IPO Watch: $3bn coal play Coronado fails to impress in first week on ASX
US-based Coronado Coal made its debut on the ASX last week but hasn’t yet traded above its Initial Public Offering price of $4.
Coronado — the biggest coal mining float since Yancoal Australia’s $1.5 billion listing in 2012 — claims to the fifth biggest metallurgical (or coking) coal producer globally in 2017.
Metallurgical coal is a low-ash, low-sulphur and low-phosphorus coal that can be used to produce high-grade coking coal – an essential part of the steelmaking process.
The World Steel Association forecasts global steel demand will reach 1.62 billion tonnes this year – an increase of 1.8 per cent over 2017.
Prices for coking (and thermal) coal have more than doubled since the market bottomed out in 2016.
The $3.2 billion Coronado lit up the boards last week after raising $774 million in its IPO.
Coronado traded between $3.49 and $3.84 on its first day before closing at $3.60:
Over the course of its first week, the metallurgical coal producer has dipped as low as $3.05 before recovering somewhat to trade at around $3.48 on Monday afternoon.
Coronado has eight producing mines in Queensland and the US.
It’s Australian operations are in Queensland’s Bowen Basin, Australia’s main source of coking coal:
Through acquisitions, Coronado has grown its coal sales from less than 500,000 tonnes in 2013 to more than 20 million tonnes in 2017 – making it one of the biggest metallurgical coal producers outside of the major diversified miners.