Australia's Whitehaven Coal wins vote in fight with tycoon

Thu Nov 1, 2012 1:11am EDT
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By James Regan

SYDNEY (Reuters) - Shareholders of Whitehaven Coal (WHC.AX: Quote) voted on Thursday to keep the company's board intact, refusing to join a drive by tycoon Nathan Tinkler to oust the chairman and independent directors at Australia's largest independent coal miner.

The battle reflects broader pressures in the Australian mining industry as it tries to deal with a drop-off in demand from major export market China after a decade-long boom.

Tinkler, who is Whitehaven's biggest shareholder with a 19.4 percent stake, has declared war on Whitehaven's management, blaming it for a halving of the company's share price since April, when it acquired Tinkler's Aston Resources.

Mining companies worldwide have watched profits tumble this year as industrial staples like coal, iron ore, nickel and copper are no longer lapped up by China.

Tens of billions of dollars of planned mining investments in Australia alone, earmarked by the likes of behemoths BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) and Rio Tinto (RIO.AX: Quote) (RIO.L: Quote), have been frozen or delayed. Costs to mine in Australia, industry executives say, have soared to among the highest in the world.

Tinkler, 36, was one of the success stories of the boom years, working his way up from a mine electrician to Australia's youngest billionaire in a few years after turning a A$1 million bet on an Australian coal deposit into a billion dollar fortune.

But most of Tinkler's wealth is tied up in his Whitehaven stake, worth about A$1.1 billion at its peak and now just A$600 million ($622.17 million), with creditors circling his stable of mining, sports and horse racing businesses.

Whitehaven Chairman Mark Vaile told shareholders there was little sign of a coal market rebound, nothing that benchmark prices had fallen to around $115 per tonne in the December quarter, from around $140 per tonne in the September quarter.   Continued...