Case Study: Powercoal Pty Ltd
Doubling Shareholder Value in Four Years
About Powercoal Pty Ltd
Business Overview
The Powercoal state owned coal mines operated in a highly competitive coal and electricity generation environment. The mature underground mines were constrained by capital investment and were decreasing in value.
The Motivation
To Maximise Sale Value
To maximize value received from the planned sale of the state owned and operated coal mines.
The Solution
Strategies to Improve Productivity and Grow the Business Profitably
Our EAB Director was engaged by Powercoal Managing Director over a four year period in strategic planning and deployment including documenting board submissions and presentations for both the Powercoal Board and its parent company Pacific Power Board to grow the business profitably including:
- Strategies for re-aligning business units to the prevailing market conditions to realise their inherent profit potential.
- Strategies to improve productivity and profitability of mature assets to secure the value of the current business.
- Strategies for staged development of the $170m Mandalong Mine development at a time when capital was constrained.
- Development of presentations to the Board and the NSW Government on the exploration of a new previously unknown coal deposit; now discovered as the Anvil Hill open cut resource suitable for a large scale open cut development. This is the largest coal discovery in NSW for 100 years and is now owned and operated by Glencore as a 13mtpa open cut mine named Mangoola.
The Result
Doubling Shareholder Value
The success of these strategic initiatives was realized in the acquisition of Powercoal by Centennial Coal for $331m in 2002.
“Bede’s support was a critical success factor during a very turbulent period and it is gratifying to note that the strategic initiatives we initiated have been continued by Centennial Coal as adding value to their portfolio and increasing their shareholder value.”