Ann: Company Update, page-169

I was having a read up on the rise in coal prices over the last 12 month mainly because I was interested to know the macro dynamics and why semi coking coal had risen by 40% over this period when hard coking coal has risen 80%.
In deed with the loss of production of semi coking coal from the Bowen(albeit temporary go SMR) one could easily argue it should be the other way round.
As it turns out it did not take long to find out why..........over the last 12 months nearly every country that imports Chinese steel has been complaining of the lack of quality(mainly strength).
If it was just one or two countries complaining you could be sure it is coming from with in the local industry as a form of localized trade protectionism (propaganda) but the internet of spies does not lie in this case and it is clear the problem is very wide spread.
The world is demanding a higher quality of steel and the big steel producers have taken notice.
As we know the better quality the coking coal is the better quality the steel is and that's the industry advantage BRL has with having the best coking coal in the business.
Many bears say demand for coal is falling......for me this is a way to broader statement as to make steel you need coking coal and to make high quality steel you need high quality coking coal.
For me all this add's a safety net to my BRL investment.
During my research last night it also came apparent that many countries and companies have to export thermal coal for a loss, almost like a by product to coking coal, as they do not have a domestic market or the domestic market is over supplied.
This is another safety net under my BRL investment as they achieve a healthy profit on domestic thermal coal that others could only dream of. They also do not have to export any.
Yes there are many risks involved in commodity investments but in BRL case the tail winds and the current SP offer up a very good opportunity.