An unlikely resurgence in the price of coal could deliver an $US18 billion ($A23.6bn) boost to the four big mining groups listed in London.
Despite falling foul of increasingly stringent environmental regulations around the world, the unfashionable fuel has rebounded spectacularly this year, making it one of the best-performing commodities.
The leap in prices is on a similar scale to that after the Fukushima nuclear incident in 2011, which took place when China’s boom was in full flow. The rise in prices is down to the vagaries of Chinese policy. Beijing has ordered mines to cut back on production, which sent import prices soaring.
Few, if any, mining executives saw the move coming, but the price rise since the start of the year could deliver an $US18 billion boost to their revenue on the basis of the production forecasts for BHP Billiton (BHP), Rio Tinto (RIO), Glencore and Anglo American.
The biggest leap has been in coking, or metallurgical coal, which is used to make steel. Coking coal prices have risen from $US78 a tonne to $US243 a tonne, according to the Steel Index. The price of thermal coal, used in power stations, is up 50 per cent.
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