a new res is born, page-13

Your wrong,Barnsty.

Courtesy drillinto,CCC thread:

April 08, 2010

Coal: The Contrarians Investment
By Joe Hung, Editor, Caseys Energy Report
www.minesite.com/aus.html

Imagine the price of gold jumping to US$1,500 overnight... what would that do to the price of junior mining companies? Thats what just happened to the price of coal it jumped 38 per cent in one day!
Coal is dirty, its dusty, and it sends environmentalists into a tizzy. Its also the most rapidly growing fuel source in the world, its broadly distributed with almost 70 countries having economically recoverable resources, and the energy found in it still exceeds that in all other fossil fuels combined.

Whether you love it or hate it, coal will be playing the most important role in global energy supply over the next 50 years and it is the focused investor who stands to profit from this. As far as energy prices go, coal has historically been lower and less volatile than oil and gas.

For developing nations, this makes coal a first pick as an energy source, and combined with considerable deposits, it is simply the cheapest and most convenient thing around. This isnt to say its not important for the rest of the world: in the United States, almost 50 per cent of all electricity generated and 90 per cent of the steel production is fired by coal.

Where it gets really interesting is when we look at the demand for thermal coal (the coal used to generate electricity) from the emerging Asian markets. With looser environmental concerns, the emissions cap threat that is dogging producers in the United States and, to a lesser extent, Canada, is not quite as real here.

India is seeing rising demand even as coal resources shrink, while China consumes almost half of the worlds production of coal each year. With a rapidly expanding industrial sector that needs constant fueling, and cleaner alternatives still too expensive, China and India are out shopping and undeveloped coal resources from Mozambique to Canada are the hot items. All of which makes the companies holding on to these assets prime targets for takeovers and joint ventures.

Adding the sparkle to this rather lucrative picture is that the European and South American companies that were dependent on Asian coal exports are now looking towards North America for exports.

Then there is metallurgical coal. Known more widely as coking coal, it is essential in refining iron ore and the production of steel, and carries none of the environmental stigma that comes with thermal coal. Nor is it as abundant as thermal coal, since only a relatively narrow range of coal rank and compositions make good coking coals.

It thus demands a much higher price. Any industrialized nation has a high demand for steel, and with housing booms and rapid infrastructure development, Japan, China, India, and Korea (to name a few countries) are desperate seeking to fuel their growing appetite.

With the demand for thermal and coking coals becoming red-hot in the strong Asian markets, the team at Caseys Energy Report knows coal is the invisible bull market.

In 2009, Chinas total coal imports tripled, reaching 125 million tonnes, and last month it signed yet another multi-billion coal supply contract. Indias growing negative coal balance saw a record-breaking 80 million tonnes of coal imported last year and that number is set to rise for 2010. The global energy market is set, and the profits are there for the taking.