* Mining magnate Nathan Tinkler seeking to seize control of
* Whitehaven MD says shareholder vote a mandate for the
* Company sees little sign of a market rebound
* Whitehaven shares have nearly halved in six months
(Updates with more comment from managing director, details)
By James Regan
SYDNEY, Nov 1 Shareholders of Whitehaven Coal
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 and Rio Tinto , 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.
Further discounts were being sought by buyers in secondary
markets, he added.
"It's tough out there," said Vaile, a former deputy prime
minister of Australia. "There is currently little sign of a
market rebound, although forward markets are showing improving
prices and there is the prospect of renewed demand growth from
China in early 2013."
Vaile and four other directors easily survived the attempt
by Tinkler, who did not attend the meeting in Sydney, to force
them off the board.
Tinkler told the Australian Financial Review if his push to
oust the board succeeded, he would install himself as chairman
alongside his own management team, who he said would be better
equipped to lead the company through the down cycle in coal.
"I've got far too much invested to stand by and watch this
thing continue to fail," Tinkler was quoted as saying in the
Australian Financial Review from his new home in Singapore.
Tinkler could not immediately be reached for comment on the
re-election of the board.
The tycoon attacked Whitehaven Managing Director Tony
Haggarty, saying cows on a farm owned by Haggarty "see more of
him than his management team".
After the vote, Haggarty said a "clear mandate" had been
delivered for the board to focus on its strategies to improve
Whitehaven's fortunes amid sliding coal price.
"The only suggestion I could give Nathan Tinkler is to get
his own house in order and leave the running of Whitehaven to
those with the experience and qualifications to do so," Haggarty
said to applause from shareholders.
Shareholders had sent Tinkler a clear message, Haggarty
"They have delivered the existing board and management team
a clear mandate to focus on delivering Whitehaven's clearly
MAULES CREEK PROJECT
Tinkler's stake in Whitehaven was acquired after it took
over two companies he controlled, Aston Resources and Boardwalk
Resources, in a $2.5 billion deal in April.
He failed to secure funding for a $5.5 billion bid to take
Whitehaven private in August and last week wrote to the board
seeking to be released from an agreement that prevented him from
acquiring additional shares in the company.
Tinkler also used an open letter to shareholders, published
on Wednesday, to criticise delays to production at the company's
Maules Creek project.
Vaile said the company planned to bring the project into
production as quickly as possible and "our clear objective is to
be producing coal by Q1 2014."
Whitehaven warned last week after prodding by Tinkler that
its profits could slide this year if coal prices weaken.
Tinkler had sought confirmation that the company's outlook
for earnings before interest, tax, depreciation and amortization
was close to the market consensus of A$188 million, which the
company did say was in line with its current projections.
Whitehaven warned, however, that if coal prices stay as weak
as they are now, EBITDA for the year to June 2013 could slide to
Whitehaven shares are now trading just below A$3.00, down
from more than $6 in April.
($1 = 0.9644 Australian dollars)
(Writing by Jane Wardell; Editing by Ed Davies)