Stanmore wants more: Coal miner weighs up renewables or BHP assets

Two years ago, the coal sector was in such poor shape that the company now known as Stanmore Resources was looking at diversifying into renewables. Now it is tipped to snap up more of BHP’s unwanted mines and become a globally significant coal producer.

Mar 16, 2023, updated Mar 16, 2023
Stanmore's Isaac Plains mine

Stanmore's Isaac Plains mine

Stanmore already controls about 4 billion tonnes of coal resources and Morgans Stockbroking has tipped the company as the most likely candidate to snap up the Daunia mine in central Queensland that BHP’s joint venture BMA has put on the market.

Both Daunia and Blackwater are on the market.

It would be the culmination of a remarkable rise for the company, which is now 75 per cent controlled by Singapore’s Golden Investments. Stanmore started life with Isaac Plains mine which it famously bought for a $1.

Morgans analyst Tom Sartor said coal producers were building a bank of cash for mergers and acquisitions.

“All the ASX listed producers will take a close look at the BMA assets and … we think Stanmore Resources has the best chance of being rewarded should it buy Daunia only,” Sartor said.

He said the sale of the mines was probably behind the disappointing dividends from coal companies recently as they stored cash rather than looked for expensive debt.

“Windfall sector dividends have been delayed, not consumed, for most producers in our view,” he said.

“The most disciplined boards should duly reward shareholders with the spill-over of excess capital and/or disciplined growth. Stanmore and Whitehaven look excessively cheap for their growth and returns potential respectively.

“We think New Hope will be the most disciplined with a greater chance of releasing windfall dividends in time.”

He said companies that executed their strategies well and maintained “price discipline could well drive large disparities in stock returns. Companies like Stanmore that acquired well or companies that chose to distribute surplus cash could outperform in time.

Stanmore’s share price has risen 140 per cent in the past 12 months and New Hope is up 87 per cent over the same period.




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