2011 Media Releases

Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB) is continuing to expand its research universe in the resources sector initiating coverage of Coal & Allied (ASX: CNA) with a Buy recommendation.

Coal & Allied offers exposure to thermal and semi-soft coal, operating mines in the Hunter Valley and exporting out of Newcastle NSW. Rio Tinto holds a 76% stake in the company.

Research analyst Brendan Fitzpatrick said, “Being a Rio Tinto subsidiary means there is the parent company’s scale and expertise to draw upon; however Rio’s stake also greatly reduces liquidity. We see CNA as a quality exposure to commodities that have positive price profiles.”

Deutsche Bank believes that CNA is in a strong financial position with negligible debt. Fitzpatrick also believes the company has the ability to self-fund the anticipated development of the Mt Pleasant operation and expansion of the current projects.

In addition, the commercial framework which has been negotiated over the last few years by industry participants facilitating the expansion of port capacities will significantly reduce the existing infrastructure bottlenecks. Fitzpatrick believes that “given the operating mines already have installed capacity and plan expansion to take consolidated output from 25Mtpa currently to 43 Mtpa over the next six years, the delivery of increased rail and port capacity is critical to potential sales volumes being realised”.

The initiation of Coal & Allied brings the number of stocks covered in the resources sector to 42 covering mining, gold, energy, oil and gas companies. 

For further information, please contact:

Deutsche Bank AG    
Name : Amy King  
Phone: +61 (0) 2 8258 2505
E-Mail: amy.king@db.com