After failing to settle the purchase last year of a coal mine in Queensland from Peabody Coal, controversial businessman Nathan Tinkler is attempting to make a return to the mining industry by acquiring a shuttered mine in the Hunter Valley.
The mine, Dartbrook, produces steaming coal which is mainly used to generate electricity, and was bought from troubled global miner Anglo American on Christmas Eve. Tinkler, via the ASX-listed Australian Pacific Coal, is to pay $25 million upfront to buy the mine as well as pay a further $25 million in mining royalty and processing charges.
Tinkler was appointed the chief executive of Anglo Pacific in early November although how the Dartbrook purchase will be funded is yet to be clarified. The company's most recent annual report disclosed it had negligible cash. Even so, it agreed to pay Tinkler $200,000 when he was appointed the chief executive.
Tinkler emerged on the BRW Rich List when he made his first fortune by parlaying the acquisition of cheap coal assets into a fortune estimated $1.2 billion at the peak in 2012 but lost the lot, and is estimated to now have debts totalling tens of millions of dollars.
He has already been the subject of a biography, Boganaire: The Rise and Fall of Nathan Tinkler which detailed his rise from his days as an electrician, to his subsequent fall.
Earlier this year he lost control of the Newcastle Jets, a soccer club, after earlier losing his extensive horse racing assets.
A glut in supply has driven the price of steaming coal down to long-term lows despite strong demand, which has pushed a host of coal producers into the red with a lengthening list of coal mines up for sale.
Anglo American has been seeking to sell some of its Australian assets for some time, with few takers, while Rio recently offloaded another steaming coal mine, Bengalla, also in the Hunter Valley to New Hope for $US600 ($826) million.
The Dartbrook mine was closed in 2007. An underground mine, there had been talk of it being redeveloped as an open cut operation.
In May last year, Tinkler agreed to pay $US70 million for the Wilkie Creek mine from Peabody Coal, but he failed to raise the money to settle that acquisition.
In the week before Christmas, good quality steaming coal exported from Newcastle was trading at around $US50 a tonne according to IHS McCloskey, with lower quality coal worth around $US38 a tonne. The steep decline in the oil price has pressured coal prices and effectively wiped out much of the domestic coal demand in the US.
