Agreed on the oil business, it has been a dud. At least it is...

Agreed on the oil business, it has been a dud. At least it is fairly small compared to their net assets. I actually see this Bengalla purchase as a good one, the more I think about it the more I like it. High quality thermal coal, whereas the lower quality coal is seeing reduced demand. Announcement says it is very competitively positioned on the global cost curve (ideally I would hope it is bottom quartile), which is critical both to survival in the tough times and to having great margins during the boom times.

The stage 3 delays have been frustrating I agree. However what you have said has actually made me wonder if it is worth doing the development? Maybe it is a blessing in disguise. From what I've seen new Acland is in the second quartile of cost globally, which is reasonable, but not exceptional. But why not use this low price environment to purchase an even lower cost mine if they are coming up for sale at reasonable prices? They could keep the stage 3 development on the back burner for a few years potentially without costing too much.

I like companies that are cautious about using debt. However once they have shown Bengalla is bringing in a good return, I would be for them doing another similar purchase using debt while coal prices are low, assuming that the return easily covers interest and principal repayments. As long as they kept debt/equity around 50% or lower. That may even be a better option than doing stage 3...