The future of AZJ, page-284

This is from a certain blog, and is a small extract from an interview with the doyen of SOL, Rob Millner, with SOL owning 39.9 per cent of NHC:

(note hilarious comment about 'COP400').

(AZJ does not just transport coal, but great to see Mr Millner is optimistic about it, currently and into the future):

Matthew Kidman

Okay. Well, if you break that down, you're going to do very well. Get over those first few hurdles. Okay. Let's go to coal. It's interesting what you say about coal and you've done incredibly well.

Long history, Indonesia, New Hope, Acland, and through the Hunter Valley here. And we all know the issues with coal. We've just had the COP26, interesting name for a gathering. And coal had a bit of a reprieve, or a bit of a win.

Rob Millner

They should have called it COP400, the 400 private jets that all flew in.

Matthew Kidman

It was amazing wasn't it? It was the biggest gathering.

Rob Millner

All these people trying to worry about climate change, and all got their own plane. None of them went on a bloody domestic plane.

Matthew Kidman

No.

Rob Millner

Crazy. Crappy.

Matthew Kidman

And they arrive for two days, and then they're out. The whole thing keeps going, it's quite an amazing situation.

But you did mention before that you talked about analog and digital. Now, that was a commercial outcome, but you were faced with a change, and it's not much different this time.

Coal, as I've heard you say, needs a place for quite a while, but in the end of the day, your grandkids or whoever will probably not live in a coal-based world for their power. I could be wrong there, but that's the way the world's heading.

How do you see that? And what role does Soul Patts have, and how do you handle it? Because it's a dual front for you.

It's a very good business that produces a lot of money, but a lot of investors these days have already said, well, we can't invest in that. And so, the asset may never be worth what the cash flows are. So, from that point of view, how do you handle that?

Rob Millner

It's a question with about six or seven fronts on it. I don't know. To me, the question is still out. They're still building high-energy, low-emission power stations as we speak, so they're going to need coal.

All the interviews I do with people on the press and the TV, they won't print, is 14% of the world still not have got running water or power. That's 14%.

So, one-seventh of our population still has no energy, and most of those people are in Asia. There's no gas or no coal in Asia. We have the cleanest coal in Australia and plenty of gas.

At this stage, it appears they're going to be winding down. I don't think there's going to be many more approvals. Our operations will be finished by 2038, so 2050 for New Hope is not a problem for us, anyway.

Matthew Kidman

So your sunset is 2038?

Rob Millner

Yeah. Unless we buy some other assets with longer mine life, but we're still going to need some sort of base power. I don't know whether you saw the figures the other day, if we all had electric cars at the moment, how much increased electricity is needed to charge that.

Matthew Kidman

Incredible. We're racing towards it, but we need more power to do it.

Rob Millner

So, it's a difficult one to answer on the facts that we're facing at the moment. There's a push to end coal and gas, but where all that ends up, I couldn't give you a...

Matthew Kidman

And you're holding in New Hope is 39.9%, close to that?

Rob Millner

Yeah.

Matthew Kidman

What does that mean for your accounting and your control of it? How do you see that?

Rob Millner

We still control it. Our cost base is virtually zero. New Hope over the years has paid out over $1 billion just in special dividends.

Matthew Kidman

Incredible.

Rob Millner

And at the moment, coal is US$160 dollars a tonne. It was US$260 a tonne a month ago. In July last year, it was US$50 a tonne.

Matthew Kidman

Incredibly volatile.

Rob Millner

So, the money Whitehaven and New Hope and Yancoal are making at the moment is incredible.

Matthew Kidman

And this is the cleaner coal around the world, and we all know that coal's got a role to do this transition, and it can't just turn off overnight. It's ridiculous.

But places like India, China, much bigger populations, coal Is nowhere near as clean. Do you have a view on what happens with them?

This is more of a political question about how world coal goes. How do they wean themselves off the energy source they've got at the moment? Because we all know that especially the Indian coal is not great for the environment.

Rob Millner

No. And nor is Chinese coal.

Matthew Kidman

No. That's right.

Rob Millner

And that's what we've just seen in the last period of time when they've cut us out of importing, whether it's wine or coal or whatever it is into China — they've been burning their own dirty coal.

Matthew Kidman

It's an ongoing disaster. They keep turning their production off because of the pollution.

Rob Millner

They're not too worried about the pollution. They just keep burning their own coal, and they didn't even turn up to Glasgow. I don't know. As I said before, I don't know where it all ends up.

Matthew Kidman

No. It's difficult. And then they decide to do some kind of loose deal with the US and cut everyone else out.

Rob Millner

Yeah