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Coal minnow soars as Tinkler pounces

Tinkler coal

Australian Pacific Coal’s stock jumped more than 200 per cent in a few days after ex-billionaire Nathan Tinkler made a takeover bid for the coal miner.

Tinkler is part of a consortium of companies zeroing in on Australian Pacific Coal, which has upended a separate proposal by Trepang Services that was set to be closed this week.

Australian Pacific Coal owns the Dartbrook coal mine in New South Wales’ Hunter Valley region, which was recently granted a five-year extension for mining operations to take place.

The takeover bid was led by Nakevo, of which Tinkler’s Oceltip Coal 2 is a shareholder, and proposes to provide immediate funding to Australian Pacific Coal through a 20 per cent equity subscription priced at $0.30 per share.

Nakevo would also rectify debt Australian Pacific Coal owes to Trepang Services and its business associates, including pearling billionaire Nicholas Paspaley, effectively snitching Trepang’s separate debt-driven proposal.

Australian Pacific Coal was expected to sign off on Trepang’s offer in a shareholder meeting on Monday; however, this has been postponed to a later date so the coal company can consider Nakevo’s proposal.

The news comes as the coal price continues to soar, with Newcastle coal futures continuing to trade above $US400 per tonne (t) and expected to rise higher as a European Union (EU) ban on Russian coal imports permeates the market.

The EU ban commenced on August 10, which the European Commissions suggested would halt imports of €8 billion ($11.54 billion) of Russian coal.

Fitch Solutions recently adjusted its price predictions for thermal coal from an average of $US230/t in 2022 to $US320/t.

“We expect coal demand to be stronger than we had previously anticipated and this is the reason for our higher price forecast,” Fitch said in a report.

“The main driver of high thermal coal prices since Russia’s invasion of Ukraine in February 2022 has been a rapid diversification of European energy demand away from Russian gas and coal, with a resulting increase in demand for gas and coal from other suppliers.

“As infrastructure bottlenecks have prevented Russia from fully diverting coal and gas exports to markets outside of Europe, the effect has been to reduce the amount of gas and coal available on the global market.”

Australian Pacific Coal was trading at $0.36 at close on Thursday August 25.

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