A long-term investor in coal, and a billionaire to boot, Mende is one half of the team behind American Metals and Coal International (AMCI). The other half is owned by fellow billionaire, Fritz Kundrun.

The two deeply private investors have been major players in the coal boom that has re-shaped large areas of New South Wales and Queensland over the past 20 years so when you see them heading for the exit alarm bells ring louder than before.

Mende’s sale of 7.8 million Whitehaven shares, reported to the Australian Securities Exchange on August 26 under the innocuous heading of “change in substantial holding”, could have been interpreted in two ways. Either it was:

• a rich man shuffling his assets, or
• a rich man heading for the exit.

The Hog would prefer it to be the first choice, Mende shuffling the paper in his worldwide empire but he fears it was more a case of Mende heading for the exit.

One reason for assuming the worst is that the German-born, New York-based investor stuck with Whitehaven during its darkest days as a plaything of mercurial Australian coal punter, Nathan Tinkler.

When Tinkler’s world started to crumble under the weight of a debt mountain Mende held his position on the Whitehaven share register even after he resigned as a director of the company.

Then came news of the share sale that cut Mende’s stake in the stock from 7.15% to 5.97% and was reported two days before Whitehaven revealed its loss for the 2013 financial year of $82.2 million.

Whitehaven chief executive Paul Flynn said Mende’s share sale was not a vote of no-confidence in the company.

This might be true though it is certainly a vote of lesser confidence as all share sales are because they signal the owner has better things to do with his money.

What Mende did was send a clear signal that he was trimming his coal exposure, something another big coal investor is also doing.

BHP Billiton, one of the world’s biggest coal producers, has echoed Mende’s Whitehaven sell-down by declaring that coal was effectively off its investment agenda.

Hardly a surprise given the low levels of profitability at any of its coal mines but it was still sobering to hear BHP Billiton CEO Andrew Mackenzie spell it out in simple language that coal had been sent to the company’s sin bin.

“We’re probably finished for a time investing in coal,” Mackenzie said in an interview with the Australian Broadcasting Corporation.

Those words could have come from Mende if he was in the habit of granting interviews, which he is not though The Hog does remember lunching with the great man about a decade ago when he was toying with the idea of investing in manganese.

That rare face-to-face encounter was with a very polite man, as billionaires can sometimes be, and it was also an insight into the thinking of an investor who knows when to put money in, and when to take it out.

Coal, which has been top of Mende’s investment list for longer than most people can remember, is being pushed to the back of the list as he rotates money into places where it is more likely to generate profits.

Mackenzie at BHP Billiton is doing the same, signalling he will be investing in petroleum, copper and potash ahead of the company’s recent favourites, iron ore and coal.

The problem both Mende and Mackenzie have identified is that profits from coal have dried up, partly because it is running into stiff environmental and government approvals headwinds but mainly because worldwide supply is exceeding demand.

Over time the problem of excess coal production will correct itself because more high cost mines will close.

Only when that happens, and coal prices recover, will people like Mende and Mackenzie start re-directing their personal and corporate cash into fresh coal investments.