Australia’s former mining magnate Nathan Tinkler ready to re-enter battered coal sector; Acquires big stake in Dartbrook venture

Even as many miners are mulling losses and trying to exit coal mining operations in Australia, a former mining baron is readying to re-enter the battered coal sector. It is, Nathan Tinkler, who is scouting for more acquisitions after acquiring the assets of Anglo American Plc in December end.

Tinkler, now the CEO of Australian Pacific Coal Ltd acquired more than 80 percent of the Dartbrook venture in New South Wales state. Braving the general outlook on coal mining sector, Tinkler is reposing confidence in the current operating conditions.

According to Tinkler, cheaper oil prices have reduced fuel costs and the weaker Australian dollar and lower construction costs have created congenial conditions for making coal operations competitive. This is despite prices staying lower and demand from China not showing any increase.

Youngest billionaire

In 2011, BRW magazine adjudged Tinkler as Australia’s youngest billionaire at the age of 35. He lost considerable wealth in litigations and asset sales, reports Bloomberg.

Tinkler’s Queensland-based company, valued at AU$95 million is looking for viable coal assets.

“We want to acquire assets that are going to make money in today’s market, assets that are going to be sustainable,” said Tinkler.

The report notes that the entrepreneur is staging a comeback in coal mines at a time thermal coal at the port of Newcastle is at less than AU$50 per metric ton, which is a five year low, according to GlobalCOAL. The demand is also grim as International Energy Agency cut its coal demand forecast and said “golden age of coal in China” is seemingly over.

Australia's high quality coal

Meanwhile, Tinkler told Sky News in an interview that Australia's high quality coal will have a bright future and continue to impress markets such as Japan, South Korea and Taiwan.

“Australia's in a different position to the rest of the world,” Tinkler said and added that “we have very high quality coal and that's going to be in demand.”

As mentioned, Tinkler's Australian Pacific Coal acquired stake in the Dartbrook Mine in New South Wales Hunter Valley and he is raising AU$30 million through share placement to fund the venture.

Tinkler also said he is ready to convince anti-coal mining protesters in the Hunter Valley including anti-coal advocates like radio host Alan Jones and retailer Gerry Harvey. The horse breeders in the region have been opposing coal mining as they fear expansion of the coal industry into the whole region.