This week we learnt of two exciting developments in Queensland coal indicative of forward-thinking companies that can see the big picture.
Bowen Coking Coal revealed its plans to buy New Hope Corporation's Lenton joint venture project, which includes the Burton and Leeton mines in Queensland.
BCC executive chairman Nick Jorss hopes the acquisition will make the company the next leading independent Australian Securities Exchange-listed coal producer targeting run-of-mine production of approximately 5 million tonnes per annum by 2024.
Jorss is once again proving himself to be a master strategist when it comes to buying quality assets at a good price.
He famously bought the Isaac Plains mine from Brazilian group Vale for $1 at the depths of the downturn in 2015 while he was running Stanmore Coal.
Isaac Plains is the centre of a Bowen Basin mine complex that includes plans to go underground and other satellite mines.
Stanmore Resources received government approval for an $82 million extension to the Isaac Plains mine at Isaac Downs late last month.
Jorss has also positioned BCC to be the preferred bidder in the sale process for the Bluff pulverised coal injection mine in the Bowen Basin conducted by FTI Consulting as receivers and managers and controllers on behalf of Australian mining contractor MACA.
If Jorss manages to pull these deals off he will be able to secure quality met coal assets that should ride the expected boom in prices driven by demand from Chinese steel mills.
Legendary coal investors Brian and Quentin Flannery are to be long-term strategic investors in BCC through a $7 million placement and a $5.4 million rights issue underwritten by Brian Flannery and Matt Latimore.
Also this week Whitehaven Coal lodged the environmental impact statement for its proposed $1 billion Winchester South deposit in Queensland.
This was another good strategic move by Whitehaven CEO Paul Fynn and his team as it diversifies the company out of NSW.
It could give Whitehaven ownership of a greenfields project in Queensland's met coal heartland expected to produce up to 11Mtpa of met coal over a 30-year mine life.
Coal mining projects are capital intensive requiring long-term commitment and prudent management to last through the inevitable economic and commodity cycles.
Today's successful coal companies have learnt not to gold plate projects when coal prices are high and see their margins squeezed when downturns occur.
Instead they move in and acquire quality coal assets at firesale prices and see their value and productivity rise, which will ultimately reward their loyal investors.
