From a $1 mine to billion in revenue: How Stanmore turned coal into cash
Stanmore Resources has made another step in a dramatic evolution of the company with a deal to buy out its joint venture partner Mitsui’s 20 per cent stake in the old BMC joint venture for $US380 million ($A535 million).
Stanmore has turned an original $1 purchase into a $1 billion turnover. (Photo: Supplied)
Stanmore had previously taken over BHP’s stake in the joint venture which has significantly reshaped the company from its small time origins in central Queensland to a major coal producer.
The purchase price could be reduced by any dividends paid to Mitsui by the holding company before the deal was finalised. Stanmore said it anticipated a significant shareholder dividend would soon be paid.
“Following the previous acquisition of the majority interest in SMC from BHP, this transaction allows Stanmore to consolidate its position as a leading metallurgical coal miner in the Bowen Basin,” chief executive Marcelo Matos said.
“Having 100 per cent control of South Walker Creek and Poitrel, as well as Wards Well and other projects allows Stanmore to maximise value amongst our assets in the region.”
The BHP deal cost Stanmore $US1.2 billion which means the total bill for the old BMC joint venture is close to $US1.6 billion.
Before the BHP deal struck earlier this year, Stanmore was a small player with interests in the Isaac Plains project, which was initially bought for $1, but Stanmore’s owners, Singapore’s Golden Energy and Resources, had a bigger vision.
The latest deal was announced as the Stanmore reported a $US232 million profit for the June half year compared with a $US12 million loss for the same time last year.
The evolution of the company was highlighted by revenue of $US1 billion in the six months compared with $US71.8 million last year, an improvement of 1426 per cent, driven by record prices for coal.
“This has truly been an exciting period for Stanmore,” Matos said.
“We have experienced unprecedented market and peak prices in the first half of 2022, although (we) have seen a major correction since then mostly resulting from the impact of global inflationary pressures, global supply chain disruptions and tightening monetary policy on consumption, steel demand and consequently met coal prices.
“Despite the short term adjustments taking place, we remain confident on the met coal market fundamentals and expect tight supply to continue going forward with long term demand supported by the continued growth in steel production and industrialisation of south east Asia and India.
