Australian coal miners are experiencing a boost in their stock prices following an explosion at Anglo American’s coal mine, which temporarily halted operations. According to Bloomberg, Morgan Stanley predicts further gains, noting the mine’s significance as one of Australia’s largest metallurgical coal sites.
Anglo American reported a fire at its Grosvenor mine in Queensland earlier this week, resulting in its closure. The company anticipates the site could remain inactive for several months while safety checks are conducted for re-entry.
The surge in stock prices underscores coal’s ongoing importance as an energy resource, particularly in metallurgical applications, amidst the global shift towards alternative energy sources. Analysts at Morgan Stanley suggested that the incident could drive coking coal prices up by as much as 15% by year-end, tightening the coal market.
“We see a short-term opportunity in coking or met coal, especially following recent share price declines,” noted the analysts in a statement cited by Bloomberg.
However, for Anglo American, the incident represents a setback, impacting both production plans and its strategic efforts to divest its metallurgical coal business. This sale forms part of a broader restructuring initiative aimed at transforming the company, which also includes plans to sell or spin off its diamond, platinum, and nickel business units.