Hogsback was reminded of the big-to-bigger paradigm when he saw the latest trade data from the Australian Bureau of Statistics, which valued 2017 coal exports at $56.5 billion, 35% higher than 2016. This is the highest ever annual value of coal exports – the previous record was $46.7 billion in 2011.
Despite what he have been hearing from coal naysayers, banks, charities and other assorted recalcitrants, coal is actually getting even bigger.
This is despite federal and state politicians who can’t make up their minds whether they support major coal projects.
Queensland Premier Annastacia Palaszczuk has done so many backflips over Adani’s proposed $16.5 billion Carmichael coal and infrastructure project in the Galilee Basin that she should consider joining the Australian gymnastics team at the Commonwealth Games while it is running at the Gold Coast.
Going to the big-to-small mantra, one must think of young Nathan Tinkler, who was once considered Australia’s youngest coal billionaire and with a waist line roughly in proportion to his net worth.
After picking up the Maules Creek from Rio Tinto for $480 million at the height of the global financial crisis, Tinkler laid down this foundation asset for his Aston Resources, which eventually folded into the Whitehaven Coal company.
Tinkler, buoyed by his uncanny sense to snatch an opportunity when he saw one, went on a horse, car, soccer and rugby league team buying spree.
Unfortunately his profligate spending coincided with a deep plunge in the coal price that also sunk his ability to repay his not insubstantial debts.
A shadow of his former large self, Tinkler slunk out of Australia and sought anonymity in Singapore.
Whitehaven went on to do bigger and better things and despite its shares reaching a low 34c it now trades at a healthy $4.54 with the help of a very productive Maules Creek open cut mine.
Ironically, it was another opportunistic purchase from Rio Tinto Coal by TerraCom of the Blair Athol mine for $1 that might illustrate the big-small-big scenario.
The historic mine, which had been shuttered for four years, achieved 281,799 tonnes of saleable production in the December quarter after TerraCom took it over.
And so the cycle goes on, hopefully for the bigger and better in the end.
