Macarthur: positive signs in steel markets

MACARTHUR Coal can see more signs of demand recovery, saying it has had more enquiries for shipments.
Macarthur: positive signs in steel markets Macarthur: positive signs in steel markets Macarthur: positive signs in steel markets Macarthur: positive signs in steel markets Macarthur: positive signs in steel markets

Greg Rowan, senior inspector of mines, Queensland Government Natural
Resources & Mines

Blair Price

In a presentation for its share purchase plan, which closes on July 16, Macarthur said it was seeing increasing enquiries for shipments of low-volatile pulverised coal injection coal product from European and Brazilian customers.

Macarthur said signs were modestly positive in steel markets for the first time in many months.

“Chinese steel production has regained the levels previously achieved before the full impact of the global financial crisis,” the leading PCI coal producer said.

Following a safety crackdown on its small mines sector this year, China has imported record amounts of metallurgical coal, with Macarthur saying the country soaked up the surplus capacity of the Australian coal industry in the first half of the year.

“The key question is whether or not China will continue to import significant quantities of metallurgical coal in the future.”

The company recently raised $A190 million from institutional investors and in the current share purchase plan, eligible shareholders can each subscribe for up to $15,000 of new shares.

Funds from the equity raising campaign will go to developing Macarthur’s 70%-owned Middlemount open cut mine in Queensland’s Bowen Basin, which has coal reserves totalling 56.9 million tonnes, comprising 28.5Mt of proved and 28.4Mt of probable reserves.

Macarthur will also use the proceeds to continue the predevelopment and evaluation of its 85%-owned Codrilla and Wilunga projects to the north and other ongoing exploration.

The producer has recently forecast net profit after tax to be in the range of $155-170 million for the current financial year, well above the $72.7 million realised in the previous 12 months.

Macarthur shares closed up 32c to $6.52 yesterday.

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