OK, coal might be dirty and black and not have the glamour of diamonds, but what are diamonds anyway – coal put under immense pressure. 

Over the past 12 months both Rio Tinto and Anglo American have made announcements about their coal divestments.

Rio, it would seem, has a few more divestment runs on the board than Anglo, but both diversified mining giants have decided there is no space for coal in their exalted portfolios. Rio relegated coal to its minerals division, an odds and sods sort of basket.

Well boring old coal has helped save the minerals division.

According to Rio’s results announcement for 2016, coal offset weaker pricing for titanium dioxide feedstocks, zircon, borates and uranium.

One of the star performers in Rio’s coal assets is the Kestrel longwall mine in Queensland, which may have gone over budget when it was expanded under the stewardship of former CEO Tom Albanese but is now delivering for the company in spades.

The Kestrel and Hail Creek mines are all that remain of Rio’s coal assets after it announced it would be selling its prize Hunter Valley coal operations, which includes Mt Thorley Warkworth complex and the Hunter Valley No 1 mine, to Yancoal in a $US2.5 billion deal.

However, Kestrel, which has been running its coal handling and preparation plant at full capacity for weeks and stockpiling coal because of the efficiency of its longwall, is being actively shopped around by Rio as it seeks to raise money to fund its next share buyback.

Then you have Anglo American CEO Mark Cutifani talking about the success the company has had in improving productivity in 2016 and the next 40% improvement in productivity to come.

Cutifani, a native of the Illawarra and an alumnus of the University of Wollongong, knows a thing or two about how to get coal mines cranking up to maximum productivity.

Despite that, he made the corporate decision to flog the coal assets, including the Grosvenor and Moranbah North longwall mines in Queensland.

While the Grosvenor mine is believed to be struggling of late, its Bowen Basin neighbour, Moranbah North, has broken production and safety records and has reignited interest in the company’s coal portfolio as a viable contributor to Anglo’s bottom line. 

Not only are these coal mines proving their mettle in difficult market conditions, they are providing leadership to the entire mining industry on how to perform in a disciplined and cost effective manner.

Hogsback thinks quality coal assets that are well managed and not over-capitalised can provide good returns to companies regardless of the stage of the economic or commodity cycle.

Coal might not be attracting the flattering headlines in the media lately, but it has true grit and staying power, and in this climate that might be worth a lot.