There are not many metallurgical coal producers in the world. More importantly there is not a great amount of coking or metallurgical coal. There is still less hard coking coal, as is produced from the West Coast of NZ, the Bowen Basin of Qld, and the Illawarra fields of NSW. Western Canada and the USA has some, but it suffers from a long rail freight. The implication is that Chinese and Indian steel mills will be struggling to get the stuff. It will be harder than ever to finance new mines in the current market, so this company strikes me as attractive, even if the NZD is relatively high to the USD, its still a significant discount. The Pike River mine is located on the West Coast of NZ, so it suffers from the inconvenience of panamax (70,000dwt) shiploading. This is not idea for shipments to Asia. They will therefore pay a penalty, but this will be offset by the lower NZD (compared to AUD) and premium character of the coal in terms of ash....if memory serves me correct. I used to study this stuff years ago. Better still the stock which suffered some set backs is falling back to its lows after a capital raising. This stock is listed in Australia and NZ. In NZ, the support is 73c. The company's major shareholder is NZ Oil & Gas, which has supported the issue.Andrew Sheldon www.sheldonthinks.com
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