Coal International raised GBP20 million in its initial public offering on London's Alternative Investment Market (AIM) late last month. The company has flagged the US and former Soviet Union nations as its initial areas of investment focus, and according to company executive chairman and Cambrian Mining chief John Byrne, a deal in the US could be struck within weeks.

“We are in the final stages of looking at investments that we can bring on immediately. We are looking at two projects in the US at the present time, which both have potential to produce two million tonnes per annum each,” he said.

Coal International will look at both underground and surface metalliferous or thermal coal projects. Byrne told International Longwall News an important criteria for the company’s investment in a project was existing infrastructure.

“We are looking at projects that require minor capital expenditure - I would say less than 10% of what it would cost to bring on mines in Australia.

“The US has a lot of potential production that the market is not aware of – it’s enormous,” he said.

Byrne also believes there is room in the US market for a mid-tier player.

“The market in the US has been dominated by a few majors – other than that there is not a culture for small mining companies. You have a lot of contractors that work for the miners, people that buy coal – but generally it is a very small fragmented industry at the lower end.

“You don’t have small and mid-tier mining companies. To that extent our opportunity is there to walk into that space. We are looking at four to seven mines in total that produce about two million tonnes a year each.”

Byrne said historically small to medium coal companies had relied on debt to finance projects, and when the market experienced a downturn they went under as well.

“We are a debt-adverse company. We are not financing our projects with debt – we are doing it the total opposite of what US mines have done in the past,” he said.

“You have got to be able to cut back production if the market softens. You don’t want to exhaust your reserves paying back the bank.”

Coal International has close ties with Cambrian Mining – with two executive directors including Byrne, involved in both companies. Cambrian will give a right of first refusal to Coal International on all new coal projects outside of North America sourced by Cambrian Mining that fall within Coal International's investment criteria.

Like Cambrian, Coal International will be actively involved in exploiting reserves.