Here’s how coal stocks are being impacted by a debate over Victorian power
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Australian coal players can be forgiven for being a little confused as to what the future holds for the commodity in Australia with federal and Victorian Labor apparently not on the same page.
Federal Labor wants to close down all coal-fired power stations in the State, while the Victorian Labor government has just extended the licences of Latrobe Valley power plants Yallourn and Loy Yan.
Australia’s majors Rio Tinto (ASX:RIO), Yancoal (ASX:YAL), Whitehaven Coal (ASX:WHC) and New Hope Corp (ASX:NHC) — account for the bulk of Australia’s thermal coal production.
But there are at least eight other smaller ASX-listed companies aiming to eventually be thermal coal producers.
Amid the uncertainty, six of the eight have lost share price value this year. (See table below).
>> Scroll down for a list of Australia-focused thermal and coking coal stocks, courtesy of leading ASX data provider MakCorp.
The Hazelwood power station was shut down last year – a move that pushed wholesale electricity prices up 85 per cent from 2016 to 2017, according to federal energy minister Josh Frydenberg.
But the Victorian government has now extended the mine licences of the Yallourn and Loy Yang plants to 2051 and 2065, respectively, and implemented a requirement of a minimum of five years’ notice of closure.
Federal Labor’s April 2016 election promise, however, was that it was going to “introduce a framework to kickstart the closure” of coal-fired power stations.
Mr Frydenberg accused the federal Labor party of wanting to put up energy prices, sacrifice energy security and sell out blue-collar workers.
According to the Clean Energy Regulator, in the 2017 financial year four out of the top 10 electricity producing generators were brown coal from Victoria and 17 out of the top 20 were coal.
Meanwhile, the Australian Energy Market Operator has confirmed that over summer the current coal fleet generated at its highest level in 10 years and the number of unplanned outages was 12 per cent lower than last year.
“These facts may be inconvenient for Bill Shorten and federal Labor, who have backed a Greens motion in the Senate that coal has ‘no long-term future in Australia’,” Mr Frydenberg said.
Green energy push forces thermal coal stocks down
Thermal coal has been on the nose for investors for some time given the strong global push for investment in renewable energy sources instead of coal-fired power.
So far in 2018, six of the eight ASX-listed thermal coal explorers have lost share price value.
NSL Consolidated (ASX:NSL) slumped 35 per cent to 1.3c.
The company was previously trying to undertake exploration on four thermal coal tenements in Queensland.
NSL won a recent court case launched against it by Coal Hub, which claimed the company hadn’t spent the required amount on exploration under an agreement.
Greenpower Energy (ASX:GPP), meanwhile, has dipped 56 per cent to 0.7c and Rey Resources (ASX:REY) has fallen 25 per cent to 22c.
Greenpower owns a brown coal exploration licence in the Latrobe Valley, while Rey recently undertook a review of the definitive feasibility study for its Duchess Paradise thermal coal project in the Canning Basin of Western Australia.
The company is testing whether the liquid that comes out of its coal-to-liquid process might be useful as a fertiliser, or “bio-stimulant” in their words.
Bucking the downward trend was Stanmore Coal (ASX:SMR), Allegiance Coal (ASX:AHQ) and Terracom (ASX:TER) – which made gains of between 10 per cent and 46 per cent.
Here’s a list of Australia-focused thermal and coking coal stocks courtesy of leading ASX data provider MakCorp. (Scroll or swipe for full table)
|ASX code||Company||Price change year-to-date||Price Jun 5 (intraday)||Market Cap||Project Name & Commodities|
|AHQ||ALLEGIANCE COAL||0.236842105263||0.047||23.3M||Back Creek Thermal Coal|
|AXE||ARCHER EXPLORATI||-0.233333333333||0.115||21.9M||Leigh Creek Coal|
|AUH||AUSTCHINA HOLDIN||-0.2||0.004||4.5M||Blackall Coal,|
|AQC||AUSTRALIAN PACIF||-0.0709677419355||0.72||35.4M||Dartbrook Coal|
|BHP||BHP BILLITON||0.105121293801||32.8||171.2B||Mt Arthur (Mount Arther) Coal.|
|BCB||BOWEN COKING COA||-0.166666666667||0.015||7.0M||Cooroorah Coking Coal|
|DGR||DGR GLOBAL||-0.173913043478||0.095||57.6M||Argentina, Australia - Coal, oil, gas, gold|
|GPP||GREENPOWER ENERG||-0.5625||0.007||9.1M||Gippsland Basin, Latrobe Valley Coal|
|LNY||LANEWAY RESOURCE||-0.25||0.003||10.0M||Ashford Coking Coal,|
|MMI||METRO MINING||-0.192307692308||0.21||271.3M||Bundi Thermal Coal|
|MRV||MORETON RESOURCE||-0.0833333333333||0.011||30.5M||Mackenzie (Bowen Basin) Thermal/Coking Coal,|
|NHC||NEW HOPE CORP LT||-0.0441767068273||2.38||2.0B||Ashford Coking Coal; Bengalla Thermal Coal|
|NSL||NSL CONSOLIDATED||-0.35||0.013||42.3M||Australian Thermal Coal|
|NCR||NUCOAL RESOURCES||0.571428571429||0.011||9.2M||Dellworth Mining Savoy Hill Coal,|
|REY||REY RESOURCES||-0.254237288136||0.22||46.7M||Duchess Paradise Thermal Coal,|
|RIO||RIO TINTO||0.0718300653595||81.995||134.2B||Hunter Valley Operations (HVO) Coking/Thermal Coal,|
|RMT||RMA ENERGY||-0.666666666667||0.001||2.1M||Bulburrum Coal,|
|SMR||STANMORE COAL LT||0.106870229008||0.725||183.8M||Tennyson Thermal Coal,|
|SRZ||STELLAR RESOURCE||-0.0588235294118||0.016||6.5M||Coober Pedy Coal, Iron Ore|
|TER||TERRACOM||0.45652173913||0.335||132.0M||Blair Athol Thermal Coal|
|WHC||WHITEHAVEN COAL||0.204697986577||5.385||5.5B||Maules Creek Thermal/Coking Coal|
|WLC||WOLLONGONG COAL||0||0.006||56.2M||Russell Vale Colliery Coking Coal|
|WPG||WPG RESOURCES LT||-0.05||0.019||16.3M||Northern Gawler Magnetite, Nickel, Copper, Gold, Coal|
|YAL||YANCOAL AUSTRALI||0.0769230769231||0.14||6.2B||Stratford Duralie Coking Coal, Thermal Coal|
Stockhead is proud to use MakCorp as a provider of great value, accurate and reliable data on ASX-listed mining stocks. For more information head to MakCorp’s website.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.