I don't know how you can see BA as a mistake. Have a look at the sp from a couple of years back when they announced the acquisition until now. Best 'mistake' they ever made from what I can see.
TER well placed to take advantage of current market conditions.
Strong Asian demand boosts coal exports.
Matt Chambers
Senior resources reporter
Australian thermal coal export earnings and volumes are running at record rates on the back of strong Asian power station demand, boosting returns for miners that have increased their stake in the sector and improving the business case for Adani’s Carmichael project in Queensland’s Galilee Basin.
The most recent Australian Bureau of Statistics data shows exports of thermal coal rose 14 per cent in July from the previous month to a record $2.45 billion.
Export volumes rose 10 per cent to a record 19.87 million ¬tonnes, representing an annual rate of 238 million tonnes.
Federal Resources Minister Matt Canavan said the figures backed up previous expectations that Australia’s high-energy coal would be in demand from Asia’s growing coal-fired power sector as it chased better air quality and lower emissions.
He said it also showed there was strong potential to open up the Galilee Basin.
“Those who keep saying coal is dead get proven wrong time and time again,” Senator Canavan told The Australian.
“It has been clear for years that with so many coal stations being built in Asia there was always going to be strong demand for Australian coal in coming years.”
The strong thermal coal exports come as combined exports of east coast thermal coal, used to generate electricity, and coking coal, used to make steel, overtake West Australian exports of iron ore as the nation’s top export.
According to the ABS data, July’s combined coal exports beat iron ore for the third straight month, coming in at $5.58bn, compared to iron ore’s $4.74bn.
Bloomberg Intelligence mining analyst Andrew Cosgrove said seaborne thermal coal prices were likely to remain well-¬supported for the rest of the year because of supply constraints in India and China.
“As a result, we expect an even tighter seaborne market by the end of the year,” Mr Cosgrove said.
“Overall, (Australian) exports appear to be supported by sustained demand in China.”
Chinese coal-fired power generation was up 7.3 per cent in the first seven months of this year, from a year earlier.
And Australia’s higher-quality coal, in terms of energy content, is being favoured over domestic mines and import competitors such as Indonesia as China tries to combat air pollution.
When coking and thermal coal revenue is split, thermal coal is Australia’s fourth-biggest export after iron ore, LNG and coking coal.
Prices in Australian dollars surged to a 10-year high of $165 a tonne on July 30 as US dollar benchmark prices rose on strong demand and the exchange rate slipped.
Yesterday, Newcastle coal ¬prices were trading at $US114 a tonne, not far off the six-year high of $US122.28 a tonne they hit at the end of July.
And they are still a lot higher than the $US94 price the NSW budget mentioned in June when it boosted its coal royalty assumptions for 2017-18 by $111m.
If this price stays at current levels, it would translate to an extra $360m for NSW this year based on sensitivities listed in the budget.
The most recent official forecast from the Industry Department’s office of the chief economist predicts 2018-19 thermal coal export revenue to remain flat at $223m from 199 million tonnes of exports.
While it is early days, the July 2018 revenue figure is 31 per cent up on July 2017.
Senator Canavan said the state of the coal markets supported investment in the Galilee Basin.
“The market price has been hovering at more than $US100 a tonne for some time and analysts think it (Adani’s project) the coal can be produced at around $US40-$US60,” he said.
In 2016, Wood Mackenzie estimated Adani would have a cash cost of $US50 a tonne to deliver the coal to port and that it expected the mine to be developed at its long-term coal price assumption of $US74 as tonne.
The strength in coal prices has favoured those prepared to invest against a growing campaign and activism against thermal coal.
Shares of New Hope have risen 68 per cent since the start of May. Whitehaven Coal, which mines thermal and coking coal, is up 12 per cent.
(20min delay)