$1 Coal Mines Become Jackpots After Prices Surge
- Vale, Sumitomo sold met coal mine to Stanmore Coal last year
- Metallurgical coal prices have more than doubled this year
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Buying bargain-bin coal mines amid the worst commodity slump in a generation has turned into a savvy bet as prices of the fuel surge.
Stanmore Coal Ltd. bought the Isaac Plains metallurgical coal mine in Australia for A$1 in July 2015 from Brazilian miner Vale SA and Japan’s Sumitomo Corp. when the price of met coal, used to make steel, averaged the lowest in about a decade and just three years after the mine was valued at A$860 million ($659 million). One year later, spot prices have soared above $200 a metric ton as China’s steel mills crank out record volumes while its mines slow production.