Royalty Holder……..Jefferies Group
Revenue……………..…..…………..$2.9m
Mine Life...……………..…24 years plus
Commodity………………..Coking Coal
Operator………..Peabody & Yancoal

#18 Middlemount

From race horses and football clubs to brown envelopes of cash, coal baron Nathan Tinkler has seen his ups and downs.

The deal that vaulted him from coal mine electrician to billionaire coal boss was on the Middlemount deposit in Queensland. Tinkler paid $1m for the tenement in 2006, selling it a year later to his business idol Ken Talbot for $265m.

As well as a remarkable eye for an overlooked coal deposit, Tinkler's deals, it later transpired, were built on massive leverage. When the house of cards came down, his 75 per cent share of a $1 per tonne royalty over Middlemount passed to US investment bank Jefferies, which was "seeking a passive income asset," according to a Tinkler spokesman.

Jefferies had lent Tinkler money and Middlemount has never lived-up to its billing of 3.8m tonnes per annum, but with a 24 year reserve base, the mine has plenty of time.

25 per cent of the royalty is still owned by former Tinkler associate Matthew Higgins, whilst a separate 4 per cent royalty over Middlemount was shunted from Hong Kong-based trading group Noble to China's Yancoal, the mine's co-owner.

 

 

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