follow? Steel making needs both raw materials. Separately, Edendale dairy plant in south island completed expansion last month. It would need more thermal coal, which would keep Bathurst alive.
If coking coal prices have bottomed out would this not be a good time for steel manufacturers to secure off-take agreements? If structured well, with a rising coal price in mind, they could provide necessary development funding as well as put a rocket under the share price.
Disc. Have a substantial holding so I could be biased.
I think things may have bottomed out... I note that Bathurst has been steadily rising (albeit off a very low bottom!)
Another cash flow positive quarter... this small coal company seems to be achieving the impossible...!