Agree, Thermal coal in Australia is in difficult territory. Despite our high thermal value coal (Cv), Australian costs are too high, but I must add we have seen a noticeable cost and capital reduction over the last year to 18 months.
Hard coking coal is a different story...
Longer term forecasts are indicating a nice uptick in Hard coking coal prices, and whilst the current open pit miners are maximizing volume to reduce unit costs, it will ultimately result in earlier closures or turning them into higher cost producers as the stripping ratio increases over time, cancelling the current oversupply. Underground coking coal will become more competitive through the latest longwall technology and productivity development, as well as lower development capital.
IMO, SMR is well placed to capitalize on this opportunity with it's Belview and Lilyvale assets, and that is the reason I invest in SMR, not for thermal coal.
DYOR
SMR Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
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