Coal Junior Exploration Companies

[good news]

MacArthur Coal and Gloucester Coal both up 5% today ..looks like coal price heading north now with China stopping exports as they need the stuff to fil their on power stations.. coal price likely to follow the oil price north ... dont be short.. GCL especially cheap on forward p/e of 3x and potential div yield of 12% on current price..

[clearasmud]

Glocester coal has had an Astron-omical performance since Mar up fm 42c to $1.24. Why?

[Capitalist]

I got a tip this week from the Corporate Banking fraternity to buy coal stock. They are very bullish about it and believe that coal will be the next to run.

I don't know anything about coal. Just food for thought. You do the dishes

[SEC]

Omigod I actually agree with Capitalist arrrrrrrrrrrrgh!!!!!

Cap, FYI coal is black and you burn it.

Good News, don't forget about the coal seniors, more liquidity and leverage. Otherwise fully agree.

SEC

Disc: loads of CEY

[The P.O.D.]

Sec,

What other coal companies around? And what is the difference between them?

Doing a quick search on coal I get EXL,MCC,GCL,CNA,CMK,CEY,AUO. These are split between juniors and rather large players.

EXL, GCL, and CMK look interesting as juniors.

Revhead, if you are out there, what's your take on the matter?

[good news]

UK coal sold their 97% stake in GCL about the beginning of may by way of placement to the market.. before that the stock traded about 100k a year.. the new management are implementing better hedge policy and coming of fixed contracts at the end of this year.. no div policy yet but one should be announced ..

[SEC]

POD, I think you've covered most of the coal co's in your list. Main differences apart from size is the % exports, % of long term contracts and hedging policy. CEY and MCC appeal to me because of their size, liquidity and exposure.

SEC

[good news]

MCC on fire.. up 12%!!

[good news]

japanese power co.s are paying AU52/t for thermal coal 04/05 year as contract prices converge on spot prices.. Chinese and Jap power co. being downgraded as higher energy costs start to bite.. very positive for Newcastle producers..

[thekiwi]

http://www.theaustralian.news.com.au...55E643,00.html

Brokers are hot for coal
By Robin Bromby
July 09, 2004

COAL producers are going to turn their piles of black mineral into piles of cash, according to brokers.

This means that coal company stocks, which have been firing in recent weeks, are likely to stay that way.

Producers New Hope and Gloucester Coal were at 52-week highs yesterday, with New Hope at $1.12 from a low of 40c, and Gloucester at $1.40 against a low of 42c.

ABN Amro has upgraded its coal price forecasts on the basis of expectations that demand from Asia - and not just China - will continue to grow.

This follows a Smith Barney note predicting coking and thermal coal contract prices would lift by $US10 a tonne in the next round of negotiations, taking them to their highest levels in at least 20 years.






ABN Amro has ticked BHP Billiton, Gloucester Coal, New Hope and Rio Tinto as stocks to buy because of their coal revenues.

Centennial Coal, Felix Resources and Macarthur Coal are rated "hold" while only one stock, Austral Coal, is recommended as "reduce".

Analyst Roger Leaning told clients that projections for prices in fiscal 2006 were $US69.50/tonne for coking coal and $US50.75/tonne for thermal coal. In February BHP settled coking coal contracts with Japanese steel mills at $US59.20/tonne.

This meant coal buyers in Asia and elsewhere looked set to pay for a period of under-investment in the coal industry. The penalty would be higher contract prices and the inability to try to get cheaper coal through the spot market.

ABN Amro said the problem over the next two years would be not so much China but broader Asian demand for coal.

For Australian producers, the result would be substantial cash-flow increases.

By 2006, many of the local companies would have either no debt or minimal leveraging, it said.

"This would allow directors to increase dividends, offer capital returns or buy back stock," Mr Leaning said.

"We believe it is also likely that merger and takeover activity will occur at the smaller end of the market and we will see a rationalisation of the NSW coal industry."

Smith Barney's analysts see China turning from a net exporter of coking coal last year to importing a net 5million tonnes this year and 10million tonnes in 2005.

Australian and Canadian producers could lift production by 2006 by only 20million tonnes between them.

Chinese steel production, ending 2003 at 220million tonnes, is projected to reach 360million tonnes a year by 2006.

On the thermal coal front, China's demand is expected to grow 15per cent a year as the country is bringing on new coal-fired generation to solve the acute power shortage.

Twenty-four of the country's provinces are experiencing regular brown-outs.

China is the largest thermal coal market in the world, with 80per cent of its electricity generated by coal-fired station - compared with the US where 25per cent of power comes from coal-fired plants.