Record coal prices will translate into extraordinary cash generation for the ASX’s coal producers, who have nothing to invest in and must redistribute those profits to shareholders, according to investment manager Clime.
Investment house Washington H. Soul Pattinson is Mr Abernethy’s top pick in the sector, saying its unique structure means “there will be a massive amount of money paid through the group and that will seep out to shareholders”.Asked about institutional investor resistance to fossil fuels, Mr Abernethy said he can see where the world is going but argues focus also need to be placed on how resource exporting nations like Australia get there.
Mr Abernethy’s comments follow a spike in the price of traded coal futures, and lifting of ASX coal miners to in some instances record levels, as nations scramble to secure sources of energy from anywhere but Russia.