The cost of coal is increasing due to many factors including...

The cost of coal is increasing due to many factors including inflation and difficult to attract new young manpower into mining sector. It is much beneficial for young population to work in new age sector like IT, consulting, finance and legal. These hound people are more vocal about green and sustainable energy sources. Coal has provided stable and clean source of power for more than a century now. Most of the power plants are pit head plants means close to coal mine and power is supplied through high voltage transmission line to large cities like Sydney, Melbourne and other capital cities. The solution for high density power use is still not available from renewable sources. Wind stations on land are still not welcoming.
It is surprising that there is no backup plan in Australia for large coal based power plants and it is accepted at Govt and decisions markers level that a solution will be found for cheap and reliable power based on renewable sources. But if it is not found that what is alternate. Nuclear No. Coal possible but no. Hydro not available. Hydrogen, Gas and offshore wind is the bet which most of the governments are taking now. What will be cost for this shift. Related transmission infrastructure requirements for this shift is in planning stage and will itself take more than a decade to implement under current approval scenarios.
I am a bit concerned and many in the decision makers are also when spoken in unofficially capacity but it is more sexy to talk about sustainability in current scenario.
Cost of coal production will continue to increase and will be atleast A$ 150 including royalty and interest. The cost of new coal projects will be higher in Australia. I don’t foresee any new coal projects as well. This is a bit positive for existing players.
I am still invested in coal but has reduced my exposure from above 90 percentage to less than 50 percentage from November 22. This is mainly to protect my capital and not against a sentiment for coal. I feel that coal prices should stabilise around USD 175 to 200 for NEWC. Even at this price WHC, NHC and YAL are undervalued as these companies are debt free and has large cash holdings. Interesting to watch these companies when half yearly reports are released by the BoRd and there sentiments.
A large dividend means board is confident of generating cash in future and conservative dividend means they are not sure of future cash generation.
DYOR