Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Met Coal Mania Mounts

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

As spring fever spreads like wildflowers across the northern hemisphere, the fever down under is a different kind of affliction altogether.

Met coal mania has spread quickly from the core of demand emanating from China and India, to the most coveted supplies trapped inside of Australia's richest ores.

This strengthening, global secular bull market for coal has triggered an outbreak of consolidation and fast-tracked development initiatives that continue to drive what I consider some of the most compelling investment opportunities of the decade.

While momentum has recently returned in dramatic fashion, I see the roots of this bull market cycle in the pre-crisis run-up that saw the Market Vectors Coal ETF (NYSE: KOL  ) surge above $60 per share before a panic-driven correction caught hold. Along with the ETF's constituent stocks -- led by CONSOL Energy (NYSE: CNX  ) -- coal shares have yet to recapture those pre-crisis heights.

Despite the depth of the ensuing correction, the long-term indicators for sustained coal demand never faltered, and even near the height of the panic I argued that Chinese demand would spark a healthy rebound. Also, India's role in fueling this demand must not be overlooked. Equipment maker Joy Global (Nasdaq: JOYG  ) pointed out last month that India's demand for imported coals will grow far faster than previously anticipated after Coal India reduced guidance for domestic production.

Returning our Foolish gaze to Australia, we find ample corroboration that this bull market continues to gather steam. Peabody Energy (NYSE: BTU  ) recently raised its bid for Australian coking coal miner Macarthur Coal to $3.3 billion, which also has a $3.5 billion all-stock offer from Australia's New Hope to consider. Amid swirling speculation regarding a possible bid from Swiss miner XSTRATA, complications from a separate deal pending with Macarthur, and the conflicting interests of some heavy-hitting stakeholders, I give Peabody's effort to acquire Macarthur slim chances of success beneath the $4 billion mark. Steelmakers POSCO (NYSE: PKX  ) and ArcelorMittal (NYSE: MT  ) hold major stakes in Macarthur, and are likely to exert considerable influence over the process.

With Macarthur still in play, and the outcome uncertain, Peabody tossed another ball onto the court by announcing a possible deal forthcoming with Coal India. Although the company provided little detail, an Australian newspaper reports that Coal India may purchase stakes in a quartet of Peabody's Aussie mines and some additional international assets ... all for about $1 billion. Is Peabody monetizing assets to raise capital for a twice-sweetened Macarthur bid? That's hard to say, but Fools are encouraged to stay tuned for additional developments in the fast-moving world of Pan-Asian seaborne coal.

The "Coal" tag in the Motley Fool CAPS community lists 29 companies. Find out what other investors are saying about the stocks you're watching, or share your Foolish thoughts with us. CAPS is free and fun!

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly in the CAPS community under the user name TMFSinchiruna. He tweets. He owns shares of Peabody Energy. POSCO is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool's disclosure policy just smiles and gives you a vegemite sandwich.

Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1152932, ~/Articles/ArticleHandler.aspx, 10/24/2016 8:02:07 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 3:59 PM
BTUUQ $16.07 Up +5.48 +51.75%
Peabody Energy Cor… CAPS Rating: *
CNX $16.79 Down -0.62 -3.56%
CONSOL Energy CAPS Rating: ***
JOY $27.90 Up +0.01 +0.04%
Joy Global CAPS Rating: ****
KOL $13.04 Up +0.04 +0.31%
Market Vectors Coa… CAPS Rating: ****
MT $6.77 Up +0.09 +1.35%
ArcelorMittal CAPS Rating: ***
PKX $53.73 Up +0.31 +0.58%
POSCO (ADR) CAPS Rating: ****