It is interesting to see the ASX coal stocks up this morning on the back of the Grosvenor mine fire. WHC up 4% and CRN up 8%. It is almost a re-run of the S32 Groote Island storm which shut down manganese mining on the island. Groote Island was producing around 12% of the worlds manganese supply. This prompted a rush (delayed) for the other ASX listed manganese producer, Jupiter.

Very roughly, the Grosvenor mine produces around 7mtpa of which around 5mtpa is coking coal and Australia is exporting around 200mtpa. So pretty small beer.

Where the market maybe getting too excited is the impact of this could be not just on Anglo American the owner of the Grosvenor mine. Queensland Dept of resources may crack down on safety at the other miners. That may adversely impact production at WHC (just bought the Queensland BHP met coal assets) and CRN whose principal Coking coal mine is the QLD Curragh mine, though has other mines on the east coast of USA.

If you were to be buying anything on this news it might be a coking coal operator with most of its operations outside of Queensland. Though who really knows.

WHC Acquired Assets.pdf

WHC Q1 FY24.pdf

Taken a 1% position of portfolio Friday 25th August in Whitehaven following release of results last week and pull back in share price on Thursday 24th and Friday 25th August .

This is not where i normally invest and have NO interest in coal playing a role in my long term portfolio but would like to tease out the rational .

In the coming 14months the dividend yield for Whitehaven looks to read as follows :

• 2nd Half 2023 = 0.42c per share . Confirmed but goes ex-dividend on the 31st August.
• Assuming 2024 dividends remain the same ie 32c per share in 1st Half and 42c in 2nd Half
• Total dividends on offer equate to $1.16 per share.

• Closing share price is $6.5 = 17.8% FF.
• Grossed up we are talking 20% plus.

I recognise the risks in light to the tightening monetary environment that's playing out but aren't we in the midst of energy demand being greater than supply and if the monetary tightening does drive spending to be lower and thus thermal coal prices lower isn't the next move for RBA going to reduce rates and thus stimulate economy drive commodity prices higher again.

Please get me to see what i am missing ???

Risk reward seems favourable.

Say what you will about coal but the fact is that coal miners are absolutely creaming it at the moment. Whitehaven's quarterly update showed $1.4 billion cash made in the quarter...the QUARTER! It's only got a $5.4b market cap, meaning it's on less than 1x. Talk about inconvenient truths.

Listened to the investor call. Summary:

• We know we will eventually be replaced by technology
• We have a high-quality product
• In the interim, we will be helping emerging Asian economies continue to expand
• We don’t think proposed emission reduction tariffs will be achievable (and therefore there will still be demand for coal)
• We think there is a future for coal for a decade or more
• And what a way to finish -> Hopefully not too many listeners were offended