An opportunity for Australian miners - EU ban on Russian coal now in force

Highlights:

• EU has imposed a ban on Russian coal.
• Australian companies have gained market attention post the announcement.
• Australia is amongst the top 5 producers of coal in the world and the top exporter worldwide.

Australian coal miners are gaining huge market attention post the update related to the ban imposed on Russian coal by European Union (EU). Since the update was released, many ASX-listed players from the coal industry witnessed significant growth in their share prices. The EU proposed the ban on Russian coal in April 2022, which came into effect on 10 August 2022.

In terms of producers, China ranks 1 in the list, followed by India, the USA, Indonesia, and Australia. However, in terms of export, Australia ranks 1 globally, followed by Indonesia, Russia, the United States, and South Africa.

Why investors are getting attracted to Australian coal miners?

As highlighted above, Australia is the top exporter of coal in the world. After iron, coal is Australia’s second-largest export.

Australia is the largest exporter of metallurgical coal and the second largest exporter of thermal coal. Because of Russia’s invasion of Ukraine, buyers worldwide are trying to scramble non-Russian coal supplies. Further, since 2021, there has been an increase in the prices of thermal coal significantly from US$90 per ton to more than US$360 per ton. Also, the price of metallurgical coal has increased from US$143 per ton to over US$400 per ton.

 Also, Read our research report on Whitehaven Coal Ltd by clicking here. Since the date of recommendation on 29 June 2022, we witnessed a growth of over 28% by 11 August 2022.

With this background, let us look at some stocks from the coal industry which showed significant growth in share price lately and see their recent progress.

Austchina Holdings Limited (ASX: AUH)

Austchina Holdings is an Australia-based company engaged in the exploration & investment in energy and resources. Its present exposure in the resources and energy sectors includes its Blackall Coal Project, investment interests in copper exploration as well as a holding in Energy from Organic Waste developer Utilitas Group Pty Ltd.

In June 2022 quarterly results, the Company updated that it is in progress to explore alternative technologies to use its coal on-site, which could produce products such as ammonia, methanol, hydrogen, energy as well as other products. Other than this, the Company is continuing with its Due Diligence with contract with Fortress Capital on a technology that could improve AUH’s energy portfolio via the conversion of solid fuels comprising coal, municipal household and commercial waste, biomass, and other material to produce cleaner environmentally responsible electricity.

Further, AUH has tested numerous products comprising its coal from the Blackall coal deposit and another solid commercial waste product. It is pleased with the results.                   

Tigers Realm Coal Ltd (ASX: TIG)

Coal exploration company Tigers Realm Coal aims to become a major supplier of high-quality coking coal to the seaborne market through the development of its assets situated in the neighborhood of the Bering Sea coast in the Russian Far East, Chukotka Autonomous Okrug.

In the June 2022 quarter, the Company mined 329kt of coal. Out of this 124kt was delivered to the port for further sale. Overall, 626kt of coal was mined in the first half of 2022.

TIG started its shipping season in early June. Loading in the June quarter was 147kt. The Company attained the historically highest loading rate of 16kt per day on 30 June with an average loading rate during the quarter of 10kt pwwd.

TIG now expects its sales guidance for 2022 to be in between 850 kt to 1000kt.

Do check our detailed report on TIG stock by clicking here. From our recommendation on 18 May 2022, the shares have delivered a growth of ~18% by 11 August 2022..   

Cokal Limited (ASX: CKA)

Cokal Limited is a coal exploration company with the objective to become a metallurgical coal producer with a global presence. On 10 August 2022, the Company provided an update on the Bumi Barito Mineral coking coal mine. It announced that development continues in the mine, with the first saleable coking coal production on track for September 2022.

The Company confirmed that Krajan Jetty Infrastructure is currently at the final stage of completion. The construction of the bridge at Haul Road KM 7 is complete. Further, the land clearance at the Pit 3 mining area is ongoing per the timeline.

Stock Information:

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au