Coal shares why has ATU lagged?

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Question asked 26/03/2022

Coal shares why has ATU lagged?

Hello James and all. Thanks for your tips on WHC as that MM tip has worked out very nicely for me. Can you please explain why Atrum Coal ARU has not enjoyed the same lift in the share price as WHC. In fact it has lagged badly. What are the longer term prospects for ATU? Is it a buy, a hold or a sell? Thank you

Answer

Thanks Rob,

Atrum Coal (ATU) is a very different proposition to Whitehaven (WHC) which is producing Coal and benefitting from the high coal price. ATU has mines in Alberta Canada and early in 2021 the Alberta government re-instated the 1976 Coal Policy which prohibits open-cut mining which means there is now a high chance that Atrum’s coal tenements in Alberta can never be developed and the shares are relatively worthless.

On the other hand, Atrum Coal is sitting on what is arguably one of the best undeveloped coking coal assets in the world and could be worth more than US$1b if it is developed. There are legal proceedings happening and the outcomes will dictate whether ATU has a future, or not. This one is akin to game of two up.

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Atrum Coa (ATU)

LAST UPDATED 25/03/2022 17:44

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