I always regarded the Eagle Downs holding as a trading card - to build out with partnerships or M&A with neighbours or swap for advantage, backed by S32's willingness to commit capital.
Things changed. The Chinese JV partner is unwilling/unable to invest, Whitehaven next door is going alone on a mediocre quality steaming/coking development. Investor appetite for fossil fuels of any sort declined.
So S32 tabled this card: buy Eagle out, JV with us, sell us a complimentary project. Let's negotiate.
Bowen Basin hosts the finest metallurgical coal in the world and will be producing as long as steel needs coal. While miners are ditching steaming coal assets, met coal remains attractive and no Bowen holder is shifting their position.
Behind the scenes, everyone is talking - polite, noncommittal conversations over cups of tea.
We will have to wait.
Ash
S32 Price at posting:
$2.86 Sentiment: Buy Disclosure: Held
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