Australia, Asia and Coal

Editor’s note: For an updated look into one of Elliott Gue’s top energy plays check out his free special report on Investing in Uranium and the one uranium stock to buy now.

Asia’s booming demand for energy is a major driving force behind all sorts of commodities, including oil, natural gas and coal.

Last year, TES recommendation Peabody Energy made a major acquisition of an Australian coal mining firm, Excel Coal. That deal, worth just under $1.9 billion, gave America’s largest coal mining company access to Australia’s coal mining industry for the first time.

Since then, Peabody’s management has highlighted the strong growth in Australia’s coal export market and the outstanding potential for its operations there. Peabody’s management team isn’t stupid. When they make a move, it pays to sit up and pay attention.

I’ve studied the Australian market in recent years because the country’s geographic proximity to Asia makes it an obvious beneficiary of rising Asian energy demand. The only problem is that Australian stocks have been tough for most US and Canada-based investors to access. That’s limited my ability to cover this market beyond a few of the larger Australian companies traded on US exchanges.

But that’s changing. Interactive Brokers recently gave account holders direct access to Australian stocks for a tiny commission. Other brokers are considering following that move. And I’ve noticed that some of the US shares of Australian firms traded on the over-the-counter market have begun to pick up volume lately.

It’s high time to finally expand coverage of this market and take a closer look at a number of companies I’ve been itching to profile and recommend for years.

Below I take a look at Asian markets for internationally traded coal and examine and add coverage for a number of companies with exposure to this booming market.

In This Issue

China’s rapidly rising demand for coal-fired power capacity can be met with domestic production, but that demand will have a serious impact on global coal markets.

Other emerging markets have similar need for coal-fired capacity. India will need to add 100 gigawatts of capacity by 2030 to meet domestic power needs, but domestic production isn’t keeping pace with consumption. And Japan and South Korea must also import large amounts of coal.

Where is all that coal going to come from? Australia and Indonesia will dominate the Asian coal export trade in the years ahead.

Indonesia is a tough market for North American investors to access, but many Australia-based issues are readily tradable as American Depositary Receipts or on the US over-the-counter market.

In this issue I’m recommending or reiterating advice on the following stocks:
  • BHP Billiton (Australia: BHP, NYSE; BHP)
  • Rio Tinto (London: RTP, NYSE: RTP)
  • MacArthur Coal (Australia: MCC, OTC: MACDF)
  • Xstrata (London: XTA, OTC: XSRAF)
  • Gloucester Coal (Australia: GCL, OTC: GCRLF)
  • MacMahon Holdings (Australia: MAH, OTC: MCHHF)
  • Babcock & Brown Infrastructure Group (Australia: BBI, OTC: BCKBF)

China’s Coal

China is both the world’s largest coal producer and its preeminent consumer. In 2006, Chinese coal production totaled more than 1,200 million metric tons of oil equivalent and output has been growing rapidly in recent years. China’s coal production is nearly double what it was at the beginning of this decade.

Source: BP Statistical Review of World Energy 2007
The chart above shows Chinese coal consumption and production going back to the early 1980s. Consumption of coal has clearly risen rapidly since the late ’90s. In fact, China now consumes more coal than the US, Canada, Europe and Eurasia combined.

But domestic production has more or less kept pace with that demand–the two lines on the chart closely track one another. China isn’t particularly dependant on coal imports to meet internal demand at this time.

It should come as little surprise that Chinese demand for coal will continue to surge in coming years. The country consumes vast quantities of both thermal coal and metallurgical (met) coal. Thermal coal is coal that’s used primarily in electricity generation; it’s burned in power plants.

Higher quality, more expensive met coal is used to make coke. Coke is a dense, nearly pure form of carbon that burns at an extraordinarily high temperature. It’s made by burning met coal at a high temperature in a sealed environment. Coke is in turn used in steel production and some other industrial applications.

The main difference between thermal coal and met coal is that met coal has higher energy content–there’s more energy contained in given quantity of coal. Although no two coals are exactly alike, met coals also typically produce far less ash when burned than thermal coal.

China’s thermal coal market is exploding due to the country’s rapidly rising demand for electric power. According to the Energy Information Administration (EIA), China currently generates 271 gigawatts (GW) of coal-fired power capacity. To meet growing needs, China will need to add nearly another 500 GW by 2030, tripling coal-fired capacity.

Check out the chart below for a closer look.

Source: EIA
This massive increase in coal-fired capacity means rapid growth in coal demand. In 2004 China consumed about 22.7 quadrillion British thermal units (quads) worth of coal in its electric power plants. By 2030 that figure will be closer to 56 quads.

China is the world’s largest steel producer. In 2006, it produced 423 million metric tons of steel; by 2008 production is forecast to approach 540 million metric tons. That increase in steel production spells rising demand for coke and met coal.

Note that China’s consumption of coal in its industrial sector is projected to jump from 15.6 quads in 2004 to more than 36 quads in 2030, a more than two-fold increase. Although not all the coal China uses for industrial purposes will be met coal, it’s certainly one key component.

Despite China’s strong growth in demand for thermal and met coal, the vast majority of its internal needs are likely to continue to be met by domestic production. Thanks to its huge reserves, coal is the one commodity of which China has room to increase production.

This is also exactly why China will continue to aggressively expand its coal-fired power capcity in coming years. It has no other readily available, cost-effective fuel at its disposal. Only nuclear could be a viable alternative, but it takes a long time to site and build new plants; coal will fill the gaps. Although China will take some steps to curb pollution, it’s naïve to believe the nation will stop building coal-fired plants and literally risk running out of electricity.

But just because it relies on domestic production for most of its coal needs doesn’t mean the nation’s rapid growth in coal demand won’t have an impact on global coal markets. Consider the following chart.

Source: ABARE, Australian Commodities, June Quarter 2007
Just a few years ago China was exporting more than 80 million metric tons of thermal coal. As recently as 2002 Japan was importing more than 20 percent of its thermal coal requirements directly from China, and South Korea was another big importer.

But that’s all changing. Chinese coal exports will total around 40 million metric tons next year, but it will also import about 40 million tons. China won’t be a net exporter of coal in 2008.

In other words, as China’s domestic demand for coal grows, there’s less available for export to other coal-hungry Asian countries. Major importing countries will need to look elsewhere for their supplies. The loss of Chinese export supply has also put further upward pressure on Asian coal prices.

Also impacting Chinese coal exports are a series of changes to the Chinese tax code. For many years, China had offered coal exporters a tax credit to encourage export growth. Now, the government has actually imposed a 5 percent export tax on met coal trade and is considering a similar tax for thermal coal. And In April authorities imposed new taxes on producers in Shanxi Province, one of China’s key coal production regions. These measures, though relatively mild, will tend to depress production and exports.

Meanwhile, Chinese exports of met coal have been falling while imports have been rising. In 2005, for example, China exported about 5.3 million metric tons of met coal and imported 7.2 million metric tons.

The final factor hampering Chinese coal production is infrastructure. Just as in the US, coal must be moved by rail and boat from mines in remote parts of the country to power plants. A series of transportation bottlenecks over the past few years has affected coal producers’ ability to successfully transport coal to market.
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Beyond China


This coal growth story is not only true for China. India is the world’s third-largest producer of coal behind China and the US, producing some 398 million metric tons of coal annually. And like China, India has seen and will continue to see strong growth in demand for coal in coming years.

Source: EIA International Energy Outlook 2007
The EIA projects that India will need to add more than 100 GW of new coal-fired power capcity by 2030 to keep pace with growing electricity demand. India’s total coal-fired capacity is projected to grow from less than 90 GW today to 186 GW by 2030. That growth spells rising demand for coal. India’s total demand would rise nearly 90 percent from 2004 through 2030 under such a scenario.

As noted above, India is a big coal producer and can meet many of its needs through domestically produced coal. But its reserves are high in ash content; India’s coal has as much as 40 percent ash content compared to 9 percent to 12 percent for most internationally traded thermal coal. Because ash reduces the efficiency of power plants, India also imports coal as a blending agent. Power producers can actually blend low-ash coals with domestic production to reduce overall ash content.

And infrastructure is notoriously poor; bottlenecks in coal transport plaguing the US and China are even worse in India. This, too, hampers its ability to meet demand through domestic production.

As you might expect, India has seen rapid growth in coal imports in recent years. It imported 23.4 million metric tons in 2006 and is forecast to import closer to 30 million metric tons next year. That represents an annualized growth rate of more than 11 percent.

A quick glance at the chart below illustrates that, unlike China, Indian coal production isn’t keeping up with consumption right now. That spells more imports to come.

Source: BP Statistical Review of World Energy 2005
The gap between Indian production and consumption has become more pronounced during the past five years. This widening gap represents greater reliance on imports. The EIA estimates that by 2030 India’s dependence on coal imports will be double what it is today.

Although it’s not as exciting as focusing on emerging markets like India or China, we can’t discuss Asian coal demand without talking about Japan and Korea. Neither Japan nor Korea has any real domestic reserves or production, so both countries are almost totally dependent on imports. Japan, the world’s largest importer, will source around 115 million metric tons from other countries in 2007.

Japan is a developed economy; demand for electricity is growing at a far slower pace than in China and India. Its need to build out coal-fired power capacity is limited. But Japan needs to import a great deal of coal every year, and it’s getting harder to find it. Japan has traditionally relied on China for a fifth of its thermal coal imports and as much as 14 percent of its met coal imports. But with China no longer exporting significant quantities, Japan has had to turn elsewhere.

South Korea’s story is similar. It has plans to build a total of more than 7.3 GW of new coal-fired capacity in the next few years, and it already imports 63 million metric tons of coal per year. As new plants come on line, Korea’s import demand, already growing at a 7 percent annualized pace in recent years, will pick up.

And don’t forget the met coal side of the equation. Japan and South Korea are huge steel manufacturing countries. Japan produces some 119 million metric tons of steel a year and South Korea produces around 50 million metric tons. Together they account for about 12 percent of total global steel production and need to import met coal to manufacture it.

Bottom line: Demand for coal in Asia is growing rapidly, and China is moving from being an important net exporter to a net importer. This tight supply/demand picture is why international seaborne coal prices have remained firm even as certain regional markets, the US included, have seen coal prices fall. (For more on the US coal market, check out the August 1, 2007, issue of TES, Earnings in Review.)
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The Supply Side

In light of the tight supply demand balance in Asia, the obvious question is where all those coal imports will come from. Two countries in Asia will dominate the export trade for the foreseeable future: Australia and Indonesia.

Australia and Indonesia both benefit from large reserves and production capabilities well above what’s needed to satisfy domestic demand. And both are located relatively close to their key export markets.

Australia is the world’s largest exporter of coal. According to the Australian Bureau of Agricultural and Resource Economics (ABARE), the nation will export a little more than 115 million metric tons of thermal coal in 2007 and 136 million metric tons of met coal.

Indonesia is actually overtaking Australia as the world’s most important exporter of thermal coal; exports should top 175 metric tons in 2007. This represents tremendous growth over the past few years; check out the chart below.

Source: ABARE, Australian Commodities, June Quarter 2007
The reason Indonesian thermal coal imports have ramped up so quickly has to do with the ease of producing and transporting these reserves. In all coal-producing countries, one of the main obstacles to growing production is transportation.

Typically, coal must be loaded onto railcars, transported over long distances and stored temporarily in terminals. In the US, poor rail infrastructure in the Powder River Basin (PRB) has hampered production growth from that region. And in both China and India rail transport for coal remains a big bottleneck. Not so in Indonesia; check out the map below.

Source: The University of Texas Perry-Castañeda Library Map Collection
Indonesia is made up of a series of islands, and there are significant inland waterways and rivers running through the country. Much of Indonesia’s coal can simply be loaded directly from a mine onto a barge and transported to a nearby harbor to be loaded onto a waiting ship. This eliminates much of the trouble associated with building out rail and port infrastructure and has allowed Indonesia to rapidly ramp up production without spending much time and money on infrastructure.

Although Indonesia has rapidly expanded its thermal coal production, Australia remains the dominant player in met coal. And don’t discount Australia’s importance to the thermal coal market. It’s still the second-largest thermal coal exporter in the world.

Source: ABARE, Australian Commodities, June Quarter 2007
Australia commands close to two-thirds of the total global met coal export market. Its closest rivals are Canada and the US, which export less than a fifth the met coal Australia does. And Australia has an even larger share of the Asian coking coal market–Australia supplies three-quarters of Asia’s met coal imports.

Demand for Australian coal, both met and thermal, has been red-hot lately, so strong that it totally overwhelmed the nation’s existing port infrastructure earlier this year. At one point this summer ships had to wait a minimum of 20 days to pick up a load of coal from Australia’s biggest coal export port, the Port of Newcastle. It was estimated that as much as 10 percent of the total global fleet of dry-bulk ships was berthed or waiting for a berth in Australia.

To make matters worse, heavy rain in Indonesia shut down or interrupted exports from that country for days last month. The result: Demand for Australian coal surged, putting further pressure on the nation’s port infrastructure.

Dry-bulk ship operators charge a daily fee known as a day-rate for transporting coal. Just as with the oil tanker firms, dry bulk shippers can charge either a competitive spot rate for their freight services or contract their fleets under longer-term time charters at fixed rates. Spot freight rates are competitively set and vary wildly depending on the immediate supply/demand situation with dry bulk carriers.

Rates have soared this year due in large part to the strong demand for ships to carry coal out of Australian ports. Check out the chart below.

Source: Bloomberg
The Baltic Dry Index represents freight rates for a variety of dry-bulk ships on different routes. The index includes dry-bulk ships of multiple sizes; it’s a good overall proxy for the health of freight rates and demand for dry-bulk carriers. It’s clear that rates for dry bulk ships have been rising steadily since the beginning of 2007, a symptom of this surging demand.

About 97 percent of Australian coal production for export comes from New South Wales and Queensland.

Just a handful of ports located along the east coast of Australia handle the vast majority of the nation’s coal exports. It’s these ports that have been so congested this year, and that congestion has negatively impacted Australia’s capacity to export. Compounding that problem was a major storm that actually shut down operations at Newcastle for days earlier in the year.

But steps are being taken to alleviate these issues. Freak weather events can never be fully predicted or eliminated, but Australia is upgrading its infrastructure to allow ports to handle more coal throughput. While Newcastle will remain the largest coal export port, significant expansions are planned at other ports, reducing the impact of any weather event or glitch that affects a single port.

There are major expansions to important ports in this area–including the massive facilities at Newcastle, Gladstone and Dalrymple Bay–planned for the next few years. These expansions will add more than 55 million metric tons of export capacity, enough to alleviate the worst of the bottlenecks.

Australia is positioned as the premier play on surging growth in the coal trade throughout Asia. As ports and infrastructure are upgraded, Australia will be able to meet Asia’s rapidly growing demand for met and thermal coal.

We can’t afford to ignore this market’s potential.
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How to Play Australian Coal

Of the two major coal exporters, Australia and Indonesia, I’m going to focus on Australia in today’s issue. There’s a handful of interesting coal plays in Indonesia, but it’s tough for foreign-based investors to gain access to the Jakarta exchange at this time. The good news is that a number of larger foreign companies do have exposure to mining in Indonesia; this will remain a market to keep a close eye on.

Although it’s difficult for most investors to buy Indonesian stocks, that’s just not the case in Australia. Many stocks are available, with reasonable liquidity, either as American Depositary Receipts (ADRs) or on the US OTC market. Some brokers, notably Interactive Brokers, now offers trading in Australian stocks on the Australian exchanges for a cost of AUD6 (USD5) per trade. With E*Trade rapidly expanding its international offerings, I wouldn’t be surprised to see Australia added to that list at some point.

Apart from the access issue, Australia also holds out significant benefits for investors. It’s a politically stable country with a solid legal system and a large, liquid stock market. Like the US, Canada and parts of Europe, Australia has an equity culture; Aussies are every bit as interested in the stock market and investing as their American counterparts. In short: Australia is a great and politically safe place to invest some cash.

Some of our best performing recommendations in the TES model portfolios over the past few years trade on foreign exchanges. It’s well worth any extra effort to venture abroad. In today’s issue, I’ll take a quick look at a number of Australian coal plays, including Macarthur Coal, a stock I’m adding to the Wildcatters Portfolio.

And keep in mind that Australia isn’t just about coal. The country is a huge producer and exporter of energy commodities as diverse as uranium, liquefied natural gas (LNG) and oil. I’ll turn my attention to these other major markets in an upcoming issue.

BHP Billiton (Australia: BHP, NYSE; BHP)–BHP is the world’s largest producer of exported thermal and coking coal, generating around 37 million tons of met coal and 88 million tons of thermal coal annually. BHP certainly has vast operations in Australia, but it’s a truly global firm. That includes interests in a series of Indonesian mines in the coal-producing region of east Kalimantan. BHP also operates Australia’s Hay Point export coal terminal in Queensland as part of a joint venture.

BHP is definitely the 800-pound gorilla of the industry, but coal accounted for only about 9 percent of sales last year. The company has far more exposure to petroleum products (18.6 percent of revenues), aluminum (15.7 percent) and base metals such as nickel, iron and copper (15.6 percent) than it does to coal. In fact, BHP is the world’s second-largest nickel producer and third-largest miner of both iron ore and copper–all commodities in high demand in rapidly growing Asian markets.

In short, BHP is one of the finest diversified commodity mining firms in the world and should be part of any investor’s portfolio. It’s far from a pure play on coal.

I’ll track BHP Billiton as a buy recommendation in How They Rate given its significant exposure to energy-related assets.

Rio Tinto (London: RTP, NYSE: RTP) and Coal & Allied Industries (Australia: CAN, OTC: CAIQF)–Rio Tinto is, like BHP, a high-quality, globally diversified mining company. Headquartered in London, Rio Tinto operates mines in the Americas, Africa and, of course, Australia.

Rio gets about 18 percent of its annual revenues from coal; the company’s two largest products are iron ore (30.1 percent of 2006 revenues) and copper (20 percent of 2006 revenues). I discussed the firm’s uranium-related assets at some depth in the July 18, 2007 issue, Yellow Fever.

Interestingly, Rio Tinto has a habit of allowing its majority owned subsidiary firms to continue trading separately. Coal & Allied Industries is 70 percent owned by Rio Tinto and 10 percent owned by a unit of Japan’s Mitsubishi. The stock’s freely traded float is tiny, which explains why only a few thousand shares change hands on a daily basis. Coal & Allied is a pure play on Australia coal, however. The company owns two mines in New South Wales and commits essentially all of its production to the export coal market.

Rio Tinto doesn’t have enough energy-related exposure to be tracked in How They Rate and Coal & Allied just doesn’t trade enough to be considered a portfolio addition.

XStrata (London: XTA; OTC: XSRAF)–XStrata is the last of the diversified miners with major exposure to Australian coal mining. The company gets about 20 percent of revenues from coal mining and has been trying to add to that exposure, most recently through an attempted takeover of Australia-based Gloucester Coal. That deal fell apart at the end of July after shareholders voted to reject it.

Xstrata’s most important commodities are copper, at about 40 percent of revenues, followed by zinc, at about 21 percent.

Xstrata is a fine buy for those looking for diversified commodity exposure, but it just doesn’t have enough energy-related exposure to be considered for inclusion in the TES portfolios.

Macarthur Coal (Australia: MCC, OTC: MACDF)–Macarthur Coal owns a series of coal mines in the Bowen Basin of Queensland, Australia. Macarthur does produce some thermal coal, but its primary product is pulverized coal injection (PCI) coal. Basically, PCI coal is crushed and injected directly into steel blast furnaces; it can be used as a partial replacement for met coal. Interestingly, MacArthur coal produces nearly half the entire Australian export supply of PCI coal.

Macarthur’s fiscal year ends in June, so the company just recently released its 2007 annual report. Total coal sales were 3.79 million metric tons, ahead of its forecast but below the 2005 and 2006 production levels in the 5 million metric ton range.

There are a number of reasons for Macarthur’s coal production to have declined. The company was impacted by the infrastructure problems that have plagued Australia’s ports in recent months. In addition, MacArthur experienced some terrible weather early in calendar year 2007 that disrupted some of its most important mines, including the massive Coppabella and Moorvale mines. That same weather has delayed the exploration and development of new mining projects.

The company has plans to expand capacity to more than 8 million tons per year by 2011 through a series of expansions to capacity at existing mines coupled with production from new mines located on Macarthur’s property holdings. The company has also been arranging port allocations–capacity at Australia’s export ports–to make sure it has enough capacity to export all the coal it produces.

I’m not the only one interested in Macarthur Coal. Citic Resource Holdings, a Hong Kong firm that operates commodity import and export businesses, actual coal mines, oil developments and aluminum smelting facilities, currently owns a just under 20 percent of Macarthur. Citic nearly doubled its stake over the course of the summer.

This is all part of Citic’s strategy of buying up reserves and production of natural resources that will be sorely needed in China in coming years. Citic is already a joint venture partner on many of Macarthur’s mines; the Hong Kong firm owns roughly 7 percent interests in both Coppabella and Moorvale.

Macarthur owns some of the most attractive coal reserves in Australia and has room to increase production to take advantage of rising demand and prices in coming years. On top of all that, like many Australian companies Macarthur pays a significant dividend of 4 percent after all stamp duties are paid on those dividends.

I’m adding Macarthur Coal to the Wildcatters Portfolio as a buy recommendation.

Macmahon Holdings (Australia: MAH, OTC: MCHHF)–Macmahon operates in essentially two businesses, mine management and civil construction. The companies mine management business involves providing a variety of services related to mining, including blasting, waste disposal, transport, equipment repair and refurbishing and even integrated management of entire mining projects.

It’s important to note that Macmahon’s serves not just the coal industry but a variety of commodity markets as well. The company’s largest customers are obvious: the big diversified miners such as BHP and Rio Tinto. Roughly 13 percent of its business is directly attributable to coal.

Mining-related activities account for about 60 percent of revenues. But even the civil construction unit isn’t irrelevant to the mining industry. This unit performs upgrades and repairs to ports, railroads and roadways. Port and rail infrastructure, in particular, are crucial components of the Australian coal supply chain.

Macmahon is also getting some takeover interest. Australia’s biggest construction firm, Leighton, offered to take a 30 percent stake in the company earlier this year but was rebuffed. Leighton currently holds about a 15 percent position.

Although not a pure play on coal, it fits well as a play on Australia’s growing mine industry and the need to upgrade infrastructure. I’ll track Macmahon Holdings in How They Rate as a buy recommendation.

Gloucester Coal (Australia: GCL, OTC: GCRLF)–Gloucester Coal was the target of an unsuccessful takeover bid by XStrata. Shareholders rejected the deal mainly because Gloucester’s business has been benefiting so much from the bull market in Australian coal prices this year; many felt the offer was just too low. That accounts for the stock’s erratic trading activity since the beginning of 2007. It’s still trading at a discount to where the stock was before the Xtsrata deal was formally rejected in July.

Gloucester has two major mining operations in Australia, the Stratford and Duralie projects, both located in New South Wales not far north of Newcastle Port. The company mines both high quality coking coal and thermal coal; it mined 706,000 tons of coking coal and 1.45 million tons of thermal coal in its most recent fiscal year that ended in June. That represented about a 13 percent jump in sales over last year’s totals–demand for both coking and thermal coal remained strong.

But Gloucester certainly wasn’t immune to port issues; actual profits dropped more than 50 percent year-over-year. The reason is simply that when dry bulk ships have to wait for more than a pre-set period in the port, shippers pay what’s known as a demurrage fee, basically a fee to hold the ships in line. Extreme port congestion also set demurrage fees much higher this year, impacting results.

Results were also impacted by the fact that coking coal prices spiked higher last year. Although still strong by any historical comparison, they’re still below levels in the year-ago comparison.

Gloucester Coal is another stock I’m watching carefully as a potential addition to the portfolios. For now, I’ll track Gloucester Coal in How They Rate as a buy.

Babcock & Brown Infrastructure Group (Australia: BBI, OTC: BCKBF)–Babcock & Brown Infrastructure Group owns a large number of infrastructure assets. The stock is a so-called stapled security; this is a structure that allows shareholders to own a portfolio of infrastructure assets managed by a premier Australian investment bank, Babcock & Brown.

The infrastructure fund owns a variety of energy-related assets located mainly in Australia, the United Kingdom and New Zealand. Probably the asset of most interest from an Australian coal standpoint is the Dalrymple Bay Coal Terminal in Queensland, one of Australia’s (and the world’s) largest coal export terminals. This terminal exports thermal and met coal from Australia’s Bowen Basin and is in the process of being upgraded to handle 85 million metric tons of coal annually, up from the current 59 million.

Customer access to the port and tariffs charged are regulated by the Queensland government; however, Babcock controls the port under the terms of a long-term lease. Revenues are backed up by long-term contracts that guarantee a certain minimum payment for reserving capacity.

Babcock & Brown Infrastructure pays a huge, 8.5 percent dividend. Again, it’s not a pure play on coal, but it looks like an attractive, high-income investment with leverage to growth in the Australian coal export market.

This is by no means an exhaustive list of Australian firms leveraged to coal. I’ll be expanding my coverage of Australian coal stocks and, of course, Australian companies leveraged to other energy-related industry groups in upcoming issues.

Australia is far and away one of the finest plays on growing demand for energy-related commodities across the Asia-Pacific..
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