Anglo Pacific Group PLC is set for a bumper year as coking coal hit its highest price for five years.
Anglo has royalty concessions at two coal operations in Australia – Kestrel (coking) operated by Rio Tinto PLC and Narrabri (thermal) by Whitehaven Coal.
Benchmark hard coking coal contracts for the first quarter of 2017 have settled at US$285 per tonne Anglo noted today or 43% more than the previous quarter.
It is the highest settlement price since the same period in 2011 and equal to the fourth highest on record in US dollar terms, Anglo added.
Key for Anglo, in addition to the price, is how much production from the mines comes from its concession areas and Julian Treger, chief executive, said this was looking promising as well.
“Anglo Pacific has royalties over the sales of coking coal at the Kestrel mine in Australia where the majority of production is expected to be within the Group’s private royalty land during the next twelve months.
“The recent hard coking contract price settlements are materially above the levels we have seen in the past years and significantly higher than our previous assumptions. This should markedly improve our income and dividend cover next year.
“In addition, the weakness of the pound post Brexit should also improve our income figures in the first half of next year.”
Shares rose 1% to 123.8p, and have more than doubled since the end of February.
Source: *
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