The first coal miner out the blocks to report their quarterly results shows even a much complained about royalty hike hasn’t been able to stop the cash rolling in.

Prices for metallurgical and, especially, thermal coal, remain sky high.

Queensland sells more of the latter, and unlike the New South Wales Government, leapt on the newly-found profitability of the coal sector to lump its miners with royalties ranging up to 40% on coal sold at more than $300/t.

This unsurprisingly drew the ire of the miners, their Japanese trading partners and others who complained the royalty regime would raise many billions more for the State than budgeted and hurt investment in future coal developments.

BHP (ASX:BHP) has said it is not factoring in any capex on its met coal division in the Sunshine State on account of the hike, which includes a 30% tier at $225/t and 20% at prices between $175 and $224.

The top rate in the previous regime was 15% beyond $150/t.

Because it’s a tiered system the higher level of those royalties only kick in when the cash is already flying through the door.

TerraCom (ASX:TER) is the first Queensland to report his results season. And it’s still doing alright.

The $840 million Blair Athol coal mine owner said it September quarter EBITDA came in within forecast at $180 million, including $121.5m from its Queensland ops and $58.8m in South Africa, operating margins respectively of $269 and $31 per tonne.

In Australia, TerraCom reeled in an average coal price of $497/t, finishing the quarter with $119m cash in the bank. Another dividend is expected to be declared in November, just months after a $79.9m return to shareholders paid in the recent September term.


$56.1 million

Those additional royalty payments represented a $56.1 million cost to TerraCom’s operations, according to managing director Danny McCarthy.

Shareholders are still doing alright though. This time last year TER generated EBITDA of just $58.3m.

It pulled in $224m in earnings in the June quarter despite lower selling prices ($403/t vs $497/t in Sept), with both the royalty and a 172,000t reduction in coal sales due to a planned dragline shutdown weighing on earnings.

Blair Athol is forecast to deliver 1.1Mt of coal sales for the first six months of the financial year and 2.2Mt for the full 2023 financial year, but fell to a rate of 1.8Mtpa in the September quarter thanks to the 14-day shutdown.

All up TerraCom delivered 2.34Mt of coal sales or 1.38Mt on an equity basis (it owns just 49% of its South African collieries).


TerraCom (ASX:TER) share price today:




Over to the markets

And a handful of lithium stocks continued to hold the baton for the weak resources sector over the afternoon.

The big miners were down as the mood turned bearish on iron ore, with Dalian Futures off 2.6%.

BHP (ASX:BHP) fell 2.32%, with South32 (ASX:S32) heavily sold off at -2.08%.

Pilbara Minerals (ASX:PLS), Liontown Resources (ASX:LTR), Core Lithium (ASX:CXO) and Lake Resources (ASX:LKE) finished the day in the green as the broader materials and energy sectors sunk 2.11% each.

Gold stocks in the All Ords were down a hefty 2.74% as interest rate concerns weighed on investors’ minds.


Monstars share prices today: