Met Coal and Thermal Coal For all the folks on this board who are discussing power generation I think they are missing the largest, most crucial point of this whole conversation.
Take a look at WTN, GCE, CMK. These are Met coal plays, not Thermal coal plays. Using met coal for power generation is like taking tenderloin and turning it into hamburger. It's like using the finest champagne for baking.
Met coal is one of the worlds scarcest resources. It is absolutely critical for steel making. It is absolutely critical for the oncoming age of green where we use high speed rail lines, nuclear reactors and electric cars. It is irreplaceable for the urbanization happening in Asia. It is crucial to build the ships that make the world a wealthier and happier place.
It is not the heat in the coal that is so important to refine the iron ore. It is the carbon. This is the part that cannot be replaced.
Met coal sells for over $200/ tonne right now. Thermal coal sells for $65. When Xstrata announced they were changing the focus to Met coal the stock price went up 20% or so, and a fair chunk of that was me.
When will Cape Breton and Halifax figure it out that they are sitting on a massive economic resource? The locals I hear are talking about power generation still. Oh well. Time will rationalize the price.
But do yourself a favour and study the difference. Without knowing the difference there is no way anyone should be investing in this stock.
Go luck to all. I can't wait for the PFS. This Harper announcement is the icing on the cake.