Former Mining Magnate Seeks Comeback in Battered Coal Sector

  • One-time electrician Tinkler on the hunt for more coal assets
  • Australian Pacific Coal snapped up mine stake from Anglo

Former Billionaire Nathan Tinkler on Latest Coal Venture

Former Australian mining baron Nathan Tinkler is back in the battered coal business and hunting for more investments after a deal last month to acquire assets from Anglo American Plc.

QuickTake Confronting Coal

Cheaper oil prices, which cut diesel fuel costs, a weaker Australian dollar and lower construction costs are making some coal operations competitive, Tinkler said in an interview Wednesday in Sydney. This is even with prices at the lowest levels since 2006 and the industry facing weakening demand growth in China.

“We want to acquire assets that are going to make money in today’s market, assets that are going to be sustainable,” said Tinkler, chief executive officer of Australian Pacific Coal Ltd., which agreed to acquire more than 80 percent of the Dartbrook venture in New South Wales state. “Not make an acquisition and then hope one day down the track, when the coal price turns, we’ll make money.”

The electrician-turned-entrepreneur is trying to make a comeback as thermal coal at Australia’s port of Newcastle languishes at less than $50 a metric ton after five years of declines, according to data from Globalcoal. Tinkler was ranked as Australia’s youngest billionaire at the age of 35 by BRW magazine in 2011 before his wealth was slashed after a series of court cases and asset sales.

The International Energy Agency last month cut its coal demand forecast for a third year, saying the “golden age of coal in China” seemed to be over. Envoys from nearly 200 countries meanwhile took their boldest steps yet to fight climate change by agreeing last month on a pact to limit fossil-fuel pollution.

Tinkler, whose Queensland-based company is valued at A$95 million ($68 million), said he has made offers for other coal assets in the last few years that weren’t accepted. “The vendor probably wishes they took it, and as the buyer, I’m probably glad I didn’t.”

In 2014, Peabody Energy Corp. had agreed to sell the Wilkie Creek mine for $70 million to Tinkler. That deal, which involved different assets, collapsed after Tinkler failed to make payments. In 2013, amid a battle with creditors, he sold shares in Whitehaven Coal Ltd., with Farallon Capital Management LLC paying A$301 million for more than half his stake.

Before it's here, it's on the Bloomberg Terminal.