New interest in Coronado Global Resources sale

The Queensland Curragh mining complex that mines thermal and metallurgical coal is Coronado’s major source of income.

Key players within Coronado Global Resources are believed to be in talks with an Indonesian mining group about a sale of assets or the business.

The move comes after the Australian-listed New Hope Coal was said to have made advances.

Some industry sources were pointing to BUMA as the most logical party to be involved. It is the group that agreed to buy Anglo American’s Dawson mine in Queensland for $US455m.

Other potential candidates could be Golden Energy and Resources, a subsidiary of Indonesian conglomerate Sinar Mas Group.

One possibility is that BUMA could partner with Coronado’s 51 per cent private equity owner Energy and Minerals Group and privatise the business.

It would be the operator for its most valuable coal mine, the Curragh mine in Queensland.

Coronado’s future continues to hang in the balance, with its market value at $201m and its share price at 13c after the coal price has fallen below a level where it can profitably mine coal from Curragh.

It has refinanced a $US150m ($230m) asset-based loan with Oaktree Capital Management and had reached a deal with the Queensland government-owned coal-fired power station operator Stanwell, where Stanwell would provide $US150m upfront payment for 800,000 tonnes of thermal coal for five years from 2027.

Half would be fully exposed to the prevailing market price and the other half at a fixed price.

The latest development around Indonesian interest comes with speculation in the market that Czech group Sev.en had been hovering and may have been using third party agents to buy Coronado’s bonds, which had been trading at about 70c in the dollar.

Coronado has bonds worth $US400m with a 9.25 per cent interest rate and first rights to take its mines should it collapse.

EMG floated Coronado in 2018 with a $3.5bn market value and agreed to sell its holding to Sev.en last year, with Oaktree helping to finance the transaction.

But the deal collapsed when it refused to recut the terms what with the falling coal price, say market sources.

The Queensland Curragh mining complex that mines thermal and metallurgical coal is Coronado’s major source of income, but is struggling, with the metallurgical coal price down at about $US190 a tonne – it needs to be more than $US200 a tonne to be profitable.

The resources company is building underground mining operations at Curragh to extract coal at a lower cost.

The business was founded in 2011 and grew through a series of acquisitions in the US and Australia – including the purchase of the Curragh mine in 2017 for $700m.