A junior’s perspective on coal

By Leith van Onselen

Following on from yesterday’s post from Houses & Holes on the Great coal hangover, Jason Brewer from coal mining junior, Continental Coal, has provided an interesting interview on Switzer TV, where he gave his perspective on the coal industry and the global thermal coal market.

Continental Coal is an Australian listed company that has recently opened three thermal coal mines in South Africa within three years. In particular, Brewer notes that:

• The falling South African currency (the Rand) is helping to offset the falling coal price, which has slid 30% since prices peaked.
• Demand for coal remains strong, however, with China leading the way (accounting for 50% of global demand) and India likely to demand more coal as its economy grows.
• However, cycles appear to be getting shorter and are becoming more volatile, which is making planning more difficult.
• The stock market is “broken” for junior miners. Even if a company meets its targets and delivers on projects, it is difficult to gain traction from investors.
• Nevertheless, coal will remain the dominant electricity source well into the future, which augers well for the industry.