Image Source: Bowditch EarthMoving
A long-established NSW mining and earth moving equipment company has entered receivership after being hit hard by the ills currently besetting the Australian coal mining sector.
Bowditch & Partners Earthmoving has operated for over two decades out of Muswellbrook in NSW’s Hunter Valley, the centre of the state’s coal mining industry.
The mining equipment mainstay has been devastated, however, by weakness in the coal sector, with many miners dialling down their operations.
Morgan Kelly of accounting firm Ferrier Hodgson has been appointed as a receiver to the company. He hopes to sell the business as a going concern once cash flow for the company has stabilized.
Newspapers featured advertisements for Bowditch this week, emphasizing in particular the opportunity for investors to get their hands on a “diverse fleet” of earthmoving and mining equipment, an established customer base and an experienced workforce.
In a statement, Kelly said Bowditch had collapsed as a result of cyclical movements in the coal sector but expected interest in the company from investors.
“Events such as this receivership are a natural part of the cycle. We anticipate there will be a demand for these assets and the business,” he said.
Despite a brisk recovery in economic growth from chief coal importer China, spot prices have slumped and Australian coal miners have been hard hit as a result.
Brisbane-based energy producer and port operator New Hope Corporation recently announced a decline in profits of over 31 per cent for the first half of the 2013 financial year.
Average revenue per tonne of thermal coal sold fell 8.1 per cent as a result of both the lofty Aussie dollar and plunging coal prices.
International mining giants Xstrata and Rio Tinto have also slashed jobs in Australia as a result of weakness in the coal sector. Rio has cut around 100 coal jobs in a bid to cut costs, while Xstrata has shut its Brisbane office at the expense of about 100 of its own staff.
Analysts noted that despite a robust revival in production among Chinese steelmakers, prices for coking coal have slumped on weak demand from the US and EU as a result of austerity measures. Slack demand from OECD countries has thus permitted China to place greater downward pressure on price levels.