Coal fuels New Hope share surge
INVESTORS have poured into New Hope Group, adding another $1 billion to its value and shrugging off concerns over its legal issues and the perceptions of coal.
The company's market capitalisation has jumped to almost $2.7 billion as thermal and coking coal prices soared on the back of demand from China and India.
The surge in the share price to $3.21 on Thursday from lows of $2 in March have also pushed the value of shares held by managing director Shane Stephan to more than $1 million.
Since its low point on March 14, New Hope has been one of the best performers on the All Ordinaries Index as its stock rallied 60.5 per cent, behind Silver Lake Resources up 80 per cent to 64c and Atlas Iron up 72 per cent to 4.3c.
There are headwinds emerging for the company and coal in general.
New Hope's0 recent court victory over the New Acland expansion has been appealed, which could push development back 10 months.
China has announced major cutbacks in coal as it attempts to deal with pollution, and the collapse of price negotiations between Glencore and the Japanese energy utilities means there is no benchmark price for other buyers.
A state council directive, released this week, said China would cut coal consumption, boost electric vehicle sales and shut more old steel and coke capacity in the next three years.
It will impact Beijing, Tianjin and the Hebei, Shandong and Henan regions.
However, coal exports from Queensland for the year to the end of May increased by $5 billion, or 18 per cent, to $32.8 billion, according to Treasury figures.
Queensland Resources Council chief executive Ian Macfarlane said that for every $10 Queensland earns through exports, the resources sector contributes $8.
He said increased coal, LNG and mineral sales helped Queensland post a record export result of $73.7 billion for the 12 months until the end of May.