Part 2: Diversified ASX Coal Miners

In Part 1 of this series I gave an overview of all 32 ASX listed pure-play coal mining and/or exploration companies. In Part 2 of this series, I will give an in-depth overview of the 14 ASX diversified coal miners with a market capitalisation greater than $100 million.

Here is the list of all diversified coal miners and explorers on the ASX. A few of these companies have very minor coal related interests, others have coal as there major source of earnings.

CompanyCountries Present In (Coal Assets Only)Approximate Market Capitalisation
BHP Group LimitedAustralia$115,540,000,000
South 32 LimitedAustralia and South Africa$19,250,000,000
New Century Resource Limited (Planned divestment of coal asset in the future)Australia$429,450,000
Metro Mining LimitedAustralia$193,900,000
REY Resources LimitedAustralia$68,000,000
Laneway Resources LimitedAustralia$40,480,000
Tian Poh ResourcesMongolia$34,790,000
Moreton Resources LimitedAustralia$15,530,000
Hawkstone Mining LimitedSouth Africa$15,000,000
New Age Exploration LimitedUnited Kingdom$5,300,000
Kaili Resources LimitedAustralia$5,300,000
AustChina LimitedAustralia$2,230,000
RMA Energy LimitedAustralia$2,100,000
Aneka TambangIndonesia$1,310,000

BHP Group Limited (ASX: BHP)

BHP, the largest miner in the world owns 10 coal mines, nine of which are in Queensland’s Bowen Basin. BHP’s Mt Arthur Coal coal mine in the Hunter Valley, New South Wales is BHP’s only wholly owned thermal coal mine and the company’s only coal mine in New South Wales. BHP’s only other thermal coal investment is the 33% owned Cerrejón Open-Pit coal mine in Colombia (the other companies which owned the mine are Anglo-American (33%) and Glencore (33%)).

Seven of BHP’s mines are owned by the BHP Mitsubishi Alliance (BMA), a 50:50 joint venture between BHP and Mitsubishi Development. All of these mines produce metallurgical coal. BMA operates the Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge mines. BMA is the largest coal producer and supplier of seaborne metallurgical coal in Australia and the world.

Two of BHP’s coal mines are owned by BHP Mitsui Coal (BMC), a joint venture between BHP and Mitsui (80% BHP : 20% Mitsui). BMC operates the Walker Creek Mine and Poitrel mines in the Bowen Basin. BHP acquired much of its Bowen Basin coal assets when it purchased Utah Development Company from General Electric in 1967.

The return on capital employed has been very high for Queensland Coal, primarily due to high metallurgical coal prices. New South Wales Energy Coal and Cerrejon have also had very respectable returns on capital employed.

South32 Limited (ASX: S32)

South32 was spun out of BHP Billition in 2015. South32’s assets are primarily comprised of Aluminium & Alumina and Manganese & alloys. Metallurgical coal accounted for just 19% of H1 FY19 EBITDA while thermal coal accounted for 4%. Aluminium & Alumina accounted for 35% of EBITDA while Manganese & alloys accounted for 30%.

South32’s coal assets are divided into South Africa Energy Coal and Illawarra Metallurgical Coal. South Africa Energy Coal is reportedly going to be sold. The company is also pursuing the Eagle Downs metallurgical coal project in the Bowen Basin, Queensland. This is close to Whitehaven’s Winchester South Project.

South Africa Energy Coal consists of four coal mines, namely: Khutala Colliery, Klipspruit Colliery, Middelburg Colliery and the Wolvekrans Colliery, as well as three processing plants.

Illawarra Metallurgical Coal consists of two mines namely: Appin and Dendrobium as well as two preparation plants.

New Century Resource Limited (ASX: NCZ)

New Century Resource is an Australian focused miner. The company primarily explores for and mines zinc, silver, lead and other minerals. The company’s Kodiak Coking Coal Project in Alabama, USA is currently on care and maintenance. The company is considering its options regarding finance, joint venture opportunities or disposal of the project.

Metro Mining Limited (ASX: MMI)

Metro Mining predominately mines bauxite in northern Queensland, although the company does have some coal related projects.

Metro Mining has two coal projects, namely the Bundi Project and the Columboola Joint Venture. The Bundi Project EPCs are located near Wandoan in Central Queensland near Glencore’s proposed Wandoan mine and New Hope’s proposed Elimatta Mine.

According the the company’s 2018 Annual Report the Columboola Joint Venture is described as:

“The Columboola Project, located near Miles, Queensland, is a joint Venture (JV) between SinoCoal Resources P/L (51%) and Metro Mining Ltd (49%). The JV is targeting the down-dip extensions of the Macalister coal seams, currently being mined by Yancoal, at the neighbouring Cameby Downs thermal coal deposit. Following the previous years’ work MDL 3003 was successfully granted for the Columboola JV. All coal tenements are in good standing and limited work to update the geological model was completed in 2018. No exploration or field work is planned for 2019″ (Metro Mining 2018 Annual Report pg. 15).

Conclusion

And that wraps up the coal mining and/or exploration companies on the ASX with a market capitalisation greater than $100m. I hope this was useful for anyone conducting their research. If it was, make sure to comment below!

 

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