Bowen Coking Coal Ltd (ASX: BCB) has acquired an impressive portfolio of coal assets in Queensland, Australia, and is now in production on route to reach over 4mtpa of saleable product. While the focus is on steel making coal long term, the current market is presenting the opportunity to capitalise on extraordinary thermal prices.
The IEA Pathway to a low carbon future forecasts that the world will be making more steel using coking coal in 2050 than it is today and that this is unavoidable. The transition to a low carbon future has to be managed thoughtfully and carefully to avoid shortages of old energy sources until the world has actually transitioned to new sources. There is no evidence that any country is exercising that care, so the next decade is likely to see critical shortages of steel and energy driven by under investment in coal, meaning above expectation prices and super normal profits for companies like Bowen.
