Lynch surprised the coal industry when he resigned from Clive Palmer’s Waratah back in January but he was never expected to leave coal mining altogether.

Yesterday afternoon, private company Jack Doolan Capital entered into a sales agreement where Altera will acquire the company through a payment of 210 million Altera shares and 21 million options at A30c each.

Altera will also make a private $20 million placement at 30c per share under the acquisition.

The deal will give Altera control over the four coking coal tenements JDC has acquired in the Central Kalimantan coal region of Indonesia.

But JDC founding executive chairman Lynch plus his coal veteran associates Pat Hanna, Jim Middleton and Domenic Martino will also move onto the board of Altera.

Lynch told ILN that after he left Waratah he looked around to see where the next best opportunity was.

He was well aware of the problems with constrained infrastructure in Australia along with a peaking of coal leases, not to mention the uncertainty caused by super mining tax proposals.

“The opportunities in Australia weren’t anywhere near as attractive as these opportunities we came across in Indonesia,” he said.

He was drawn to Central Kalimantan not only because of its quality coking coal prospectivity, but because of the country’s advancement of its coal industry and a reasonable tax regime.

“They operate on a royalty basis, their royalties are actually a bit higher than Australia, but other taxation arrangements over there are quite lower than Australia, so all up the positive things are you know what you are getting up front.

“In Australia you can invest quite a lot of money and get a nasty surprise closer to the end of the process, that is a downside about Australia these days – it’s actually starting to develop a high sovereign risk. Investment risk in Australia is not as good as it used to be.”

JDC’s coal properties are right next door to BHP Billiton’s Maruwai metallurgical and thermal coal project which contains 63 million tonnes of measured, 33Mt indicated and 658Mt of inferred resources, with the deposit first discovered in the late 90s.

After BHP shelved the $100 million Haju trial mine at the project in June 2009, the major miner sold only 25% of the project to PT Adaro Energy in April this year.

Lynch believes that BHP changed its mind again on the project and will probably start advancing it as a strong local coal producer such as Adaro would not buy into it to “sit on their hands”.

He expects JDC’s Central Kalimantan tenements to have a similar mix of low volatile to mid volatile coking coals, along with some pulverised coal injection coal.

“There is a reason we are very bullish, we have obviously walked around up there and if you’ve worked in coal for 30 years you know what the right stuff looks like.”

One of the tenements straddles a river with coal expected to be in close proximity for an easy barging operation to transport it and generate quick cash flow.

Over time the company could reinvest capital into a more efficient infrastructure chain, but in the mean time there is an opportunity for a low capital entry into the market, Lynch said.

“We think we are sitting on the right commodity at the right time,” he said.

“A hard coking coal will definitely be one of the best commodities around in the next couple of years.

“There is going to be no new sources of supply for at least the next two years.

“We are excited by that. Obviously we are very keen to see if we can get into production quite early.”

There is plenty of exploration ahead, but Lynch has already proven his mettle as the driving force behind Waratah’s exploration in the Galilee Basin of Queensland.

This work underpinned Palmer’s $US5.15 billion joint venture China First project with China Metallurgical Group Corporation, after he acquired Waratah.

Lynch is expecting to get less than a 20% stake in Altera once the acquisition is complete.

Experienced coal geologist Hanna is set to become an executive director of the company, Middleton will become the CEO and Martino, who is a former managing partner of Deloitte Australia and non-executive director of Palmer’s Resourcehouse, will join Altera’s board as a non-executive director.

Altera also holds 13 exploration permits for coal covering a total of 5600 square kilometres in southeast Queensland and the Bowen Basin.

Altera shares closed up 14%, or 4c, to 32c yesterday.