The company’s major shareholder, RJB Australia, will subscribe to about $53 million, which will be used to repay all debt owing to the RJB group. The remainder will be used to develop the Bowens Road North deposit, Duralie and to explore other opportunities in the coal industry.

CIM was one of the brightest rising stars in Australia’s coal industry in the mid-1990s. With its low start-up cost Stratford operation, north of Newcastle in New South Wales, and its Duralie deposit holding 22 million tonnes in proven resources, it was a favourite with punters and analysts alike.

Here was the “new age” miner they had only dreamt about – a company that would take the most cost effective methodologies and work practices of the Australian metalliferous mining sector and inject them into the poorly performing coal industry.

Despite a promising start, the bubble soon burst. Stratford turned out to be a difficult mine to exploit. RJB agreed to buy into the company, but after a disagreement over acquisitions managing director Michael Palmer resigned for “personal reasons”.

Then the onslaught of the Asian crisis and its negative effect on coal prices combined with poor hedging decisions to send CIM’s profits into an inexorable slide.

Production fell to 1.61Mt in fiscal 2000 from 1.77Mt the year before, and sales revenue to $63.9 million from $84.8 million.

A high debt level resulted in an interest cost of $3.7 million, but the impending $63 million rights issue should leave the company virtually debt free.

Foreign exchange hedges at 76.1c to the US dollar negated any benefit from the weak Australian dollar and were compounded by lower in prices of both coking and thermal coal.

However, CIM is more hopeful for the future with improved demand for Australian coking and thermal coal in Asia and lower production from Indonesia.

Stratford is also producing thermal coal by reprocessing previously discarded material, and Bowens Road North should be supplying the domestic thermal coal market from 2001.