Former Aussie coal magnate stages major comeback with $150m acquisition

Nathan Tinkler, the Australian electrician turned mining entrepreneur, has made a surprise return to the coal market buying Peabody Energy’s (NYSE:BTU) Wilkie Creek mine in Queensland in a $150 million deal.

The acquisition, reports The Australian, will be funded via equity from the 38-year-old tycoon and with the support of investment bank Leucadia and Jefferies, a US investment lender.

The move comes almost two years after the collapse of a multibillion-dollar bid for Tinkler’s Whitehaven Coal (ASX:WHC), once the country’s largest independent coal producer by market value.

Tinkler shot to fame after he and his partner brought in $1 million to put his foot on the Middlemount coal deposit in Queensland in 2006. Borrowing the rest of the $30 million purchase price, Tinkler sold Middlemount to Macarthur Coal just a year later and got over $440 million in cash.

Not long after, Tinkler pulled off the same trick. In 2009 he borrowed heavily to buy the Maules Creek deposit in New South Wales from Rio Tinto for $480 million, which later sold for $1.2bn in 2010.

The former billionaire, listed for years as the richest man in Australia under 40, is the kind of person most Australians would love to love —a big young man of humble origins who loves football, horses and fast cars, and who was able to quickly make a fortune. Yet, Tinkler is possibly one of the least trusted men in corporate Australia.

His strategy of borrowing to buy and flip undeveloped coal projects, which worked so well in a booming market, left him over-geared when coal prices slumped in 2012.

"You would need a psychiatrist to understand Nathan," a former senior executive at one of Tinkler's businesses told Four Corners last year.

Tinkler, who acknowledged he had been through a tough couple of years, said he had learned his lessons. Now his most immediate plan is to put Wilkie Creek, which has approval to produce 2.5 million tonnes of coal, back into production by the end of the year.