Two Rich Listers make billions from Qld coal

The company was holding a lot of cash and paying out a high rate of dividends as banks were reluctant to lend to coal projects, he added. “We’re the bad guys now. The banks won’t fund coal projects any more.”

Jellinbah paid $450 million in dividends earlier this year, along with a $300 million final dividend and a $150 million special dividend last month.

Mr Chong, who also has a considerable property portfolio in Brisbane, was Australia’s 72nd-wealthiest person this year with a fortune of $1.9 billion, up 69 per cent, according to the Financial Review Rich List. Jellinbah paid $1.7 billion in dividends in the previous financial year, the accounts show. If the most recent financial data is taken into consideration, Mr Chong’s wealth is forecast to have increased to around $2.9 billion.

But the lower dividends came as revenues dropped from $4 billion to $3.4 billion for the financial year to the end of June. “This result was primarily driven by lower coal prices,” Mr Chong wrote in the company’s accounts.

The Russian invasion of Ukraine – and the subsequent sanctions placed on Moscow – have created a jump in coal prices. The Jellinbah earnings remain significantly ahead of previous years, including the 2021 financial year, when the company reported a profit of $240 million.

Mr Chong is not the only wealthy Queensland businessman to benefit from higher coal prices. Chris Wallin, a coal baron who operates QCoal, was the recipient of a $575 million payday, separate accounts lodged with the corporate regulator this week show. That compared with dividends of $150 million in the previous year, for the 12 months to the end of June 2022.

That included a dividend of $375 million in the 12 months to June 30, and an additional $200 million in the months that followed. QCoal, which operates the coking and thermal coal mines in the Bowen Basin, booked revenues of $987 million in the last year, up from $856 million. Higher costs meant profits fell from $582 million to $445 million.

“Every company we look at is flush with cash,” Rory Simington, Wood Mackenzie Asia Pacific coal analyst, said. “As a general trend companies are…doing share buybacks or dividends or investing in non coal areas of their business.”

Taking his ownership of QCoal and the dividends into account, Mr Wallin would have a fortune of around $2 billion, putting him among the wealthiest 60 people on the Financial Review Rich List.

Thermal coal prices have continued to come off last year’s highs, with Newcastle port prices falling to a 52-week low of $US121 per tonne this week. The latest lows mark a distinct collapse in the price of futures at the port, which shot up to a record high above $US400 per tonne in September last year, after the Russia-Ukraine war sparked a Europe-wide energy crisis.

Morgan Stanley analysts led by the investment bank’s commodities strategist, Amy Gower, expect import demand for thermal coal to remain strong, despite the recent dips. “We envisage more price support emerging, especially when current coal inventories are worked off further,” she said.

Prices for coking coal, which is used in steelmaking, have fared better. After a fall in June caused by China’s embattled property sector casting a shadow on the steelmaking industry, coking coal futures in Singapore have rallied to above $US350 per tonne amid strong demand from India, Japan and China.

“We don’t see demand for metallurgical coal falling off a cliff any time soon,” said Morningstar commodities analyst Jon Mills. “Resilient demand and restricted supply is keeping prices high.”

Demand from India and China was also unlikely to drop and low-carbon steel was not right around the corner, Mr Mills added. “None of the green steel technology is economic, and I would suggest it’s not going to happen for decades.” BHP has previously warned that the production of environmentally friendly steel on an industrial scale was “decades away”.