Matt Warder & Koala Unpack Peabody’s $3B+ Coal Deal

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Righto muddy miners mate.
We've talk about anyone that's

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interested in coal.
Holy shit you are in the right

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place today, Eddie.
I've got the coal with me.

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Oh special for for the episode.
This is from Hags who kindly

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left it here, so I've just bring
it out for the occasion.

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A momentous occasion, mate.
Right it is.

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You've got to go treat yourself
to a colonoscopy if you're into

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it that much.
So right, we've got a couple of

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sensational guests coming on.
There's no better person to

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discuss anything, Carl than the
global coal guru himself, who

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we've got on the show.
And sorry, Koala, it's not you.

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No offence.
Maddie Water.

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Welcome back mate.
Buddy, hey, thanks for having

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me.
This is a momentous occasion for

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the coal industry.
It's got got me super excited.

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And and we're we're having this
on the day before Thanksgiving

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in the US, which is popularly
known as Blackout Wednesday.

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So you're going to get really
quality entertainment from our

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from our marsupial friend and I,
I think you're probably ensuing

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45 minutes.
We're going to be fun.

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I love it, I love it, right?
And Koala will be joining as

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well.
Well before, while we're waiting

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on him, before we go deep on the
Anglo Peabody coal deal.

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Bit of news out yesterday from
the WA government, a bit of

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lithium relief.
It's not relief, lithium

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waivers, you'd say a bit
different to royalty relief.

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We'll get into it.
So what do?

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You make of it, Maddie.
Well, they're doing something.

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It's not a bloody game changer,
first up, but it is a bit

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different to the precedent the
the previous royalty relief

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we've seen.
So Mr Roger Cook unveiled this

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$150 million package yesterday
to a valuable available to all

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lithium miners upstream,
downstream across the state.

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So they're there's a couple of
aspects to it.

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There's about 90 million bucks
that's getting allocated to the

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downstream and that's pretty
much they're waving for two

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years government fees for like
development WA Synergy and Water

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corporations.
So water, power and land fees.

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So they're waving that for two
years.

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So it's not relief where they
have to pay it back.

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It's actually getting waived for
two years.

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So that'll be these will and now
these are these aren't just for

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the Australian listed companies.
It's at the project level.

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So it's like that's for Kemerton
and for Kwinana.

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So it's like Albemarle and TNT
effectively get benefit from it

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too, as well as IGI.
Then you've also got lithium

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miners in the ramp up phase of
their project that you have the

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port charges in the mining
tenement phase waved for up to

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24 months value of 9.37 million,
very specific.

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So that would apply to Kathleen
Valley, but also Mount Holland

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as well as I want your class in
ramp up.

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Then there's also combined $50
million loan facility that will

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be available to help lithium
miners access temporary interest

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free loans to help sustain on
operations.

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But they've got to demonstrate
their current financial position

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and operational plans.
They've obviously got to have a

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plan and demonstrate that
they're I assume losing money,

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don't know if it applies to
break even.

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So they'll be able to, they'll
have to repay these after.

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So there's a two year interest
free period, then quarterly

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payments keep it kicking after
that.

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Or if the lithium pros guys over
1100 bucks a tonne for spot US

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for two successive quarters
before that, I think then the

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interest, the repayments kick
in.

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So it'll definitely kick in
after two years.

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So I'll assume that's at the
project level as well.

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So I'll assume it wouldn't be
about, I'll assume green bushes

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wouldn't get it because they're
probably making money, but IG

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I'll get the benefit for the
downstream Pilgrim minerals.

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I'm not sure if they would.
What's the name?

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Qualify like because obviously
they've got a lot of cash.

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Are they break even making a
little bit probably wouldn't

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apply.
So you're thinking definitely

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lontown, all the minres acid
mount Marion and Wadgina now,

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because bull do shut so and
that's an I think that's at the

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project level as well.
So it'd be a lot for minres

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Albemarle gang fan.
I don't think it don't.

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I'm not sure how that works if
it specifically goes to Minres

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Mount Holland.
Like even if you're W farmers or

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you're massive, like you'd still
take an interest free loan and

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chucking on your balance sheet.
Why wouldn't you?

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So it'd be like 1516 million
split between those three.

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I don't know if it's like all
very definitive yet.

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Stocks didn't really do
anything, did they?

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It was a bit of a nothing burger
on the share price front because

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yeah, it's a policy that maybe
gives some sort of relief, but

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it doesn't, doesn't really
doesn't, doesn't move the dial.

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No, and and look for line towns
case like say if they get 151617

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million or whatever, it's just
something they can throw on the

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balance sheet to they don't have
to pay debt interest on that

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portion because it's interest
free.

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So it's all but it is at least
they're at least it's being

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wived.
It's not something being kicked

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down the road that they have to
pay back later.

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Obviously the government's doing
something to help just means

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that it might be a slight more
chance of people saying work and

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people keep paying taxes.
So that tax bloody offsets that

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tax.
I think it's, it's good.

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It's not like they're going to
and it's not, it's not a special

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treatment for the lithium
industry for perpetuity.

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It's like it, it is for two
years.

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I think they've recognised
there's been a 0 chopped off the

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end of the spodromain process.
So it's pretty unprecedented

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times for and it happened pretty
quickly.

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So hopefully within two years
time, it's at 1100 bucks a tonne

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in these operations that was
sparking me out here can produce

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free cash flow sustainably and
not be under the pressure

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therein.
So that's my take on it anyway.

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I hope you're right, and I hope
it.

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I hope it doesn't.
Yeah, I hope the operations can

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stand on their own feet without
relying perpetual government

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handouts to stay afloat.
Yeah.

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And it's not the end.
It's clearly not.

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You know, I think this would be
the last thing the government

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would do before and not.
It's not going to.

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Yeah, it's not not going to.
I wouldn't imagine this would be

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the difference between shutting
down and not shutting down.

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Put it that way, if they were
going to shut down, you still

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have to shut down.
This doesn't save operations,

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but it is a little bit of help
but should.

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We talk about a commodity that
actually makes money and

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actually contributes a lot to
the government coffers, coal.

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And now before we get into it,
this bloody pay body coal deal

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with Anglo like Peabody.
If you're listening, you better

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have bloody called Adam Battista
from CRE Insurance yesterday.

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He better have been on the line.
The coal insurance expert Adam

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part of CRE, he needs to be on
this.

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Don't put a transformational
deal at risk without having the

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proper bloody insurance advice.
It sounded like from the coal

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guru on the on the people I
call, it sounded like that was

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still, you know, figuring out
some things like CapEx and all

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that sort of jazz.
What as you're figuring stuff

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out, people, not that you had
long enough in the data room

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already.
As you're figuring stuff out,

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make sure you call Adam Batista.
Look at him.

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He's wearing a coal hat right
here.

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What a legend, Adam.
Should have been in the data

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room with you.
Take Adam and CRE into the data

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room with you.
Any morning company out there

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for a future deal?
Wicked well, we've, we've got

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the, the wonderful Matty water
and and and koala from the

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eucalyptus tree with us today
to, to talk about the sale

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process.
That's kind of captured

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everyone's attention over the
last God knows like it's been 5

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months that this has been in the
air time and it's of course

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Anglo Americans sale of the
Queensland coal met assets.

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This sale process sort of had
had it all like, you know,

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Maddie, JD Koala and Matt,
there's just in the lead up

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right?
Like it all kicked off when when

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in the aftermath of Anglo's gold
a loan strategy when they fended

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off PHP, the sort of quick
single they had to was to sell

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the quality Queensland coal
portfolio.

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And like back back when they
first announced it, the media

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was sort of reporting numbers
that it would be worth up to,

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you know, US $6 billion.
And then then gas ignited in the

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tailgate of the underground long
wall at Grosvenor.

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The fire burned for nearly the
whole month of July before being

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extinguished.
And plenty of people started

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raising concerns that reopening
would ever be even feasible.

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Suddenly the press started
calling it AUS $3 billion

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portfolio instead of AUS $6
billion portfolio.

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And here we are today, you know
in the last last week and a bit

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Anglos announced the outcome of
the sales process.

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The first bit of the portfolio
to go was their 33% interest in

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the in the Jalambar Group that
owned 70% interest in Jalibar

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East and like the mines that
went to Sam Chong's Zashvin for

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US 1.1 billion who had a
preemptive right.

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The other small asset to go to
by the sideways was Anglo's 51%

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interest in the Dawson complex
which has been sold to Boomer

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for US 455,000,000.
And that left the rest of

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Anglo's portfolio, 88% of
Marinburg N, 88% of Grosvenor,

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70% of Aquila and 70% of Cap
Call.

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The winner ended up being, you
know, the Saint Louis based

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Peabody who ended up getting
that US $2.3 billion cash, of

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which US 1.7 billion was
upfront.

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And you know, 625,000,000 spread
over four years.

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Plus a price linked upside
payments of up to an extra US

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550,000,000 / 5 years plus
contingent payments up to US

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$450 million linked to
governor's restarted production.

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All up, that was somewhere
between US 2.3 and US 3.3

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billion that anybody's paying
depending on those continued

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payments.
And for Anglo, they find

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themselves scoring between US
3.8 billion and US 4.9 billion

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for the entire portfolio.
Koala that water.

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What did you guys make of the
outcome?

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Well, I mean, did you, did you
include the the contingent

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payments on the restart of the
Grosvenor mine that's in there?

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Yeah, 450 there, right?
Yeah.

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So that turns Grosvenor's
restart project from you know,

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if if it were something similar
to what Peabody's done with

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Centurion, which had the North
Goon yellow fire back in 2018, I

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think they spent just a little
bit under 500 million to restart

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that.
Now they have a contingency

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payment of $450 million on top
of that.

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So Grosvenor is a billion dollar
project now for three, 4 million

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tonnes of medical, which I'm not
sure how it's necessarily going

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to work out all the time.
So at least for the analysis

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that I did it and I, I didn't
look to see if there was ever an

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expiration date on that, that
there, there probably isn't.

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I don't think I didn't see one.
But you know, mostly for my

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purposes, it was about, well,
let's just digest the rest of

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the deal and see what that, what
that sort of looks like.

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And you know, when I, when you
just plug in the numbers that P

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body gives you, you know, if I
run a 10 year DCF on that, I get

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about 2.5 billion, which is kind
of what they're paying in cash

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and deferred payments, right?
It's like the seven, six or $700

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million deferred and then, you
know, 1.7 upfront.

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So without doing any math,
without doing anything fancy, I

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get to the same number they get,
you know, I think the question

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remains sort of what the
question was for Whitehaven when

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they bought Black Water and
Dawnia.

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It's can Peabody absorb the
assets efficiently and quickly

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and then can they operate them
with success?

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If the answer to both of those
questions is yes, and I think

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you should, you know, you should
issue some growing, you know,

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allow for some growing pains,
then you know, on the, on the

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just on the merits, it's
probably a pretty good deal for

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them.
My personal opinion on the

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contingent payments that are
linked to price, I do think we

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have like, you know, two or
three years here where the

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market's going to be be pretty
reasonably balanced.

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And the, the decline of Chinese
downstream demand for steel is

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00:11:46,520 --> 00:11:48,560
kind of what's going to wind up
setting that price.

224
00:11:48,760 --> 00:11:52,800
And right now it's, it's hard to
see past the fog of, of surplus,

225
00:11:52,800 --> 00:11:56,480
but it looks like we have at
least, you know, another call it

226
00:11:56,520 --> 00:12:00,080
9 to 12 months, maybe longer
before we see the end of that.

227
00:12:00,080 --> 00:12:05,320
So, so I think year one at least
on an average basis is probably

228
00:12:05,320 --> 00:12:09,120
out of the question to hit the
targets are 240 per tonne in

229
00:12:09,120 --> 00:12:15,160
year 1235, per tonne in year 2,
240 again in year 3246 and then

230
00:12:15,160 --> 00:12:18,280
252 by the time we get out to
the end of the decade.

231
00:12:18,280 --> 00:12:20,160
I think we'll we'll probably see
those numbers again.

232
00:12:20,480 --> 00:12:24,120
But it's going to be I think
pretty touch and go here over

233
00:12:24,120 --> 00:12:25,520
the short term.
I don't know if you guys have an

234
00:12:25,520 --> 00:12:26,640
opinion on that either by the
way.

235
00:12:28,640 --> 00:12:29,880
I'll let I'll let Koala answer
that.

236
00:12:35,040 --> 00:12:41,480
At 2:25, Consensus hard cooking
coal prices 65 per short tonne

237
00:12:41,480 --> 00:12:45,640
EBITDA.
Matt and I have gone through the

238
00:12:45,640 --> 00:12:49,160
transcript and appears that
Peabody guided to about 22 per

239
00:12:49,160 --> 00:12:53,640
short tonne of CapEx.
So let's just call it $40 pre

240
00:12:53,640 --> 00:12:58,680
tax free cash flow per short
tonne, even though Australia

241
00:12:59,200 --> 00:13:02,160
loves taxing even more than the
United States, let's call it a

242
00:13:02,160 --> 00:13:07,320
25% tax rate.
That means 40 pre tax per short

243
00:13:07,320 --> 00:13:12,680
tonne free cash flow is more
like 30 after tax, 11.3 million

244
00:13:12,680 --> 00:13:17,360
short tonnes, that's 340 million
after tax free cash flow.

245
00:13:20,120 --> 00:13:25,160
So and they included this 100
million of synergies in this

246
00:13:25,160 --> 00:13:31,680
guidance, 100 million at 25%
taxes is 75 million of after tax

247
00:13:31,680 --> 00:13:35,600
free cash flow.
So without the synergies, 340

248
00:13:35,600 --> 00:13:39,800
would be 265.
Peabody paid 2.32 billion.

249
00:13:40,720 --> 00:13:47,560
So without the synergies, they
paid 11.4% free cash flow yield.

250
00:13:48,600 --> 00:13:51,960
Including the synergies, they
paid 14.65%.

251
00:13:52,880 --> 00:13:55,760
What does that mean?
That means Peabody paid the

252
00:13:55,760 --> 00:14:01,840
value of all the synergies to
Anglo American on this deal,

253
00:14:04,560 --> 00:14:08,800
which means, and what's the
delta there?

254
00:14:09,400 --> 00:14:11,760
Very roughly, it's about $500
million.

255
00:14:12,040 --> 00:14:15,920
If you just said you should just
bid 15% free cash flow yield at

256
00:14:15,920 --> 00:14:19,640
consensus with no value to the
synergies because those are

257
00:14:19,640 --> 00:14:24,880
yours to capture.
So Anglo, hats off to them.

258
00:14:26,400 --> 00:14:28,640
And you can see in the reaction
of the stock, the stock's gone

259
00:14:28,680 --> 00:14:34,040
of Peabody's gone from 28 to 24,
125 million basic, call it 1:40.

260
00:14:34,040 --> 00:14:38,960
With the convert, you've kind of
seen 500 + a little bit of AWTF

261
00:14:39,160 --> 00:14:43,120
premium and fear of execution
come off the stock kind of

262
00:14:43,120 --> 00:14:46,360
reflects the reaction.
But I think what also needs to

263
00:14:46,360 --> 00:14:49,680
be considered here is 2 billion
of debt, let's be generous and

264
00:14:49,680 --> 00:14:54,800
say 8% interest rate.
That's 160 million of interest,

265
00:14:54,800 --> 00:15:00,440
120 after tax, 340 of free cash
flow just became 220.

266
00:15:02,440 --> 00:15:07,680
Then you have the 156 million of
deferred payments every year.

267
00:15:08,840 --> 00:15:10,560
So what are you looking at?
You're looking at 60 million of

268
00:15:10,560 --> 00:15:16,400
incremental free cash flow, 225
benchmark met coal in the first

269
00:15:16,400 --> 00:15:19,760
four years of this deal or less
than $0.50 a share accretion to

270
00:15:19,760 --> 00:15:24,600
Peabody And to the upside
between the QLD royalties and

271
00:15:24,600 --> 00:15:27,760
the contingent price payments,
there's not that much upside.

272
00:15:28,560 --> 00:15:31,520
But if God forbid coke and coal
stays at 200, doesn't go to

273
00:15:31,520 --> 00:15:37,000
2:25, this looks like a break
even free cash flow accretion in

274
00:15:37,000 --> 00:15:39,400
the first four years.
Dare I say even maybe negative

275
00:15:40,040 --> 00:15:45,080
if the mines don't deliver
according to Peabody's plan.

276
00:15:46,360 --> 00:15:49,640
So what are we looking at here?
It looks like Peabody overpaid

277
00:15:49,640 --> 00:15:51,160
the markets, punished them for
it.

278
00:15:51,760 --> 00:15:53,480
It's unclear why they had to bid
what they did.

279
00:15:55,200 --> 00:15:59,400
And a big debate we're also
having is did, is this deal

280
00:15:59,400 --> 00:16:03,040
better than Whitehaven?
Well, Whitehaven, you could do

281
00:16:03,040 --> 00:16:05,920
the very simple math that they
had over a billion US of cash

282
00:16:05,920 --> 00:16:08,280
burning a hole in their pocket.
There was no way they could buy

283
00:16:08,280 --> 00:16:12,320
back a billion of stock without
the share price reflexively

284
00:16:12,320 --> 00:16:16,000
bidding higher.
And you could very clearly see

285
00:16:16,000 --> 00:16:19,000
that within three years they
were going to effectively double

286
00:16:19,000 --> 00:16:21,480
the earnings power of the
business without equity dilution

287
00:16:22,000 --> 00:16:24,920
because they clearly signalled
that they were going to explore

288
00:16:24,920 --> 00:16:29,880
a sell down of two strategics.
Peabody has not taken equity or

289
00:16:29,880 --> 00:16:33,200
convertible off the table.
The messaging has been weak.

290
00:16:34,920 --> 00:16:37,120
The slides were not nearly as
clear and concise as

291
00:16:37,120 --> 00:16:40,480
Whitehavens.
And I think one of the biggest

292
00:16:40,480 --> 00:16:43,520
interesting takeaways here is
that it seems like every passing

293
00:16:43,520 --> 00:16:47,960
metallurgical coal M and a deal
is better for the seller than

294
00:16:47,960 --> 00:16:52,120
the last deal.
Which tells you how we're past

295
00:16:52,120 --> 00:16:58,400
the peak of this ESG madness and
people are coming to realise the

296
00:16:58,400 --> 00:17:03,920
value of investing in met coal
because my Lord, I think without

297
00:17:03,920 --> 00:17:06,960
the synergies, less than 12%
free cash flow yield on the

298
00:17:06,960 --> 00:17:09,839
valuation.
I mean, I've been having some

299
00:17:09,839 --> 00:17:13,760
fun joking about Warrior and the
proposition there.

300
00:17:13,760 --> 00:17:16,640
But it makes what they've done
with Blue Creek, which is a

301
00:17:16,640 --> 00:17:19,280
billion to get 4.8 million short
tonnes.

302
00:17:19,280 --> 00:17:22,960
And if they run that long wall
like they really could, because

303
00:17:22,960 --> 00:17:26,839
it's not a skip shaft operation,
it's a conveyor and a decline.

304
00:17:27,640 --> 00:17:30,280
What if that four point is
actually six once optimised?

305
00:17:30,680 --> 00:17:33,120
I mean, it makes Blue Creek look
brilliant and genius.

306
00:17:33,240 --> 00:17:37,080
So Peabody overpaid, they've
been punished for it.

307
00:17:37,680 --> 00:17:42,000
We look out five years, provided
they execute, it'll look fine.

308
00:17:42,720 --> 00:17:46,520
But it seems like with every
passing deal, it's better and

309
00:17:46,520 --> 00:17:48,320
better to be selling a coke and
coal mine.

310
00:17:50,200 --> 00:17:52,600
Jada used the word to be like
earlier when I was talking with

311
00:17:52,600 --> 00:17:56,160
him kneecapped and I thought, I
sort of thought like it's like

312
00:17:56,200 --> 00:17:59,400
you, it sucked the wind out of
out of anybody a bit for the

313
00:17:59,400 --> 00:18:03,840
next 5 years because the upside
like you want a coal stock in a

314
00:18:03,840 --> 00:18:05,040
lot of ways.
You want to be exposed to the

315
00:18:05,040 --> 00:18:06,960
pool thesis.
But the the combination of the

316
00:18:06,960 --> 00:18:10,720
QLD royalties and the and the
priceline contingent payments

317
00:18:10,720 --> 00:18:13,800
like you talk about kind of just
ZAP out the excitement you get

318
00:18:13,800 --> 00:18:15,960
about a bullish met coal
scenario.

319
00:18:17,360 --> 00:18:20,640
Well, why don't we ask the
obvious question, which is what?

320
00:18:20,720 --> 00:18:24,120
Matt, please chime in here, But
what is AM RAMR is about

321
00:18:24,120 --> 00:18:28,200
16,000,000 short tonnes of coke
and coal.

322
00:18:28,640 --> 00:18:32,520
And because of the QLD
royalties, if you look at 2:25

323
00:18:32,520 --> 00:18:37,960
or 250, the actual EBITDA per
tonne and even with the CapEx,

324
00:18:37,960 --> 00:18:42,760
they call it the pre tax free
cash flow per tonne of the AMR

325
00:18:42,760 --> 00:18:47,680
portfolio is the same as the
Anglo portfolio.

326
00:18:48,560 --> 00:18:52,000
And so great if cooking coal
goes to 151, sixty, the

327
00:18:52,000 --> 00:18:54,320
royalties fall away for the
Anglo portfolio.

328
00:18:55,080 --> 00:18:57,200
But if you're buying these
assets, you're really playing

329
00:18:57,200 --> 00:19:01,480
for coke and coal is not 225,
it's 2:50, it's 300.

330
00:19:02,080 --> 00:19:05,600
So a really honest question here
is why didn't Peabody just go

331
00:19:05,600 --> 00:19:08,920
bid for AMR with stock and say,
well, if coke and coal goes

332
00:19:08,920 --> 00:19:12,360
down, we have a pristine balance
sheet, we'll ride it out.

333
00:19:13,480 --> 00:19:16,440
There's a lot of really
interesting points to consider

334
00:19:16,440 --> 00:19:21,200
here because at least in the US
or in Canada, if we get a spike

335
00:19:21,200 --> 00:19:24,880
to 300 or 400, you actually get
to keep the effing money.

336
00:19:25,880 --> 00:19:29,080
And you don't go into coal and
get eggs and tomatoes thrown at

337
00:19:29,080 --> 00:19:31,840
you and be told that you're
destroying the earth and that

338
00:19:31,840 --> 00:19:35,600
you're evil at Thanksgiving
dinner without getting the

339
00:19:35,600 --> 00:19:41,040
effing money.
I think you really hit on, hit

340
00:19:41,040 --> 00:19:42,480
on something there, at least for
me.

341
00:19:42,680 --> 00:19:47,920
So I, I put together a like a
file just to, just for

342
00:19:48,560 --> 00:19:51,800
comparison's sake.
Our friend re speculator had

343
00:19:51,800 --> 00:19:56,080
tweeted out sort of comparison
between, you know, SMR as it is

344
00:19:56,080 --> 00:19:58,680
with, you know, 13 million
tonnes of production and the

345
00:19:58,680 --> 00:20:00,920
Anglo assets.
And they, they had the

346
00:20:00,920 --> 00:20:04,000
relativity up there, you know,
the, the CapEx of tonnes.

347
00:20:04,000 --> 00:20:07,640
And when you link the royalties
to the price, like what you can

348
00:20:07,640 --> 00:20:11,320
see is that you know in
Australia you get punished for

349
00:20:11,320 --> 00:20:14,160
those high prices.
When you're capturing the

350
00:20:14,160 --> 00:20:17,680
entirety of the relativity,
assuming of course that, you

351
00:20:17,680 --> 00:20:19,960
know, the Australian dollar
exchange rate remains in the,

352
00:20:20,360 --> 00:20:23,600
you know, midpoint sixes and you
know, the United States doesn't

353
00:20:23,600 --> 00:20:27,440
torture USD over the next four
years, but you know, conducting

354
00:20:27,440 --> 00:20:30,560
a trade war.
So there there's risk to that

355
00:20:30,560 --> 00:20:34,480
sort of assessment, right?
But when you start taking the

356
00:20:34,480 --> 00:20:38,160
price of Coca Cola, it it
becomes clear that anybody who

357
00:20:38,160 --> 00:20:42,560
has a relative discount or
alternately doesn't have the

358
00:20:42,560 --> 00:20:46,360
same type of price related costs
that Australia has is at a

359
00:20:46,360 --> 00:20:49,280
significant advantage.
And so when you take the price

360
00:20:49,280 --> 00:20:54,800
up to like, you know, from 2:25
to 2:50 for, for, for Peabody's

361
00:20:54,800 --> 00:20:58,400
assets just on a, on a cash flow
basis, not considering

362
00:20:58,640 --> 00:21:00,240
contingent payments or anything
like that.

363
00:21:00,600 --> 00:21:04,800
You know, for every 20 to $5 in
incremental price improvement,

364
00:21:05,000 --> 00:21:08,720
you get about $100 million more
in free cash flow.

365
00:21:09,200 --> 00:21:11,560
That's with the royalty in place
and all that sort of stuff.

366
00:21:12,560 --> 00:21:16,240
But you know, once that, you
know, once that 40% royalty

367
00:21:16,240 --> 00:21:22,560
kicks in at 240 dollars or
wherever it is, I can't remember

368
00:21:22,560 --> 00:21:24,640
offhand where the, where the
Queensland government has set

369
00:21:24,640 --> 00:21:26,080
it.
And you start ratcheting up to

370
00:21:26,080 --> 00:21:30,000
like 300 million or $300.00 a
tonne or $400.00 a tonne.

371
00:21:31,000 --> 00:21:37,640
If you, if you compare AMR and
HCC side by side, HCC Warrior

372
00:21:37,640 --> 00:21:40,920
with an especially a fully
ramped up Blue Creek, I mean,

373
00:21:41,000 --> 00:21:45,560
the, it just smokes it because
the variable costs stop there.

374
00:21:45,600 --> 00:21:49,720
There's a, you know, AMR is,
it's hard for them to compete at

375
00:21:49,720 --> 00:21:53,040
really lower price because the,
the larger transportation cost

376
00:21:53,360 --> 00:21:57,200
from Central Appalachia to the
port eats, eats away a lot of

377
00:21:57,200 --> 00:21:59,080
the profit for those export
tonnes.

378
00:21:59,080 --> 00:22:03,320
Whereas Warrior located in
Alabama has a much lower

379
00:22:03,320 --> 00:22:06,400
transportation cost and it's
pretty well fixed at like 30

380
00:22:06,400 --> 00:22:09,160
bucks.
So it goes from maybe 25 to 30.

381
00:22:09,160 --> 00:22:12,920
So it just stays in this range
when prices go way up.

382
00:22:13,040 --> 00:22:16,120
The transport to the ports in
the US is capped and right

383
00:22:16,120 --> 00:22:19,440
around $60.00 a tonne.
It didn't really go up much

384
00:22:19,440 --> 00:22:23,080
beyond that during, you know,
2021 or 22 and prices got up to

385
00:22:23,560 --> 00:22:27,920
$600.00.
So over once, once the transport

386
00:22:27,920 --> 00:22:32,200
gets capped in there or port
costs really don't change, all

387
00:22:32,200 --> 00:22:35,920
of a sudden the US assets start
to cash flow way more than their

388
00:22:35,920 --> 00:22:39,760
Australian counterparts.
And so, and even, you know, if

389
00:22:39,760 --> 00:22:42,680
you look at a company like
Stanmore, that relativity that,

390
00:22:42,680 --> 00:22:47,120
that, you know, 77% relativity
or what it is, is a benefit to

391
00:22:47,120 --> 00:22:49,760
them because they just have to
payless to the government and

392
00:22:49,760 --> 00:22:53,280
tax.
So that to me is kind of the

393
00:22:53,280 --> 00:22:57,000
dynamic of, you know, this coke
and coal market over the next

394
00:22:57,320 --> 00:22:59,000
few years.
From an investor's standpoint,

395
00:22:59,000 --> 00:23:02,280
it's like when when prices are
really low, you have to find the

396
00:23:02,280 --> 00:23:06,560
companies that can go and
compete on a cost basis and, you

397
00:23:06,560 --> 00:23:10,160
know, get the best margin.
But when the price is rising,

398
00:23:10,600 --> 00:23:14,120
you have to find the people who
can maximise their margin at a

399
00:23:14,120 --> 00:23:17,240
faster rate of acceleration than
everybody else.

400
00:23:17,520 --> 00:23:20,960
And that's, that's really the
difference between the two

401
00:23:21,040 --> 00:23:23,840
regimes.
You know, Peabody's rationale

402
00:23:23,840 --> 00:23:27,400
for buying these assets is that
it's, you know, it's, it's close

403
00:23:27,400 --> 00:23:29,800
to where demand increases are
going to be.

404
00:23:29,800 --> 00:23:31,600
And that's right.
They're not going to have a

405
00:23:31,600 --> 00:23:33,400
problem with branding these or
selling these.

406
00:23:33,400 --> 00:23:37,400
Whereas, you know, in, in lean
times, the US does have, you

407
00:23:37,400 --> 00:23:41,600
know, some comparative problems.
So this is a very long term sort

408
00:23:41,600 --> 00:23:46,680
of vision for, for, for Peabody
as a company, which comports

409
00:23:46,680 --> 00:23:49,760
with the fact that they're, you
know, 150 plus years old.

410
00:23:50,440 --> 00:23:54,960
They, they want to be mining
coal in, you know, 2134 or 2124

411
00:23:54,960 --> 00:23:57,600
or whatever.
So, so the, the, the idea that

412
00:23:57,600 --> 00:24:02,080
they're going to be, you know,
out last their management is, is

413
00:24:02,080 --> 00:24:07,040
of importance to them.
On the investor side, what's

414
00:24:07,040 --> 00:24:09,440
happened over the last few
months is they've, they've come

415
00:24:09,440 --> 00:24:12,600
out and said that shareholder
returns are a priority and then

416
00:24:12,960 --> 00:24:15,960
turned around and done a deal
for a lot of people, which we've

417
00:24:15,960 --> 00:24:18,240
seen, you know, result of the
stock price here over the last

418
00:24:18,240 --> 00:24:19,520
few, over the last couple of
days.

419
00:24:20,200 --> 00:24:23,640
That does not work with what
they were told.

420
00:24:23,960 --> 00:24:26,240
And, you know, they were told
one thing and Peabody went out

421
00:24:26,240 --> 00:24:29,640
and did another thing.
And that's not cool if you're

422
00:24:29,640 --> 00:24:34,440
measuring your success in terms
of profit and loss over weeks

423
00:24:34,600 --> 00:24:38,520
and months and quarters.
It's also really rich to say

424
00:24:38,560 --> 00:24:42,680
it's also really rich to a month
and a half ago do a full webinar

425
00:24:42,680 --> 00:24:46,280
saying how Centurion is the
greatest coke and coal project

426
00:24:46,560 --> 00:24:53,720
globally, and then six weeks
later come out and say we're

427
00:24:53,720 --> 00:25:00,680
going to lever up to buy assets
that, look, I mean, Grosvenor's

428
00:25:00,680 --> 00:25:03,640
on fire.
Like, like if you're a Peabody

429
00:25:03,640 --> 00:25:07,480
shareholder, and hence the
joking tweet last Thursday

430
00:25:07,480 --> 00:25:11,720
night, I mean, this is a here we
go again.

431
00:25:11,720 --> 00:25:15,480
Like, OK, yeah, maybe Peabody
knows how to fix it in due time,

432
00:25:15,480 --> 00:25:18,320
but you're Peabody.
If you're a Peabody shareholder,

433
00:25:18,320 --> 00:25:21,640
now you go, OK, we have to work
through this contingent.

434
00:25:22,160 --> 00:25:25,520
We have to deliver on this plan
and then we need Centurion to

435
00:25:25,520 --> 00:25:28,920
come in because there's really
no free cash flow unless met

436
00:25:28,920 --> 00:25:30,720
spikes.
But then you really don't get a

437
00:25:30,720 --> 00:25:33,920
huge free cash flow increase
because of the royalties plus

438
00:25:33,920 --> 00:25:36,720
the contingent.
So you need Centurion to

439
00:25:36,720 --> 00:25:38,560
deliver.
So then the rest of the business

440
00:25:38,560 --> 00:25:41,600
can deliver the balance sheet
because then you have a huge

441
00:25:41,720 --> 00:25:46,520
speculation on how much debt can
a coal company actually hold.

442
00:25:46,520 --> 00:25:48,920
If we talked about this four
years ago, no debt was

443
00:25:48,920 --> 00:25:51,200
acceptable.
Now maybe some debt is

444
00:25:51,200 --> 00:25:54,960
acceptable, but every management
team and board remembers the

445
00:25:54,960 --> 00:25:58,400
world where you can refinance
maturing debt.

446
00:25:59,040 --> 00:26:02,160
So we are a long way away from
people feel uncomfortable

447
00:26:02,160 --> 00:26:05,120
saying, oh, I can have one turn
of EBITDA on my business

448
00:26:05,120 --> 00:26:08,080
perpetually.
But now Centurions got to come

449
00:26:08,080 --> 00:26:10,520
on, you got to work through
these four years executing this

450
00:26:10,520 --> 00:26:15,120
brilliantly.
Then you've got Grosvenor in the

451
00:26:15,120 --> 00:26:18,280
meantime.
I mean, isn't Peabody still kind

452
00:26:18,280 --> 00:26:23,160
of a thermal coal company with a
question of what's going on in

453
00:26:23,160 --> 00:26:26,960
Wyoming and Illinois Basin?
I mean, if I had to speculate, I

454
00:26:26,960 --> 00:26:31,080
think the grander plan here has
to be that MacArthur is going to

455
00:26:31,080 --> 00:26:34,200
come back because Peabody in the
future will be an Australian

456
00:26:34,200 --> 00:26:39,520
company and AUS company and
we're thinking about 20 thirties

457
00:26:39,520 --> 00:26:43,400
M&A then.
But this Australian portfolio

458
00:26:44,440 --> 00:26:48,760
once you digest the next four
years is an interesting

459
00:26:48,760 --> 00:26:51,400
portfolio to pair with someone
else.

460
00:26:52,000 --> 00:26:57,080
It's just the, it's, it's
getting that they're, it's kind

461
00:26:57,080 --> 00:27:00,320
of forsaking the USA quite
ironically.

462
00:27:00,960 --> 00:27:04,080
But you have an NYC listing and
the Americans love coal more

463
00:27:04,080 --> 00:27:06,160
than anywhere else when coal was
going to be on the New York

464
00:27:06,160 --> 00:27:09,960
Stock Exchange.
So maybe there is some 3-4

465
00:27:09,960 --> 00:27:12,680
dimensional chess being played.
But you still got to deliver on

466
00:27:12,680 --> 00:27:14,480
these assets in the next four or
five years.

467
00:27:14,880 --> 00:27:20,400
And the unfortunately there's
isn't, I don't think the licence

468
00:27:20,400 --> 00:27:22,760
to do that quite bad.
So they got to, they got to

469
00:27:22,760 --> 00:27:25,480
deliver perfectly.
Yeah.

470
00:27:25,480 --> 00:27:28,640
And to your, to your point, my
marsupial friend from earlier,

471
00:27:30,040 --> 00:27:33,320
you mentioned that the sellers
have done really well in this

472
00:27:33,320 --> 00:27:35,920
environment.
If what you're proposing does

473
00:27:35,920 --> 00:27:40,040
actually come to fruition, it's
going to be really fun to sell

474
00:27:40,280 --> 00:27:44,760
or spin off some assets in that
time frame when people have

475
00:27:44,760 --> 00:27:48,960
realised that, you know, you
can't project manage your way to

476
00:27:49,000 --> 00:27:53,800
green steel in, in a decade.
Like that's that, that idea in

477
00:27:53,800 --> 00:27:56,880
and of itself is a, is a pipe
dream even to, even to this

478
00:27:56,880 --> 00:27:59,960
liberal here.
You know, there there's, there's

479
00:27:59,960 --> 00:28:04,560
a, it's not possible in the, the
time frame that people want to

480
00:28:04,560 --> 00:28:07,040
achieve it.
And as a result of that, and

481
00:28:07,040 --> 00:28:10,680
because there's no more premium
low Vol really coming to market

482
00:28:10,960 --> 00:28:18,440
like this is the part of able
supply that is going to be under

483
00:28:18,440 --> 00:28:19,880
a lot of pressure over this
time.

484
00:28:19,880 --> 00:28:22,760
That's the fundamental thesis
for why medical is going to be

485
00:28:22,760 --> 00:28:25,880
much higher for longer.
We've had a really terrible year

486
00:28:26,040 --> 00:28:31,560
and the lowest we could manage
to get was like 179, which is,

487
00:28:32,440 --> 00:28:37,680
you know, almost $30 higher than
what the long term price was in

488
00:28:37,680 --> 00:28:41,760
the before times pre COVID.
And that's that's the thing

489
00:28:41,760 --> 00:28:46,200
that's sort of when I think
about it makes me incredibly

490
00:28:46,200 --> 00:28:50,520
optimistic for the next decade.
Doesn't do much for, you know,

491
00:28:50,720 --> 00:28:54,960
short term enthusiasm for for
BTU shares probably.

492
00:28:54,960 --> 00:28:58,400
But you know, stepping into
their shoes and looking out over

493
00:28:58,400 --> 00:29:03,120
the course of a decade, I get it
and it and it does make some

494
00:29:03,120 --> 00:29:06,120
sense and they can't capitalise
on it and the rest of the

495
00:29:06,160 --> 00:29:08,240
business they.
They overpaid.

496
00:29:08,240 --> 00:29:12,000
I mean, we've joked about this,
but I mean to outbid Gary Nagle

497
00:29:12,000 --> 00:29:16,360
and Matt Lattimore for
Queensland cooking coal asset.

498
00:29:17,000 --> 00:29:19,800
The moment you find out you win,
you got to be sitting there

499
00:29:19,800 --> 00:29:23,240
going have I, it's the Arrested
Development mean I've made a

500
00:29:23,240 --> 00:29:27,840
huge mistake.
But you bring up a good point

501
00:29:27,840 --> 00:29:31,640
about, I mean BHP has this
thesis that the quality spreads

502
00:29:31,640 --> 00:29:34,240
are going to continue to blow
out and the highest the premium

503
00:29:34,240 --> 00:29:37,040
hard cooking coals are only
going to trade it a bigger and

504
00:29:37,040 --> 00:29:38,960
bigger premium to the other
cooking coals.

505
00:29:39,440 --> 00:29:40,960
Well, where do you go get that
stuff?

506
00:29:40,960 --> 00:29:45,120
I mean, in the Queensland
royalty regime, no one's really

507
00:29:45,120 --> 00:29:47,640
inclined to build a Greenfield
in Queensland.

508
00:29:48,000 --> 00:29:50,760
I mean, frankly, I probably
would say 20-30 bucks of the

509
00:29:50,760 --> 00:29:55,000
price is just the fact that that
royalty regime exists because no

510
00:29:55,000 --> 00:29:57,680
one's willing to go play and be
an entrepreneur in Queensland

511
00:29:57,680 --> 00:29:58,720
right now.
You're just not going to get

512
00:29:58,720 --> 00:30:02,080
paid that one or two boom year
every decade that keeps you

513
00:30:02,080 --> 00:30:04,800
alive and actually makes this
fun and worthwhile.

514
00:30:05,800 --> 00:30:08,400
You don't even get the windfall.
So where do you go?

515
00:30:08,400 --> 00:30:13,400
I mean, Blue Creek is a really
good high Vol, a asset, but it's

516
00:30:13,400 --> 00:30:16,680
not the low Vol of seven because
that's just how the basin works.

517
00:30:16,680 --> 00:30:20,200
As you move across the river,
the Vol goes up.

518
00:30:20,680 --> 00:30:23,000
So where in the West actually
is?

519
00:30:23,040 --> 00:30:25,040
You'd know West Virginia better
than me, Matt.

520
00:30:25,320 --> 00:30:29,080
But there isn't really like a
sweet low Vol premium low Vol

521
00:30:29,320 --> 00:30:31,280
seem just waiting to be hit in
West Virginia.

522
00:30:31,680 --> 00:30:34,600
So where is it?
It's, it's probably, if Gary is

523
00:30:34,600 --> 00:30:40,280
so inclined and gracious enough
to debottleneck Elk Valley

524
00:30:40,280 --> 00:30:43,640
resources and does he want to go
talk to the, the Canadian

525
00:30:43,640 --> 00:30:45,640
government about buying the
Dominion coal blocks,

526
00:30:45,640 --> 00:30:49,480
particularly Parcel 73.
But other than that, I just

527
00:30:49,480 --> 00:30:56,240
don't know where you go find
1012 million tonnes of Soraji

528
00:30:56,240 --> 00:31:00,800
Morin BA peak downs, quality,
Greenfield, incremental capacity

529
00:31:00,800 --> 00:31:02,760
and these things are depleting
for all the talk.

530
00:31:03,080 --> 00:31:07,440
And we always get these, these
lists of the copper pipeline and

531
00:31:08,080 --> 00:31:12,120
big copper projects of 100 KT,
200 KT for 20 years.

532
00:31:12,120 --> 00:31:15,000
I mean, go do the same analysis
for coke and coal.

533
00:31:16,720 --> 00:31:18,400
It's even.
It's an even shorter list.

534
00:31:18,800 --> 00:31:21,640
Maybe the Canadians will get
will get Religion mate and Gina

535
00:31:21,640 --> 00:31:25,440
will have her way with Grassy
Valley. 7072% of the residents

536
00:31:25,440 --> 00:31:28,160
of Crows Nest voted in favour of
the development of that project.

537
00:31:28,160 --> 00:31:33,720
I think it was overnight.
That's all that news. 72%, yeah.

538
00:31:34,720 --> 00:31:36,480
That's great.
That's.

539
00:31:39,200 --> 00:31:43,120
Koala, you made a comment just
on the the debt levels within,

540
00:31:43,120 --> 00:31:45,640
within Glencore a little while
ago.

541
00:31:45,640 --> 00:31:50,160
It's sort of comparing it back
to the trophy, but I think 2016,

542
00:31:50,160 --> 00:31:53,200
roughly 8 billion I've got in my
sort of mind.

543
00:31:53,520 --> 00:31:56,880
How receptive do you kind of
think they'll be to lifting that

544
00:31:56,880 --> 00:31:58,840
debt cap?
They've got net debt cap I.

545
00:32:00,320 --> 00:32:11,040
Mean, I think in a totally
sadistic, arrogant way, sowing

546
00:32:11,040 --> 00:32:15,640
discipline and driving all of us
insane further reinforces the

547
00:32:15,640 --> 00:32:20,160
point that we've demanded
capital discipline from these

548
00:32:20,160 --> 00:32:25,960
companies and who are they to
deny us what we want and

549
00:32:25,960 --> 00:32:29,760
therefore tighten up the medium
term supply demand balances.

550
00:32:30,120 --> 00:32:31,520
What do I think you probably
get?

551
00:32:33,880 --> 00:32:36,520
Let's see when Vitera closes,
that should bring in a couple

552
00:32:36,520 --> 00:32:39,000
that should bring in some cash
and some bungee shares.

553
00:32:39,000 --> 00:32:44,440
Which bungee shares, which could
be, I think eventually you could

554
00:32:44,440 --> 00:32:46,160
probably consider that
effectively cash.

555
00:32:46,600 --> 00:32:50,240
I don't know.
Does 10 become you throw in the

556
00:32:50,240 --> 00:32:55,160
Bungie shares and the Vitera
cash, maybe it's 10 is

557
00:32:55,280 --> 00:32:59,800
unofficially over 13.
But like it's a function of I

558
00:32:59,800 --> 00:33:02,520
think having discipline and
having credibility as a

559
00:33:02,520 --> 00:33:05,000
management team.
You almost have the case.

560
00:33:05,000 --> 00:33:09,400
Why would I?
Why would I extend myself here?

561
00:33:11,040 --> 00:33:15,200
Why would I give you what you
want when you won't even give me

562
00:33:15,200 --> 00:33:21,440
a valuation on my own stock that
recognises that you see the how

563
00:33:21,440 --> 00:33:30,840
robust my business is.
So if I'm, if, if I was Gary,

564
00:33:30,840 --> 00:33:34,880
I'd be wondering why do I, why
do I loosen up at all?

565
00:33:35,080 --> 00:33:39,200
Because actually, at the end of
the day, by not loosening up,

566
00:33:39,840 --> 00:33:42,200
you probably end up making more
money in the long run.

567
00:33:48,800 --> 00:33:50,280
I wonder why I'm.
Not exciting.

568
00:33:50,360 --> 00:33:51,960
I'm not expecting any crazy in
February.

569
00:33:51,960 --> 00:33:56,760
I mean you'll get you'll
probably get I'm guessing like

570
00:33:56,760 --> 00:34:00,960
thumb in the air 3 to 5 billion
of buyback plus dividends all in

571
00:34:00,960 --> 00:34:04,120
combined.
And then you'll get a top up in

572
00:34:04,120 --> 00:34:07,680
August and it's just going to
be, it's almost going to be like

573
00:34:07,680 --> 00:34:11,840
Chinese water torture, just
slowly letting slowly the

574
00:34:11,840 --> 00:34:14,320
buybacks erode away at the share
count.

575
00:34:15,880 --> 00:34:18,280
What I mean, what deal, what
deals are actually there to do

576
00:34:18,480 --> 00:34:21,679
for Glencore right now?
Because we've heard Gary say I'm

577
00:34:21,679 --> 00:34:24,320
not going to do copper until the
market's crying out for the

578
00:34:24,320 --> 00:34:27,400
tonnes.
What I hear when I when he says

579
00:34:27,400 --> 00:34:33,440
that is until I get an IRR on
that is equal to buying back my

580
00:34:33,440 --> 00:34:37,639
stock using spot copper, I'm not
going to use copper prices 20 to

581
00:34:37,639 --> 00:34:41,360
30% above spot to justify the
investment.

582
00:34:41,360 --> 00:34:44,480
So it's got to compete with
buying back or quite frankly,

583
00:34:44,480 --> 00:34:47,679
it's got to compete with the
next coal deal if there ever is

584
00:34:47,679 --> 00:34:51,600
one.
He's showing restraint, which is

585
00:34:51,600 --> 00:34:55,719
good.
Breaking news, nothing to do

586
00:34:55,719 --> 00:34:57,760
with coal.
How fucking good is douche SAP?

587
00:34:58,000 --> 00:35:01,760
Wow.
But in the air, on the ground,

588
00:35:01,880 --> 00:35:07,640
Geo Fizz, magnetics, bloody
gravity, bloody seismic surveys.

589
00:35:08,000 --> 00:35:10,080
Nathan Daish.
It is a specialised skill

590
00:35:10,080 --> 00:35:14,360
required to to execute and get
the data that is so important to

591
00:35:14,680 --> 00:35:17,840
conduct proper geophysics,
geology, everything.

592
00:35:18,160 --> 00:35:21,400
Mate, Yeah, look, Carl's good.
I like Carl, but I'm not going

593
00:35:21,400 --> 00:35:23,640
to try wave this into Carl
because Daish that are just

594
00:35:23,640 --> 00:35:26,120
awesome in their own right, not
even coal related.

595
00:35:26,120 --> 00:35:28,600
They could probably bloody do
some fizz to find you Carl.

596
00:35:28,800 --> 00:35:31,280
They'll find you any bloody
metal underground.

597
00:35:31,720 --> 00:35:34,280
It's the first step of
exploration and mining.

598
00:35:34,280 --> 00:35:38,040
Is getting Daish SAT on the
ground or up in the air doing GI

599
00:35:38,040 --> 00:35:40,320
Fizz work for you?
They're the AGI fizz company.

600
00:35:40,320 --> 00:35:42,920
I know because I only need to
know Dash SAT Easy as that.

601
00:35:42,920 --> 00:35:44,000
Complete go brainer.
How are?

602
00:35:44,160 --> 00:35:46,160
You going to find your discovery
without having all of the data?

603
00:35:46,160 --> 00:35:47,280
And where do you get your data?
How are?

604
00:35:47,280 --> 00:35:49,400
You going to use the word
discovery in an announcement

605
00:35:49,400 --> 00:35:52,400
without Dash SAT call Nathan
Dash.

606
00:35:52,400 --> 00:35:54,760
His number's in the show notes.
So let's get back to Cole I.

607
00:35:55,720 --> 00:35:58,720
Want to get your Yeah, but both
Matt and Crawley, your opinion

608
00:35:58,720 --> 00:36:01,440
on the the, you know, the
parties that were in the process

609
00:36:01,440 --> 00:36:05,040
that ultimately didn't come away
with the Chalkies maybe better

610
00:36:05,040 --> 00:36:07,120
off or worse.
And I think we've got to do a

611
00:36:07,120 --> 00:36:09,040
Ding, Ding, Ding.
That he owns Angle.

612
00:36:09,040 --> 00:36:10,320
Oh yeah, fuck.
I own Anglo.

613
00:36:10,320 --> 00:36:12,600
I own shit.
I probably should should have

614
00:36:12,600 --> 00:36:16,240
said that.
I own Yankel, so yeah.

615
00:36:16,240 --> 00:36:19,600
So like like on the on, on.
Well, we'll start with the

616
00:36:19,600 --> 00:36:22,320
seller actually on Anglo's
front, like you know, above

617
00:36:22,320 --> 00:36:28,040
expectations a point for a point
for Duncan and buys himself some

618
00:36:28,040 --> 00:36:29,360
time.
Do you would you agree with

619
00:36:29,360 --> 00:36:33,640
that?
Yeah, I think so.

620
00:36:34,480 --> 00:36:38,360
You know, the next phases of of
Anglo's divestment are a lot

621
00:36:38,360 --> 00:36:39,960
harder than this one.
Let's be fair.

622
00:36:40,920 --> 00:36:45,120
There were, there were people
who came out of the woodwork and

623
00:36:45,120 --> 00:36:48,040
got very far into the process
that I was surprised at.

624
00:36:48,440 --> 00:36:50,760
I was surprised, you know, Yan
Cole was.

625
00:36:50,880 --> 00:36:54,600
I thought Gary would come in and
just take this down, but the

626
00:36:54,600 --> 00:36:57,840
willingness of Peabody to pay up
and do the contingency deal and

627
00:36:57,840 --> 00:37:00,240
they'll they'll probably sell
down a portion of it a la

628
00:37:00,240 --> 00:37:01,640
Whitehaven at some point in
time.

629
00:37:01,880 --> 00:37:04,360
I don't know if they're going to
get the same premium that they

630
00:37:04,360 --> 00:37:09,360
paid in the short term, but it
even a billion helps close this

631
00:37:09,360 --> 00:37:13,600
thing, right?
I mean, I'm, I was surprised

632
00:37:13,600 --> 00:37:17,040
that that Stanmore got as far as
they did, but they brought in

633
00:37:17,040 --> 00:37:20,440
this consortium with the gear
and, and, and Matt Lattimore,

634
00:37:20,760 --> 00:37:23,160
which all of a sudden sort of
makes it intriguing, right?

635
00:37:24,960 --> 00:37:27,720
And, you know, just the fact
that they, that they beat out

636
00:37:27,720 --> 00:37:30,840
Glencore for the assets.
I think, I think to me, it's

637
00:37:30,840 --> 00:37:34,080
kind of indicative that this,
out of all the things that Anglo

638
00:37:34,080 --> 00:37:37,480
has to sell this, this was the
easiest package.

639
00:37:37,480 --> 00:37:39,040
There were people who are
willing to come out.

640
00:37:39,040 --> 00:37:42,120
They recognise the value of
premium low volatile medical

641
00:37:42,120 --> 00:37:46,240
over the next, you know, not,
not 2 cycles, but probably 4:00

642
00:37:46,240 --> 00:37:50,720
to 8:00 at at the very least.
And, you know, and, and we're

643
00:37:50,720 --> 00:37:53,680
willing to, to pay up for it.
You know, when you think about

644
00:37:53,680 --> 00:37:56,760
nickel, I mean, nickels going to
be tough.

645
00:37:56,960 --> 00:38:01,800
Indonesia makes nickel, you
know, pretty, pretty difficult.

646
00:38:02,840 --> 00:38:07,440
You know, platinum, platinum in
South Africa defines challenges,

647
00:38:07,440 --> 00:38:09,640
I think for a lot of people, you
know, mining, mining conditions

648
00:38:09,640 --> 00:38:12,160
and those sorts of things.
And then, and then you have the

649
00:38:12,160 --> 00:38:13,920
beers.
Like can the beers stand on its

650
00:38:14,320 --> 00:38:16,840
own?
Or, you know, I, I don't know

651
00:38:16,840 --> 00:38:18,880
the answer to that because I'm
the world's worst diamond

652
00:38:18,880 --> 00:38:22,600
analyst.
But you know, the like, there

653
00:38:22,600 --> 00:38:24,640
have been a couple of research
notes that have come out that

654
00:38:24,640 --> 00:38:27,080
sort of highlighted those.
I mean, nickel's not undoable, I

655
00:38:27,080 --> 00:38:30,760
guess, but it's just, it's not,
not the best time and it's not

656
00:38:30,760 --> 00:38:34,040
the best package of assets.
It's really copper is where it

657
00:38:34,040 --> 00:38:37,200
is what people are horny for.
And that's the one that's going

658
00:38:37,200 --> 00:38:39,920
to make the, you know, the
splashy headlines.

659
00:38:39,920 --> 00:38:41,880
I mean, that's what BHP wants at
the end of the day.

660
00:38:41,880 --> 00:38:45,720
That's what Mike Henry wanted to
come in and and and snatch out

661
00:38:46,000 --> 00:38:50,000
from under them.
So I don't know Koala, what do

662
00:38:50,000 --> 00:38:54,360
you think the the process is
going to look like for Anglo as

663
00:38:54,360 --> 00:38:56,400
we go from from here on into the
next stages?

664
00:38:57,440 --> 00:39:00,440
Well, let's just look at the
half year result numbers

665
00:39:01,120 --> 00:39:05,640
presentation, 11.1 billion of
net debt, 5 billion of proceeds

666
00:39:05,640 --> 00:39:08,880
between the deferred, the
upfront from Peabody, the boomer

667
00:39:08,880 --> 00:39:16,680
money and so 11 just became 6
the nickel.

668
00:39:16,760 --> 00:39:20,920
These are not these are not
massive nickel sulphide, copper,

669
00:39:20,920 --> 00:39:25,640
PGM polymetallic operations.
It's 1% of EBITDA mostly in

670
00:39:25,640 --> 00:39:27,880
Brazil.
Give it away.

671
00:39:30,840 --> 00:39:34,160
The PGM business, they just did
a 500 million block like

672
00:39:34,400 --> 00:39:40,080
yesterday or two days ago, so 6
billions now 5.5.

673
00:39:40,080 --> 00:39:42,400
They also did another block like
three or four months ago.

674
00:39:42,680 --> 00:39:48,120
I think that was after the that
was after the half year.

675
00:39:48,120 --> 00:39:54,920
So I think it's now five net
debt pro forma can the can Anglo

676
00:39:54,920 --> 00:39:58,960
Platinum which runs as I recall
net cash, can it incur net debt

677
00:39:59,760 --> 00:40:05,360
in some form maybe, but 5
billion and so PGMS are gone.

678
00:40:05,800 --> 00:40:10,240
Then you look at De Beers.
I mean, is there a reason De

679
00:40:10,240 --> 00:40:13,600
Beers, which is a diamond
operation, why couldn't that be

680
00:40:13,600 --> 00:40:17,080
a Tiffany's S brand?
Or have some very interested

681
00:40:17,080 --> 00:40:20,840
people that see the pathway to
that's not a mining operation,

682
00:40:20,840 --> 00:40:24,200
that's a luxury operation.
If De Beers was, if someone's

683
00:40:24,200 --> 00:40:26,680
willing to invest in stores and
so forth, But you're telling me

684
00:40:26,680 --> 00:40:28,560
you're not going to get a
billion or 2 billion for De

685
00:40:28,560 --> 00:40:30,520
Beers?
Yeah, you probably are.

686
00:40:31,040 --> 00:40:34,760
I mean, this all comes together
and everything closes and goes

687
00:40:34,760 --> 00:40:37,480
down to 3 billion net debt.
They're kind of home free.

688
00:40:38,720 --> 00:40:44,240
And Duncan then gets to play
this little game of proving out

689
00:40:45,800 --> 00:40:49,000
that are RE rates there or that
the premium iron and the copper

690
00:40:49,000 --> 00:40:54,080
can continue on.
But I think then the question is

691
00:40:54,080 --> 00:40:56,440
just what happens to the stock
and do they continue to execute?

692
00:40:56,480 --> 00:40:59,200
I mean, I think everyone I
talked about this at the time of

693
00:40:59,200 --> 00:41:02,240
the BHP bid in the 1st place, I
think everyone's chasing these

694
00:41:02,240 --> 00:41:05,840
like Freeport multiples and they
just don't recognise how much

695
00:41:05,840 --> 00:41:12,160
S&P inclusion, passive and
passive flows and the ability

696
00:41:12,160 --> 00:41:15,840
with massive trading liquidity
to appeal to a generalist who's

697
00:41:15,840 --> 00:41:18,840
just trying to do a rate of
change trade on a commodity

698
00:41:18,840 --> 00:41:21,960
price.
Renting a stock can drive some

699
00:41:21,960 --> 00:41:24,600
of these things.
So look, I think Duncan's,

700
00:41:25,120 --> 00:41:29,120
Duncan's a winner here.
I mean, 5 billion in proceeds

701
00:41:29,120 --> 00:41:33,960
with Grosvenor, one of the crown
jewels on fire is Brava.

702
00:41:35,240 --> 00:41:40,000
Absolutely brilliant.
So Duncan goes from someone who

703
00:41:40,000 --> 00:41:43,960
is on the ropes to someone who's
turned out to have one of the

704
00:41:43,960 --> 00:41:47,680
strongest years among mining
CEOs with this outcome.

705
00:41:50,800 --> 00:41:56,520
Yankel when Divvy.
When Kestrel.

706
00:41:58,240 --> 00:42:03,520
When Ferb When Ferb is is
probably the right answer to

707
00:42:03,520 --> 00:42:07,600
when Kestrel when.
When BMA.

708
00:42:13,560 --> 00:42:19,720
Interesting look there, Matt.
Yeah, it's, I don't think so,

709
00:42:19,720 --> 00:42:27,160
but it maybe maybe do one of
those, but maybe we'll see.

710
00:42:27,200 --> 00:42:31,920
It's when Ferb and I think when
Kestrel are probably the next,

711
00:42:31,960 --> 00:42:35,960
the next two questions, right?
I think Kestrel's going to be up

712
00:42:35,960 --> 00:42:38,240
for sale.
Koala and I talked about this

713
00:42:38,240 --> 00:42:40,840
for years at this point, You
know, when is that going to

714
00:42:41,120 --> 00:42:44,920
change hands And, and you know
what, what's the price going to

715
00:42:44,920 --> 00:42:47,840
be when that happens?
You know, I think I think Yanco

716
00:42:47,840 --> 00:42:52,280
would be a very good destination
for, for that asset in

717
00:42:52,280 --> 00:42:55,160
particular.
But you know, they got the, they

718
00:42:55,160 --> 00:42:58,400
got the balance sheet to, to,
to, to keep it up that, you

719
00:42:58,400 --> 00:43:02,200
know, the quality, honestly,
like quality Kestrel competes

720
00:43:02,200 --> 00:43:05,240
with a lot of US mines as well
into Asia Pacific.

721
00:43:05,240 --> 00:43:08,120
That's a that's a big foreign, I
think in a lot of USUS folks

722
00:43:08,120 --> 00:43:11,640
side.
So like, you know, I look at it

723
00:43:11,640 --> 00:43:14,800
as it's kind of an essential
operation for, you know, the,

724
00:43:15,000 --> 00:43:17,600
the, the next 10 years in the
market.

725
00:43:17,600 --> 00:43:20,320
I mean, there's, there's just
not a lot of really good, you

726
00:43:20,320 --> 00:43:24,680
know, quality, you know,
highball in in that part of the

727
00:43:24,680 --> 00:43:28,480
world and you know, Kestrels in
that, in that kind of tweener

728
00:43:29,040 --> 00:43:31,480
ball range between, you know,
mid and high.

729
00:43:31,760 --> 00:43:34,520
There's, there's a whole lot of
mid ball in Australia and the

730
00:43:34,520 --> 00:43:36,280
Indians mostly have dibs on
that.

731
00:43:36,840 --> 00:43:39,320
That's that's really integral to
their to their sort of cold

732
00:43:39,320 --> 00:43:41,760
blends.
But you know, right now, you

733
00:43:41,760 --> 00:43:45,480
know, the only highball game in
in the world is, you know, the

734
00:43:45,480 --> 00:43:50,560
combination of of AMR and in
Blue Creek and you know, to A to

735
00:43:50,560 --> 00:43:53,800
a lesser extent, Lear when when
Lear can produce, see if consult

736
00:43:53,800 --> 00:43:58,040
can can, can, you know, write
that production ship there.

737
00:43:58,800 --> 00:44:03,720
But that's the everything else
is just kind of like, you know,

738
00:44:04,360 --> 00:44:07,160
higher quality thermal coal.
When you really talk about the

739
00:44:07,200 --> 00:44:10,960
high Volt B assets and that and
the semi soft and, and that sort

740
00:44:10,960 --> 00:44:12,440
of stuff.
Like there's, there's a shortage

741
00:44:12,440 --> 00:44:16,440
of, you know, really, really
decent CSR material where you

742
00:44:16,440 --> 00:44:19,720
can, you can put into a blast
furn or into a coke oven and hit

743
00:44:19,720 --> 00:44:24,240
that like, you know, 26 or 27
Volt blend that Japan likes to

744
00:44:24,240 --> 00:44:27,360
hit or the 25 or 26 Volt blend
that India likes to hit.

745
00:44:27,760 --> 00:44:31,040
You, you need those components
in order to, in order to make

746
00:44:31,040 --> 00:44:34,280
good quality coke and, and make
good quality steel.

747
00:44:34,280 --> 00:44:38,440
So that's to me that's a an
important sort of dynamic there.

748
00:44:39,280 --> 00:44:42,760
I think Matt hits on a couple
things here, which is a kind of

749
00:44:42,760 --> 00:44:47,920
meeting with a backhoe marketing
guy last week who said like we

750
00:44:47,920 --> 00:44:49,560
talked about the different ball
numbers.

751
00:44:49,560 --> 00:44:52,720
And to a generalist, I think
frankly, even to me, it all

752
00:44:52,720 --> 00:44:55,120
sounds like total, like
gibberish chemistry

753
00:44:55,120 --> 00:44:57,400
gobbledygook.
But the reality is I'm putting

754
00:44:57,400 --> 00:44:59,640
these coke blends together and
making steel.

755
00:45:00,440 --> 00:45:03,280
These coals.
We talked about them as commies,

756
00:45:03,280 --> 00:45:05,760
but the truth is they're
actually specialty chemicals

757
00:45:06,200 --> 00:45:10,120
because these furnaces and these
blends are so critical now,

758
00:45:10,120 --> 00:45:13,360
we'll never get especially
Kemp's multiple on these stocks

759
00:45:13,360 --> 00:45:15,680
because if we did, you'd never
see me or Mad ever again.

760
00:45:16,880 --> 00:45:20,400
But I think there's something to
be said there.

761
00:45:20,920 --> 00:45:24,760
But also on Yan Cole, I think
the biggest debate is let's

762
00:45:24,760 --> 00:45:28,600
pretend they can't buy anything.
It's dividends and it's Gary

763
00:45:28,600 --> 00:45:30,160
Nagle.
I believe when he was last in

764
00:45:30,160 --> 00:45:33,600
Australia, he was talking about
why will NSW, why are they

765
00:45:33,600 --> 00:45:36,640
dragging their feet on
recognising that Cole has a much

766
00:45:36,640 --> 00:45:40,400
longer duration left that as the
rest of the world's figured out.

767
00:45:40,400 --> 00:45:42,800
So why isn't Monter Valley
getting mining licence

768
00:45:42,800 --> 00:45:47,480
extensions if I'm the and Cole
that's probably the most topical

769
00:45:47,480 --> 00:45:51,160
question right now as I think
about the portfolio as a non

770
00:45:51,160 --> 00:45:54,720
shareholder just outside looking
in and that's dividends.

771
00:45:54,880 --> 00:45:58,160
I mean, but they've executed
well at the M&A they have done

772
00:45:58,160 --> 00:46:01,600
has gone well.
I mean, it's a shame they

773
00:46:01,600 --> 00:46:06,160
haven't been able to do M&A
because of Ferb, but what's

774
00:46:06,160 --> 00:46:08,480
wrong with a business that's
just printing cash?

775
00:46:08,480 --> 00:46:12,080
And I mean, unless we wake up
and God forbid they've decided

776
00:46:12,080 --> 00:46:15,360
we're going to build solar farms
across the Outback.

777
00:46:17,840 --> 00:46:21,320
I mean, yeah, shame they missed,
but it is what it is.

778
00:46:22,440 --> 00:46:25,640
Stanmore, Stanmore, you just sit
back.

779
00:46:25,640 --> 00:46:28,560
You've done some amazing deals,
you have great partners.

780
00:46:29,080 --> 00:46:32,760
You print cash, you probably
take a look at Kestrel and you

781
00:46:32,760 --> 00:46:34,640
sit back and you just count your
money.

782
00:46:35,280 --> 00:46:38,400
They they actually acquired the
Greenfields project recently

783
00:46:38,800 --> 00:46:42,480
Koala in Eagle Downs which be
interesting to see if they

784
00:46:42,480 --> 00:46:46,920
develop.
Where does that come from?

785
00:46:46,920 --> 00:46:49,760
That was S 32.
South 32, yeah, that's. 32 S 32

786
00:46:49,760 --> 00:46:53,640
yeah, I mean, I, I did some of
the work on some work on Eagle

787
00:46:53,640 --> 00:46:55,840
Downs earlier in the year.
I've done it twice now.

788
00:46:56,280 --> 00:46:59,280
I I think that's a, you know, a
20-30.

789
00:46:59,480 --> 00:47:02,120
It's probably going to be wind
up being like a 2035 part of the

790
00:47:02,120 --> 00:47:04,600
cycle for that.
Yeah.

791
00:47:04,680 --> 00:47:09,600
I'd be surprised if it came out
sooner, but it's to me not a

792
00:47:09,600 --> 00:47:13,320
priority at the moment.
That's like a call option on,

793
00:47:13,760 --> 00:47:17,600
you know, that particular, that
particular quality.

794
00:47:19,480 --> 00:47:21,600
The the the other thing I think
that's that's sort of

795
00:47:21,600 --> 00:47:26,040
interesting to think about which
in in the market really nobody's

796
00:47:26,040 --> 00:47:31,360
talking about it.
Is that because the price of, of

797
00:47:31,360 --> 00:47:35,840
medcoal like in the Peabody
Anglo deal sort of confirms that

798
00:47:35,840 --> 00:47:39,640
everybody in the industry thinks
prices are going to be elevated,

799
00:47:39,960 --> 00:47:43,640
You know, start with the two on
average, give or take a little

800
00:47:43,640 --> 00:47:47,080
bit for a long period of time
and are going to rise over time

801
00:47:47,080 --> 00:47:49,400
because there's just no, there's
no more tonnes coming on.

802
00:47:49,720 --> 00:47:52,000
When you look at it from the
other perspective, let's go from

803
00:47:52,000 --> 00:47:54,680
the steel perspective, you're
like, Jesus, my costs are really

804
00:47:54,680 --> 00:47:58,280
high and my downstream demand is
India.

805
00:47:58,520 --> 00:48:01,920
Like India's really the only
country that's growing domestic

806
00:48:01,920 --> 00:48:04,640
steel demand.
Over the next 20 years, China's

807
00:48:04,640 --> 00:48:07,160
going to be in decline.
And in the global steel industry

808
00:48:07,160 --> 00:48:12,280
is basically like, will India's
growth offset China's decline?

809
00:48:12,280 --> 00:48:13,760
We don't, we don't quite know
yet.

810
00:48:14,680 --> 00:48:18,000
All of that is going to depend
on, you know, China policy,

811
00:48:18,000 --> 00:48:21,440
which, you know, I have no track
record of being able to predict.

812
00:48:22,080 --> 00:48:25,120
You know, I'm a consumer of that
information, not a generator,

813
00:48:25,400 --> 00:48:29,800
right?
So, you know, if if you're

814
00:48:29,800 --> 00:48:33,080
looking at your downstream
demand and downstream demand

815
00:48:33,080 --> 00:48:36,520
doesn't look maybe as robust as
it once does, and maybe this

816
00:48:36,520 --> 00:48:38,520
starts to drag on, you're
looking at your cooking cold

817
00:48:38,520 --> 00:48:42,360
costs going, geez, how do I, how
am I going to mitigate this over

818
00:48:42,360 --> 00:48:44,600
time?
And the way that Europe did it

819
00:48:44,600 --> 00:48:48,000
when, when labour costs rose and
is they started injecting more

820
00:48:48,000 --> 00:48:51,360
PCI.
And there's nobody talking about

821
00:48:51,360 --> 00:48:55,800
PCI right now, low Vol PCI in
particular, because the lower

822
00:48:55,800 --> 00:48:57,280
the Vol, the higher the fixed
carbon.

823
00:48:57,280 --> 00:49:00,000
And it's really what you're
injecting, heat content and

824
00:49:00,000 --> 00:49:04,160
carbon to replace your coke.
Nobody's really talking about

825
00:49:04,160 --> 00:49:07,520
that either.
And in Russia, being in the

826
00:49:07,520 --> 00:49:12,120
industry, being in such such a
foible that it is, you know, you

827
00:49:12,120 --> 00:49:15,360
could, you could make a case
that, you know, quality low Vol

828
00:49:15,360 --> 00:49:19,080
PCI is probably going to be
constrained when we get out into

829
00:49:19,080 --> 00:49:22,560
that, into that era as well,
because the injection rates at

830
00:49:22,560 --> 00:49:26,720
Indian coca, that Indian blast
furnaces are going to start to

831
00:49:26,720 --> 00:49:29,400
creep up toward the injection
rates that we've seen in Europe.

832
00:49:30,240 --> 00:49:31,920
You know, here over the past 10
years.

833
00:49:32,520 --> 00:49:35,160
I haven't seen anybody really
discussing that at all.

834
00:49:36,160 --> 00:49:39,480
You know, that implies that
relativities for, you know, low

835
00:49:39,480 --> 00:49:41,840
Vol PCI producers are going to
improve over time, which by the

836
00:49:41,840 --> 00:49:46,320
way, includes Peabody.
So, you know, there's, there's a

837
00:49:46,320 --> 00:49:50,200
lot more I think going on in the
global steel market than the

838
00:49:50,200 --> 00:49:54,360
necessarily meets the eye.
And it's, it's a, it's a story

839
00:49:54,360 --> 00:49:56,720
that's in flux.
Like I think everybody knows the

840
00:49:56,720 --> 00:50:00,160
hard coke and cold story.
But depending on, you know, sort

841
00:50:00,160 --> 00:50:05,240
of like geopolitical changes or
supply chain rearrangements, the

842
00:50:05,240 --> 00:50:08,560
musical chairs of geopolitics
influencing who can trade with

843
00:50:08,560 --> 00:50:15,000
whom, the, the blends of coke
ovens and the, the, the cost

844
00:50:15,000 --> 00:50:18,480
mitigation strategies of blast
furnished steel producers also

845
00:50:18,480 --> 00:50:20,840
play into how this market
develops over time.

846
00:50:21,040 --> 00:50:24,320
And that is a really complicated
market with a whole lot of

847
00:50:24,320 --> 00:50:28,880
moving parts, with a whole lot
of different people who have

848
00:50:28,880 --> 00:50:31,040
vested interest in the, in the
industry.

849
00:50:32,000 --> 00:50:34,360
And, you know, even even me
who's covered this market now

850
00:50:34,360 --> 00:50:38,400
for pushing 20 years, I mean, I,
I don't necessarily know how

851
00:50:38,400 --> 00:50:41,160
that's going to play out, but it
looks like it's going to be an

852
00:50:41,160 --> 00:50:42,720
issue 10 years from now.
It's.

853
00:50:43,400 --> 00:50:45,160
Probably the perfect spot for me
to put.

854
00:50:45,600 --> 00:50:47,840
I mean, you spoke of a tweet
from a speculator.

855
00:50:48,960 --> 00:50:51,920
I sort of tweeted out this
headline from from Reuters.

856
00:50:52,000 --> 00:50:56,120
It was said India's JSW steel
sale in talks with Mongolia for

857
00:50:56,120 --> 00:50:58,240
cooking coal shipments, sources
say.

858
00:50:58,240 --> 00:51:01,240
And his tweet was Rest in Peace
Queensland cooking coal.

859
00:51:02,920 --> 00:51:07,120
Is it as tired as that?
No, I mean I don't think so.

860
00:51:07,840 --> 00:51:11,760
So Mongolia can produce as much
semi soft as they can.

861
00:51:11,760 --> 00:51:15,040
And that's India has been pretty
clear about their blending

862
00:51:15,040 --> 00:51:19,320
strategy thus far, right?
They want as much high quality,

863
00:51:19,640 --> 00:51:23,600
high eye strength Coca Cola as
they can find reliably.

864
00:51:23,600 --> 00:51:27,200
And over time, you know, up to
as much as like 3040% of the

865
00:51:27,200 --> 00:51:29,080
blend.
And the rest of that blend

866
00:51:29,080 --> 00:51:32,800
they're going to pack with
absolute, you know, dog crap.

867
00:51:33,360 --> 00:51:36,680
So they're going to use domestic
coals, which don't have a lot of

868
00:51:36,680 --> 00:51:38,600
stability.
They're going to stamp charge

869
00:51:38,600 --> 00:51:43,240
Coke, which which you still need
stability for, but it, it really

870
00:51:43,240 --> 00:51:46,560
loosens the, the, the type of
highball material, which is

871
00:51:46,560 --> 00:51:48,640
really what that is.
You're still hitting your ball

872
00:51:48,640 --> 00:51:51,720
target, but you're filling that,
that upper portion with, with,

873
00:51:52,080 --> 00:51:54,480
you know, crap that doesn't
really help the, the inherent

874
00:51:54,480 --> 00:51:55,960
stability.
You're going to make up for that

875
00:51:56,520 --> 00:52:00,080
with stamp charging.
So like that that's that's true

876
00:52:00,080 --> 00:52:01,760
as well.
And there there are a lot of

877
00:52:01,760 --> 00:52:04,200
coals globally that can sort of
fit that bill.

878
00:52:04,200 --> 00:52:06,680
There are a lot of coals in New
South Wales that can sell into

879
00:52:06,880 --> 00:52:10,680
either thermal coal markets or
semi soft markets depending on

880
00:52:10,920 --> 00:52:13,880
what the demand for what the
demand looks like on the thermal

881
00:52:13,880 --> 00:52:17,560
side versus met.
We've seen that play out in the

882
00:52:17,880 --> 00:52:21,080
US with the development of the
Highball B market, which is

883
00:52:21,080 --> 00:52:24,640
really thermal coal with decent
cooking characteristics, but not

884
00:52:24,640 --> 00:52:27,440
traditionally good enough to be
included in traditional coke

885
00:52:27,440 --> 00:52:29,440
plants.
So those markets have been

886
00:52:29,440 --> 00:52:33,760
created for a reason.
The, the, the, the nomenclature

887
00:52:33,760 --> 00:52:36,400
in the Asia Pacific region in
Australia is a lot different

888
00:52:36,400 --> 00:52:38,560
from the nomenclature that we
have, but it's all kind of the,

889
00:52:39,080 --> 00:52:41,000
you know, different sides of the
same coin.

890
00:52:41,480 --> 00:52:44,880
Give me as much quality stuff as
I can afford and then fill the

891
00:52:44,880 --> 00:52:46,920
rest with as much crap as we can
put in it.

892
00:52:47,160 --> 00:52:50,040
That's super cheap.
And that's how you, you address

893
00:52:50,520 --> 00:52:51,520
the future.
And that's why that's why I

894
00:52:51,520 --> 00:52:53,920
brought up PCI, because that's
another way that you can, you

895
00:52:53,920 --> 00:52:56,440
just reduce the overall amount
of coke that you need so you

896
00:52:56,440 --> 00:52:59,200
don't have to rely on as much.
Like all these things are going

897
00:52:59,200 --> 00:53:01,240
to happen at the same time.
It's not one variable.

898
00:53:01,400 --> 00:53:03,200
It's a multi variable
calculation.

899
00:53:03,200 --> 00:53:06,720
And with a geopolitical like
overlay like this is, it's

900
00:53:06,840 --> 00:53:09,720
really hard.
It was really hard 10 years ago

901
00:53:09,720 --> 00:53:12,040
to figure this out.
It's even harder now.

902
00:53:12,920 --> 00:53:16,840
You know, in in when we were
laying, you know, the energy

903
00:53:16,840 --> 00:53:19,560
transition, the green steel
transition on top of that, it

904
00:53:19,560 --> 00:53:22,480
just added another layer of of
complexity.

905
00:53:22,480 --> 00:53:27,000
So these are all human decisions
that we'll have to see over time

906
00:53:27,200 --> 00:53:30,000
how it's going to play out.
I still feel confident in saying

907
00:53:30,640 --> 00:53:34,640
that the low Vol side of that
equation, you know, maybe not

908
00:53:34,640 --> 00:53:38,160
midvol, maybe midvol suffers,
maybe second tier hard cooking

909
00:53:38,160 --> 00:53:40,840
coal suffers over time.
Maybe those relativities don't

910
00:53:40,840 --> 00:53:43,440
do well.
But I think it's I think it's a

911
00:53:43,440 --> 00:53:47,040
given at this point that you do
need, you know, those quality

912
00:53:47,040 --> 00:53:49,160
coals for structure, period.
End Quote.

913
00:53:51,240 --> 00:53:54,760
I will just say that global
supply demand all interplays

914
00:53:57,240 --> 00:54:01,480
where if a tongue comes into
Mongol from Mongolia goes into

915
00:54:01,480 --> 00:54:04,320
China, that's one less time they
either have to produce

916
00:54:04,320 --> 00:54:06,640
domestically or import from the
seaborne market.

917
00:54:07,080 --> 00:54:11,520
But to a headline that says JSW
is exploring coke and coal from

918
00:54:11,520 --> 00:54:14,240
Mongolia, the koala has one
question.

919
00:54:14,240 --> 00:54:19,520
How many tonnes of coke and coal
have come out of Mongolia and

920
00:54:19,520 --> 00:54:23,080
been consumed in a country that
is not China or Russia?

921
00:54:23,880 --> 00:54:26,040
Honest to God question.
I don't know the answer, but I

922
00:54:26,040 --> 00:54:27,840
have a suspicion what the answer
is.

923
00:54:29,640 --> 00:54:32,960
But JSW has been involved in so
many of these processes and the

924
00:54:32,960 --> 00:54:37,160
fact they haven't been able to
be a dance partner even on the

925
00:54:37,160 --> 00:54:38,960
minority side, it's been very
surprising.

926
00:54:40,120 --> 00:54:44,000
And if you told me, hey, the the
Indians are going hard in

927
00:54:44,000 --> 00:54:48,480
Mozambique, where I believe they
both bought the Rio Riversdale

928
00:54:48,480 --> 00:54:54,360
assets and the Malatsi Volley
assets in the mid twenty 10s, I

929
00:54:54,360 --> 00:54:56,400
would imagine the Indians are
going to go very aggressive.

930
00:54:56,400 --> 00:54:58,520
They're trying to expand that
and optimise that.

931
00:55:00,080 --> 00:55:05,280
But yeah, this is a fun little
puzzle to solve.

932
00:55:06,800 --> 00:55:10,160
But I think everyone's willing
to comfortably underwrite a long

933
00:55:10,160 --> 00:55:11,520
term price that starts with the
two.

934
00:55:13,960 --> 00:55:17,240
Yeah, which that makes me, that
makes me pretty excited.

935
00:55:17,320 --> 00:55:21,280
I got to, I got to say the even
even after, you know, the, the

936
00:55:21,280 --> 00:55:23,440
boom of the last couple of
years, like we're, we're at this

937
00:55:23,440 --> 00:55:27,600
point in the cycle where these
outlandish things that koala,

938
00:55:27,600 --> 00:55:30,840
you and I were saying three
years ago in 2021 about how the

939
00:55:30,840 --> 00:55:33,960
long term price of medical
starts with the two are now

940
00:55:33,960 --> 00:55:36,560
manifest.
Like we're doing deals on these

941
00:55:36,560 --> 00:55:39,200
levels.
You're seeing deals that can

942
00:55:39,200 --> 00:55:43,680
imply, you know, the ability to
hit 300 on a regular basis.

943
00:55:44,440 --> 00:55:47,320
And I think that's, you know, at
least the snapshot of the future

944
00:55:47,320 --> 00:55:50,600
that we have now.
That's that's real, you know,

945
00:55:51,560 --> 00:55:55,160
and and that's what, you know,
Peabody saw when they went to go

946
00:55:55,160 --> 00:55:57,360
get these assets.
They don't control when these

947
00:55:57,360 --> 00:56:00,040
assets come up for sale.
They can only control their

948
00:56:00,040 --> 00:56:02,640
actions when they are for sale.
And if they?

949
00:56:02,800 --> 00:56:04,920
Yeah, I mean, what's left?
What's left BMA?

950
00:56:05,280 --> 00:56:06,560
What's left?
What's left?

951
00:56:07,280 --> 00:56:11,880
BMA is the only thing left and
then Ward, BMA and Warrior are

952
00:56:11,880 --> 00:56:15,680
the only things left.
In the US you have Medinvest

953
00:56:15,840 --> 00:56:20,920
Ukrainian owned company that.
Has but how many tonnes, Matt?

954
00:56:21,640 --> 00:56:24,400
But how many tonnes, Matt?
And yeah.

955
00:56:24,400 --> 00:56:27,680
So where's the move?
Where's the, where's the, the

956
00:56:27,680 --> 00:56:30,160
where's the Billy?
Where's the, where's the yard?

957
00:56:30,160 --> 00:56:36,040
The two yard deal?
It's BMA, it's Warrior.

958
00:56:36,840 --> 00:56:40,040
Or if we decide that we're going
to build a million more blast

959
00:56:40,040 --> 00:56:45,200
furnaces in Pennsylvania and
Ohio to cement that that

960
00:56:45,200 --> 00:56:49,840
Midwestern voting bloc, then
maybe we need AMR becomes much

961
00:56:49,840 --> 00:56:53,480
more strategic.
But there just isn't any more

962
00:56:53,480 --> 00:56:57,120
deals out there like this.
Like we've kind of had our M and

963
00:56:57,120 --> 00:57:00,320
A cycle come through for coke
and coal.

964
00:57:01,040 --> 00:57:02,600
Maybe there's one more left.
We'll see.

965
00:57:02,600 --> 00:57:06,360
I mean, shareholder rights plan
falls away and poison pill falls

966
00:57:06,360 --> 00:57:08,080
away.
May 2026 for Warrior.

967
00:57:08,080 --> 00:57:10,960
Not that the Walla has that date
circled at all.

968
00:57:13,040 --> 00:57:17,200
But yeah, I mean, at the end of
the day, Peabody paid up.

969
00:57:17,200 --> 00:57:18,920
I think they've been punished
accordingly.

970
00:57:19,560 --> 00:57:23,680
The five hundred, 600 million of
overpay has been taken off the

971
00:57:23,680 --> 00:57:27,280
share price.
And I think, like now, it's

972
00:57:27,280 --> 00:57:28,920
like, OK, now you guys have to
execute.

973
00:57:29,200 --> 00:57:30,800
If you don't execute, you're now
Leopard.

974
00:57:30,800 --> 00:57:32,400
And we have very serious
problems.

975
00:57:33,960 --> 00:57:37,920
But they've made their bet.
They, yeah, they did, they did.

976
00:57:37,920 --> 00:57:40,800
I was going to say the base
level of the business that they

977
00:57:40,800 --> 00:57:43,000
have.
So the the PRB assets, the US

978
00:57:43,000 --> 00:57:47,560
assets, the Australian assets
they already have X Anglo is

979
00:57:47,560 --> 00:57:50,760
somewhere between, you know,
free cash flow, not not EBITDA

980
00:57:50,880 --> 00:57:59,120
for 2025 and 26 is something
like 280 three, 100 million for

981
00:57:59,120 --> 00:58:01,200
25.
And then when Centurion fully

982
00:58:01,200 --> 00:58:11,520
comes online, call it 500 to
$550 million in, in 2026 at, at

983
00:58:11,520 --> 00:58:16,320
their currents were prices, you
know, it's spot, you know, maybe

984
00:58:16,320 --> 00:58:20,880
that number is more like 200 and
400, but but still, it's, you

985
00:58:20,880 --> 00:58:22,760
know, it's, it's not zero.
They are going to have a little

986
00:58:22,760 --> 00:58:26,640
bit of leeway to work with, you
know, should they have a little

987
00:58:26,640 --> 00:58:28,600
bit of growing pains here the
next few years.

988
00:58:29,360 --> 00:58:33,240
But you know, from a, from a
just a share price perspective

989
00:58:34,000 --> 00:58:36,360
in a, in a free cash flow
perspective like the next three,

990
00:58:37,000 --> 00:58:39,280
you know, you can sort of
pretend like this doesn't exist

991
00:58:39,280 --> 00:58:44,080
until they've proven that, you
know, they've proved that they

992
00:58:44,080 --> 00:58:47,200
can digest and operate the
assets and, and generate, you

993
00:58:47,200 --> 00:58:49,200
know, do the good old fashioned
blocking and tackling,

994
00:58:49,200 --> 00:58:51,600
generating free cash flow that
every good miner tries to do,

995
00:58:51,640 --> 00:58:53,640
you know.
Well, I mean, anyone who

996
00:58:53,640 --> 00:58:56,040
complained that Whitehaven shut
off the buy back to buy

997
00:58:56,040 --> 00:58:59,520
Blackwater and Donia or to go
back to 2021.

998
00:58:59,520 --> 00:59:06,560
And a former colleague said to
me, Koala Warrior is so stupid

999
00:59:06,560 --> 00:59:10,120
to build Blue Creek instead of
buying back stock that I want a

1000
00:59:10,120 --> 00:59:14,080
short Warrior against all my
other Coke and Cola longs

1001
00:59:14,080 --> 00:59:17,960
because this management team is
so stupid for trying to bring

1002
00:59:17,960 --> 00:59:21,080
supply into this market.
Blue Creek is 4 years away.

1003
00:59:21,080 --> 00:59:24,080
This is so stupid.
Koala, I just need you to

1004
00:59:24,080 --> 00:59:26,320
understand.
I do not want you to say that we

1005
00:59:26,320 --> 00:59:30,040
should just own Warrior because
in two years it's going to look

1006
00:59:30,040 --> 00:59:32,240
great.
Shocker of shockers.

1007
00:59:32,240 --> 00:59:33,840
It looked fabulous.
It looks fabulous.

1008
00:59:35,160 --> 00:59:38,960
That guy's also been to the mind
now and I've heard him say that

1009
00:59:38,960 --> 00:59:41,640
he thinks it's brilliant.
Shows you how short sighted the

1010
00:59:41,640 --> 00:59:44,640
market is.
But in a world where everyone

1011
00:59:44,640 --> 00:59:47,320
was livid about Blue Creek
because it was a pause on

1012
00:59:47,320 --> 00:59:50,920
capital returns, even though it
was funded from cash on balance

1013
00:59:50,920 --> 00:59:52,880
sheet and free cash flow
generation.

1014
00:59:53,880 --> 00:59:57,640
A world where people were mad at
at Whitehaven for showing me it

1015
00:59:57,640 --> 00:59:59,440
could grow through the
numerator, not growing the

1016
00:59:59,440 --> 01:00:02,680
numerator and not just shrinking
the denominator.

1017
01:00:03,600 --> 01:00:06,480
Peabody has now turned around
and said we're growing the

1018
01:00:06,480 --> 01:00:12,680
numerator, we're levering up.
Materially, and it's going to be

1019
01:00:12,680 --> 01:00:15,520
4 to five years, not three years
to the promised land.

1020
01:00:17,400 --> 01:00:19,520
So it's kind of, I was just
thinking about as you were

1021
01:00:19,520 --> 01:00:23,000
talking that we've gone from a
world where people are angry

1022
01:00:23,000 --> 01:00:26,440
about, well, we're pretty
conservative and pretty

1023
01:00:26,440 --> 01:00:30,920
reasonable decisions that within
a couple years look genius.

1024
01:00:31,880 --> 01:00:34,880
And the duration of these bets
are only getting longer as the

1025
01:00:34,880 --> 01:00:37,960
valuation on these deals have
gotten richer and richer.

1026
01:00:41,160 --> 01:00:45,160
Like, yeah, I mean, this is this
is where it's going.

1027
01:00:45,160 --> 01:00:48,640
I mean, you have to kind of now
say Peabody's a call on 20 on

1028
01:00:48,640 --> 01:00:54,320
perfect execution for the next 4
years starting in mid 2025 and

1029
01:00:54,320 --> 01:00:58,200
then 2030's coaching call.
Now in a private world, I think

1030
01:00:58,200 --> 01:00:59,960
that's a, that's a very
interesting deal.

1031
01:01:00,080 --> 01:01:01,640
We can quit more on the entry
price.

1032
01:01:02,360 --> 01:01:06,760
But I think if you believe that
green steel is not showing up

1033
01:01:06,760 --> 01:01:10,920
until the twenty 40s, twenty
50s, it's going to turn out to

1034
01:01:10,920 --> 01:01:15,600
age pretty nicely.
But I you can't screw up.

1035
01:01:15,720 --> 01:01:19,240
And if you do screw up, you got
to pray to God that that 300 to

1036
01:01:19,240 --> 01:01:23,800
500 million free cash flow is
enough to fund a QB 2 esque

1037
01:01:24,640 --> 01:01:30,080
blowout or delay or disaster.
If, God forbid, you put a step,

1038
01:01:30,080 --> 01:01:34,960
you put a foot wrong.
But yeah, that's right there.

1039
01:01:35,240 --> 01:01:39,480
As as Amy Edson said to me back
in May, there are no upside

1040
01:01:39,480 --> 01:01:43,880
surprises in Mining I.
Think that's a good place to to

1041
01:01:43,880 --> 01:01:45,320
leave it?
It feels like the first time in

1042
01:01:45,320 --> 01:01:47,960
maybe longer than a decade that
it's a good time to run a sale

1043
01:01:48,000 --> 01:01:52,040
process on a coal mine.
I, I can't believe it myself.

1044
01:01:52,600 --> 01:01:56,000
I'm, I'm still, I mean, out of
all the things that, that we've

1045
01:01:56,000 --> 01:01:58,720
talked about with regard to the
deal that, that the market has

1046
01:01:58,720 --> 01:02:01,000
talked about, that, that people
have complained about on

1047
01:02:01,000 --> 01:02:04,000
Twitter, that's the thing that I
keep coming back to is like,

1048
01:02:04,640 --> 01:02:07,680
regardless of what people really
think about the industry, like

1049
01:02:07,680 --> 01:02:12,880
we need, we need it.
And, you know, the, the, the,

1050
01:02:13,000 --> 01:02:16,200
the attitude of management over
the past, over the course of my

1051
01:02:16,200 --> 01:02:20,480
career has really shifted from,
you know, this sort of almost

1052
01:02:20,480 --> 01:02:24,600
antagonistic, you know, why
would you, you know, want us to

1053
01:02:24,600 --> 01:02:29,280
go away, you know, in indignant
sort of attitude toward, you

1054
01:02:29,280 --> 01:02:30,840
know what?
We're just going to go mine Cole

1055
01:02:30,920 --> 01:02:33,200
and and we're, we're, we're
going to help.

1056
01:02:33,840 --> 01:02:35,480
We're here to help you.
We know, we know you don't like

1057
01:02:35,480 --> 01:02:38,320
us, but you still need us.
And that's cool.

1058
01:02:38,480 --> 01:02:39,800
But we're just going to go do
our thing.

1059
01:02:40,120 --> 01:02:43,640
And and that is the best
possible way, at least in my

1060
01:02:43,640 --> 01:02:46,560
opinion, to actually go and, you
know, change hearts and minds

1061
01:02:46,560 --> 01:02:49,720
about the industry.
It's just to just to help, you

1062
01:02:49,720 --> 01:02:53,920
know, is, is in the US, you
know, to quote John Kennedy,

1063
01:02:53,920 --> 01:02:57,080
like, you know, that's not what
you can, that's not what your

1064
01:02:57,080 --> 01:02:59,160
country can do for you.
Ask what you can do for your

1065
01:02:59,160 --> 01:03:00,640
country.
I mean, you know, just taking

1066
01:03:00,640 --> 01:03:04,920
that attitude, you know, and,
and sticking to it from from a

1067
01:03:04,920 --> 01:03:07,920
leadership perspective, which is
a real transition that we've

1068
01:03:07,920 --> 01:03:11,440
seen to to me is really
heartening and, and tells you

1069
01:03:11,440 --> 01:03:14,840
that there's a lot of quality
people who are going to work in

1070
01:03:14,840 --> 01:03:16,600
this little industry that I love
so much.

1071
01:03:18,360 --> 01:03:20,880
I would just close with saying
that for the first time, for the

1072
01:03:20,880 --> 01:03:25,760
first time in a decade plus, if
BHP said we are going to sell

1073
01:03:25,760 --> 01:03:29,880
BMA for cash, which based on EVR
would be somewhere between 8:00

1074
01:03:29,880 --> 01:03:33,120
and $12 billion.
And we're going to use that cash

1075
01:03:33,760 --> 01:03:38,200
to fund the 12 to $14 billion of
capital we have to put into

1076
01:03:38,200 --> 01:03:42,880
Escondida and Chile just for our
South American copper business

1077
01:03:42,880 --> 01:03:46,040
to hold serve for the first time
in a decade.

1078
01:03:46,040 --> 01:03:51,120
I think their shareholders would
say no way in hell keep the coal

1079
01:03:51,120 --> 01:03:53,640
cash cow.
If we'd had that conversation

1080
01:03:53,640 --> 01:03:57,880
five years ago, they were said,
yes, great idea BHP, well done,

1081
01:03:57,880 --> 01:04:01,800
well done, get rid of bad coal.
I think today they would say now

1082
01:04:01,800 --> 01:04:06,040
why the hell would you do that?
And that's the sentiment shift

1083
01:04:06,040 --> 01:04:08,560
that's.
Right and that's the sort of

1084
01:04:08,560 --> 01:04:12,080
thing that makes me want to get
one of these hats and I just put

1085
01:04:12,080 --> 01:04:16,520
it on like this and kind of say,
you know what, it's a perfectly

1086
01:04:16,520 --> 01:04:19,240
fine time to wear.
This is my clean coal hat, by

1087
01:04:19,240 --> 01:04:21,160
the way.
It's all white and pristine.

1088
01:04:22,440 --> 01:04:26,120
You know, to put one of these on
as a card carrying liberal and

1089
01:04:26,960 --> 01:04:29,160
and sort of say to the world
like, hey, you know, like I

1090
01:04:29,160 --> 01:04:31,000
said, we're we're just here to
help.

1091
01:04:31,160 --> 01:04:35,080
And and we're going to carry
that attitude into the next into

1092
01:04:35,080 --> 01:04:39,000
the next decade, into the next
two decades and and try and be,

1093
01:04:39,480 --> 01:04:42,040
you know, as active part of
things as we can, you know, as

1094
01:04:42,040 --> 01:04:45,440
an industry across the world And
and, you know, shepherd,

1095
01:04:46,080 --> 01:04:48,040
shepherd goodwill everywhere
that we can.

1096
01:04:48,040 --> 01:04:51,440
The other person I've.
Seen wear a hat like that Matt

1097
01:04:51,560 --> 01:04:55,440
is Adam CRE insurance.
Is that right?

1098
01:04:55,600 --> 01:04:59,320
Shout out Adam.
I wish, I don't know why we

1099
01:04:59,320 --> 01:05:05,200
didn't for the your zoom picture
koala replace the K with AC just

1100
01:05:06,120 --> 01:05:07,240
koala.
Anyway we could do?

1101
01:05:08,800 --> 01:05:10,880
That in the post it.
Would have been pertinent for

1102
01:05:10,880 --> 01:05:13,880
this episode.
Maddie, I think this is our

1103
01:05:13,880 --> 01:05:16,400
record for the least number of
words you've said in a Money of

1104
01:05:16,400 --> 01:05:19,600
Mine episode since the beginning
of the podcast haha.

1105
01:05:20,280 --> 01:05:22,440
What's the point of me talking
when I got you here mate?

1106
01:05:22,800 --> 01:05:29,160
So.
Beautiful.

1107
01:05:29,160 --> 01:05:31,160
Well, thanks so much for joining
us on Blackout Wednesday.

1108
01:05:31,520 --> 01:05:33,840
I.
Yeah, well, I'm, I'm not really

1109
01:05:33,840 --> 01:05:36,040
blacked out.
I did bring, I did bring, you

1110
01:05:36,040 --> 01:05:39,920
know, a couple of bottles of, of
things to Polish off.

1111
01:05:39,920 --> 01:05:42,320
I figured, you know, with the
Peabody coal assets, we'll get

1112
01:05:42,320 --> 01:05:46,920
like, you know, some some old,
old really high quality, you

1113
01:05:46,920 --> 01:05:49,200
know, bottles to Polish off.
But we were talking so much I

1114
01:05:49,200 --> 01:05:51,640
didn't even get to touch it.
So no blackout for me.

1115
01:05:51,640 --> 01:05:55,080
It doesn't look like.
Thanks for making the time guys.

1116
01:05:55,080 --> 01:05:57,320
And I'm honest, and I'm honest,
Fresso.

1117
01:05:58,200 --> 01:06:00,520
Beautiful.
Cheers guys, pleasure as always,

1118
01:06:00,520 --> 01:06:01,720
happy.
Thanksgiving tomorrow.

1119
01:06:02,320 --> 01:06:03,400
Right.
Oh, there we go.

1120
01:06:05,120 --> 01:06:07,600
Fucking cheers.
You know when I know fuck all

1121
01:06:07,600 --> 01:06:11,440
about something?
I don't speak, but why I need

1122
01:06:11,440 --> 01:06:13,440
to.
What do you think, boys?

1123
01:06:14,760 --> 01:06:18,400
Mate, we, it's good getting
getting those two guys on.

1124
01:06:18,400 --> 01:06:21,040
I can just sort of sit back and
and coast and listen to a couple

1125
01:06:21,600 --> 01:06:25,240
sort of smart brains break it
down in a in a different style.

1126
01:06:25,240 --> 01:06:27,720
So.
Chatting probably about 3 hours

1127
01:06:27,720 --> 01:06:29,680
of research this morning
completely unnecessary.

1128
01:06:29,680 --> 01:06:32,280
We didn't need to do Yeah, I.
Didn't need to do any.

1129
01:06:32,320 --> 01:06:34,960
Of that was always official.
And we still, we still learned

1130
01:06:34,960 --> 01:06:38,000
plenty part Yeah, it was great.
It was interesting the the

1131
01:06:38,120 --> 01:06:41,760
aspect of what deals are
remaining considering what has

1132
01:06:41,760 --> 01:06:46,440
been done like Blackwater,
Dawnia, this one, all the other

1133
01:06:46,440 --> 01:06:48,840
ones, but it doesn't look like
there's many to go.

1134
01:06:48,840 --> 01:06:52,840
Unless do you think BHP would
divest BMI?

1135
01:06:53,200 --> 01:06:55,680
I heard while I say that, I
don't think so.

1136
01:06:55,880 --> 01:06:58,800
Yeah, I don't think so.
Interesting.

1137
01:06:58,840 --> 01:07:01,440
I didn't get the chance to sort
of wave it in, but I just read

1138
01:07:01,440 --> 01:07:04,720
right before in an article by
the Australian that Yankel had

1139
01:07:04,720 --> 01:07:09,560
actually bid more than Peabody.
Yeah, yeah, yeah.

1140
01:07:09,560 --> 01:07:11,840
Didn't get the chance to wave it
in there, but it was kind of an

1141
01:07:12,840 --> 01:07:17,000
interesting one to you know,
form an opinion on, on Yankel,

1142
01:07:17,000 --> 01:07:19,960
their management and how they
might approach M&A if they get

1143
01:07:19,960 --> 01:07:24,640
the opportunity to do any.
That didn't Hags originally saw

1144
01:07:24,760 --> 01:07:30,040
when the the the most logical
fit for all these Anglo assets

1145
01:07:30,040 --> 01:07:33,600
was in the BIBMI portfolio and
obviously now it's not.

1146
01:07:34,240 --> 01:07:40,000
That's not where it's gone.
So does that then create

1147
01:07:40,000 --> 01:07:44,760
something for Peabody to have
that logical consolidation later

1148
01:07:44,760 --> 01:07:46,800
on?
I think, I think the deal that

1149
01:07:46,920 --> 01:07:50,200
that the koala was alluding to
there for a future deal with

1150
01:07:50,200 --> 01:07:51,840
Peabody was actually a merger
with Whitehaven.

1151
01:07:52,960 --> 01:07:53,360
Yeah.
And.

1152
01:07:53,800 --> 01:07:57,120
Then they do it.
I don't, I don't, I don't think,

1153
01:07:57,280 --> 01:08:00,560
I don't think that BHP will
depart likeable part ways with

1154
01:08:00,560 --> 01:08:03,080
what what they've got there.
I think I think they'll own that

1155
01:08:03,080 --> 01:08:04,320
for a long time.
Yeah, yeah, A.

1156
01:08:07,680 --> 01:08:09,000
Couple of partners to thank I
reckon.

1157
01:08:09,560 --> 01:08:12,040
I was thinking these people that
own these companies are going to

1158
01:08:12,040 --> 01:08:14,200
own them for a long time too
because they're frigging awesome

1159
01:08:14,360 --> 01:08:17,120
Mineral mining services.
Based on all the polo shirts

1160
01:08:17,120 --> 01:08:19,279
everywhere, they're not down
anywhere anytime soon.

1161
01:08:19,600 --> 01:08:22,680
Grounded all the tally.
He's not going anywhere.

1162
01:08:23,399 --> 01:08:29,560
Lifelong Cecil Sicily owns
grounded forever effectively in

1163
01:08:29,720 --> 01:08:32,439
perpetuity.
Mates great friends cross

1164
01:08:32,439 --> 01:08:36,000
boundary energy give Timmy
Taylor cool just to say g'day if

1165
01:08:36,040 --> 01:08:38,560
anything.
Zambia ground support CR

1166
01:08:38,560 --> 01:08:42,479
insurance K drill dash SAP
Bloody good weekend money

1167
01:08:42,479 --> 01:08:44,479
miners.
Hodoroo, Hodoroo.

1168
01:08:45,520 --> 01:08:48,080
Information contained in this
episode of Money of Mine is of

1169
01:08:48,080 --> 01:08:50,160
general nature only and does not
take into account the

1170
01:08:50,160 --> 01:08:53,760
objectives, financial situation
or needs of any particular

1171
01:08:53,760 --> 01:08:55,800
person.
Before making any investment

1172
01:08:55,800 --> 01:08:58,840
decision, you should consult
with your financial advisor and

1173
01:08:58,840 --> 01:09:02,000
consider how appropriate the
advice is to your objectives,

1174
01:09:02,200 --> 01:09:04,200
financial situation and needs.