Dividends and How 8 teens and a nun could change coal’s future

Australia is the world’s largest exporter of coking coal used to make steel and the world’s second biggest in thermal coal for power generation and industry. The Australian economy is heavily dependent on the export of commodities which Australia has many. Those in government are biased towards the commodity industries.

In that context, the Federal Court of Australia made the ruling in a class action suit brought by 8 teenagers, aged between 14 and 17 and an 86 year old nun acting as their litigation guardian. The ruling says the Minister of Environment must take into account how children would be harmed considering climate change when deciding to approve a coal mine expansion.

The Minister and the company said, that can work within the ruling of the court, the company saying most of the coal it was going to mine from its expansion is high quality coal.

Linking to dividend paying stocks, whenever there is commodity boom and prices rise, owning stocks in the commodity business are a good thing because the increased prices tend to mean profits which means dividends and stock buybacks. When prices decrease, it would not be a good thing to own them because cost cutting is the order of the day. If you do own commodity based investments, ride the boom and then seek alternatives to ensure you have locked in capital gains.

There are more questions than answers, till the next time – to raising questions.

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