We still wants BHP coal mines, says new Coronado chief
Coronado Global Resources’ new chief, Douglas Thompson, says his company is still in the hunt for BHP’s unwanted Queensland coal assets.
Incoming Coronado Global Resources boss Douglas Thompson has confirmed the company is still in the hunt for BHP’s unwanted Queensland coal assets, saying the company sees value in the mines despite the impact of the Queensland coal royalty rise.
Mr Thompson replaced founder Gerry Spindler as Coronado’s chief executive after the company’s annual shareholder meeting on Thursday.
He said the company was still on the hunt for new assets despite Coronado confirming in late April it had walked away from another proposed US acquisition.
Over the past two years Coronado has also walked away from merger negotiations with US coal miners Arch Resources and Peabody Energy.
BHP and Mitsubishi own the Daunia and Blackwater coking coal mines in Queensland through their BMA joint venture, and BHP put the mines up for sale in February as it moved to slim down its Australian coal portfolio.
The sale is said to have attracted the interest of a substantial number of buyers, with Australian majors such as Yancoal, Whitehaven and Stanmore – which bought BHP’s BMC mines in 2022 – said to be vying with international player such as India’s JWC and US giant Peabody for control of the mines.
BHP expects to close their sale by the end of 2023.
Blackwater is next door to Coronado’s existing Curragh operations and Mr Thompson confirmed the company is one of the contenders for the mine, and is “deep” in due diligence investigations, saying the potential operating synergies should give the US and Australian operator an edge over potential rivals for the mine.
“We know the mine well, and sometimes that plays to your advantage or to your disadvantage. But the synergies are clearly in our favour with the adjacency of operations, the ability to trade from their blend – there’s lots of synergies at play to our favour,” he said.
“So if you had a net present value calculation and everybody looked at things the same way, you’d say that we have an advantage.”
But Mr Thompson said Coronado would not overpay for assets, particularly in light of last year’s Queensland coal royalty hike that contributed to a tripling of its payments to the state government in 2022 to $US494m.
“We will look at that operation and compare it against other opportunities and we will make sure that it’s the right investment opportunity for our business,” he said.
“But the royalty rate would be definitely be an input, and that investment would have to compete against other parts of the world, like in the US, we you don’t have that level of burden.”
Mr Thompson said the coal sector remains “in dialogue” with the Queensland Treasurer over the royalty rate increase, but said he was not optimistic that the widely criticised royalty hike would turn out to be a temporary measure.
“But a dialogue is open and we’re talking about the impact to the industry and how government and mining can work together to secure the future of investments,” he said.
Coronado shares closed down 6c to $1.32 on Thursday.