How these five ASX coal stocks have performed so far this year

Highlights

• White Energy has completed the strategic acquisition of the Tindal and Maranoa projects
• New Age Exploration has received a robust economic review of the Lochinvar metallurgical coal project
• Tiger Realms to increase production and sales guidance on the backdrop of the first nine-month performance
• Bathurst Resources on track to achieve a full-year EBITDA guidance of AU$120-AU$130 million

Coal is experiencing a continued robust demand and tight supplies. Europe fears shortages of natural gas for power generation and has shifted its focus to coal. The electricity demand has also increased following the heatwave and economic activities. Recently, wet weather and flooding caused problems in Australian coal mines. With the mismatch in demand and supply, coal prices surged and were at a record high in September.

Coal trade is based on three benchmark prices: Newcastle coal futures are used for Asia, the Rotterdam Contract for Europe, and the Richards Bay price for coal loaded from South Africa. Following market conditions, let us see the recent performance of some ASX coal stocks.

White Energy Company Ltd. (ASX:WEC)

Australia-based mineral exploration company White Energy is the exclusive worldwide licensee of Binderless Coal Briquetting (BCB) technology. BCB upgrades high moisture, low-value sub-bituminous, and lignite coals through cost-effective hydration and compaction processes. White Energy recently used BCB technology to upgrade metallurgical and thermal coal fines.

White Energy also performs exploration activities for gold, copper, zinc and rare earth elements. The company has projects in Africa, North America, Australia, Indonesia, and China.

White Energy recently inked a Share Sale and Purchase Agreement to buy Fiddlers Creek Mining Company Pty Ltd. The strategic acquisition of the Tindal and Maranoa projects has exploration tenements with the potential for zinc, copper, gold, and rare earth elements.  

River Energy JV Ltd., a 51%-owned subsidiary of WEC, is exploring opportunities for the BCB application in South Africa. A South African power producer has successfully tested BCB technology for six tonnes of coal fines.

New Age Exploration Ltd. (ASX:NAE)

Minerals and metals exploration and development company, New Age Exploration, is focused on gold projects in the Pilbara district of Western Australia, and in Otago, New Zealand. The company also has an advanced coking coal project in Lochinvar, the United Kingdom.

The company received a review of the Scoping Study of the Lochinvar metallurgical coal project. The report confirmed that the economics of the project is robust. The project has a total resource estimate of 111 million tonnes within nine-foot and six-foot seams.  

Data: ASX as on 16 December 2022

Tigers Realm Coal Ltd. (ASX:TIG)

Tigers Realm Coal Ltd. is an Australia-based company engaged in the production of coking and thermal coal. The company has operations in Chukotka Autonomous Okrug. There are two segments: the Amaam North Project and the Amaam Project. Unwashed coal products are supplied to North Asian steel and thermal coal markets from the Amaam North Project.

Tigers Realm continued to operate as planned while assessing the risks involved in Russia’s invasion of Ukraine. The company produced 1131 kt coal till the September quarter, which is 57% higher than the corresponding period last year.

TIG believes it can increase production and sales guidance following the nine-month performance.

Austchina Holdings Ltd. (AUH)

Australia-based exploration company Austchina Holdings has the vision to develop energy markets via targeted minerals and investments. The company’s portfolio has the Blackall Coal project, copper exploration and holding in energy from organic waste. The maiden Resource Estimate of the Blackall Coal project reported 1.3 billion tonnes of coal in accordance with the JORC code.

Austchina continues to explore alternative technologies to use coal to produce ammonia, hydrogen, methanol, etc. The company announced satisfactory outcomes after testing coal from the Blackall project and the solid commercial waste product. AUH believes the process is scalable to reduce carbon emissions and energy production.

AUH has an agreement with Fortress Capital to enhance its energy portfolio by converting solid fuels into cleaner electricity.

Image: © Chuiko1967 | Megapixl.com

Bathurst Resources Ltd. (BRL)

Coal mining company Bathurst Resources is the leading coal producer in New Zealand. The company provides energy for agri-business, schools, hospitals and other key players of the economy. Bathurst exports high-quality coal for steel production in Japan, India, China, South Korea, and Australia. Bathurst has four operating mines in South Island and North Island: Stockton and Takitimu; Rotowaro and Maramarua.

Cascade, Escarpment and Canterbury are the other three mines.

Bathurst recently revealed that the company is on track to achieve a full-year EBITDA guidance of NZ$120-NZ$130 million. The Buller project has reached the final investment decision stage. The Stockton mine shipped a total of 261 kt of coal in the September quarter.

The Rotowaro mine managed the shortfall in Maramarua coal production. Wet weather impacted the removal of overburden and production at both the mines. The Crown Mountain project’s public technical review of the environmental application is estimated to be in early 2023.