In January 2011, Pacific Rim thermal coal prices reached a high of $140 per metric ton. The hustlers gathered and placed big bets.
Ambre Energy from Australia bought mines with borrowed dollars and Arch Coal borrowed $5.1 billion to expand its holdings. They joined in a proposed coal terminal venture and waited for approval.
Chinese imports dropped drastically and continuously. The price of coal slid to $48 by January 2016.
Ambre had never made money since starting in 2005. Among other loans it had borrowed $140 million from a hedge/vulture fund (Resources Capital Funds-headquartered in the Cayman Islands for U.S. tax avoidance). Ambre was forced to sell RCF its U.S. properties including the terminal stake for $18 million or about 10 cents on the dollar. (Ambre has since gone out of business in Australia, leaving shareholders with nothing.)
Arch Coal has just filed for Chapter 11 bankruptcy – basically giving everything to the banks and investment houses that provided the $5.1 billion. Your bet on their stock in 2011 is worthless.
Maybe state Sen. Tim Sheldon can shift his weight behind a Texas company’s proposal for a refinery at Longview now that West Texas crude has dropped under $30 per barrel.