Coal baron pulls up $70m equity raise; slams Labor royalties regime

A Queensland coal baron has taken aim at the former Labor government, saying a lifesaving $70m in equity he’s just raised is about equal to the increased coal royalties introduced by that administration.

Bowen Coking Coal’s Nick Jorss.

Queensland coal baron Nick Jorss is a happy man after unveiling a $70m equity raise for his flagship Bowen Coking Coal.

Bowen Coking Coal had earlier warned the capital raising was critical to the company’s continued financial viability and without it faced genuine financial difficulties.

“It has been a hard slog but I’m relieved we have finalised the raise,” Jorss told your diarist. He thanked the company’s existing shareholders including Crocodile Capital Funds and Brian Flannery’s Illwella Group for their support. Jorss also took aim at the former State Labor Government for the company’s predicament, saying the money raised was about equal to the increased coal royalties introduced by that administration.

He says he is hoping for a better hearing and increased consultation from the new LNP government led by David Crisafulli. Jorss says the current royalty regime continues to be a major impediment for the company.

Bowen Coking Coal’s Nick Jorss unveils capital raise.

“The royalty take of $60.2 million this year soaked up all our pre-royalty operating cash flow for the year, which is extremely disappointing,” Jorss says.

“Having invested significant capital in our operations our investors and financiers have yet to make a return on this investment while paying these hefty taxes to the Queensland Government. Maintaining the world’s highest royalty tax regime in Queensland is not compatible with a strong and vibrant coal industry and encouraging further investment.”

The equity raising was undertaken to provide Bowen Coking with the balance sheet strength to fund the Burton Mine Complex, rail and port prepayments and guarantees, and general working capital requirements. “We are also very pleased to have the support of our debt holders Taurus and New Hope, who have demonstrated this support by extending payment terms and converting debt into equity,” Jorss says.

King coal

Coal was a big issue at last weekend’s State election.’

Research by Coal Australia, the new peak body formed by Jorss and other industry leaders, showed that voters recognised the importance of coal to the state’s economy.

Roughly 40 per cent of global steelmaking coal exports come from Queensland, with the resource essential to meet growing demand driven by markets like India and Southeast Asia. Jorss notes that in Queensland coal communities, the swings against the former Miles-Labor Government were significantly stronger than elsewhere.

“The average swing against the Labor government in coal communities was 10.9 per cent versus 6.6 per cent in non-coal community electorates,” Jorss says.

Former Resources and Critical Minerals Minister Scott Stewart,

“This result proves the strength of the coal industry, its workers and the communities that support them in determining election results. Especially when their livelihoods have been so wrongly politicised.”

He says the dissatisfaction among Queenslanders with the former Labor Government’s energy and mining policies was also clear in the electorate’s treatment of key former ministers. Resources Minister Scott Stewart lost his once safe seat of Townsville, with a swing of more than 9 per cent against him. “This election result gives a clear message to the former Labor Government, that the coal industry is here to stay, and that coal communities will vote according to their interests,” he says.

“Coal communities have resoundingly rejected the Miles-Labor government’s punitive policies on mine licences and royalties, because they recognised the importance of the industry to the livelihoods and prosperity of all Queenslanders.”