Coal, the commodity that no-one wants to talk about, is staging a comeback as investment banks warm to the profits from improving prices and a new mine in Australia, being built to meet Indian demand, is nearing completion.
The $2 billion Carmichael mine has been the focus of decade-long protests by environmental campaigners, but India’s Adani Group has overcome all objections to be on the verge of extracting first coal from the 150-foot deep open-pit mine.
Government approvals, which had been slow coming, have been completed with the final hurdle cleared with the signing last week of a royalty agreement with the State of Queensland in a move designed to make the mine less of a political issues at an upcoming election.
First shipments of coal from the Carmichael mine to India are expected next year, growing to an initial annual target of 10 million tonnes.
Carmichael is not the only significant event in a material which investors have shunned because of its poor environmental record as a major source of carbon pollution.
BHP Coal Spin-Off
Other developments in coal include the publication of a series of research reports which have shifted coal from the bottom of investment preferences to the top, and speculation that a major new coal business could be created with the spin-off by BHP Group of it’s coal division as a separate stock-exchange listed company.
Citi said last month that BHP might find it difficult to sell surplus coal assets to a trade buyer so it can focus on high-grade metallurgical, or coking coal, which commands a much higher price than thermal, or electricity-producing coal.
“We think the coal assets will end up being spun out to BHP shareholders as per South 32,” Citi