The below graph tells you all you need to know about export coal prices. International coal prices are finally in their death throes as China stops building massive new coal plants as they try and get pollution under control. China will be the world leader in renewable energy in a few short years, mark these words. Perhaps India might still be able to save international coal prices as they import huge amounts of SA coal still. However, even India is focusing more on renewables as they also battle to get their own coal production sorted out (India has far larger coal reserves than SA)....
Of course in SA we have Eskom to help out the local coal miners. Eskom is becoming the darling client of all coal producers, even though Eskom only pays around R280 per tonne whilst export prices are currently around R480 per tonne Free on Truck at mine. Also, with Eskom you can get a sales yield of around 90 to 100% whilst with export coal you only get around 60% yield. Then of course there is the local industrial market (for sugar mills, paper mills, cement mills etc.) and they are paying around R750 per tonne FOT mine for high grade coal. But that is a very small specialised market controlled completely by Wescoal now with their acquisition of Macphail. Most of these guys want to move to cheaper natgas anyway.
Buy coal shares at your peril now. I can't see the coal price ever getting back to a level which makes any sense for the deeper level mining which is now required. Waterberg? Forget it. Eskom only. Glencore is the most exposed to world coal prices and this year should see them getting a hiding from the market. Sorry Ivan, you had your day in the 90's and 2000's....
P.S. I co-founded globalcoal.com and traded international physical coal for a living from around 2006 to 2012.
