Coal-terminal foe casts doubt on builder’s finances
An Australian company seeking to build two coal export terminals has piled up big losses and carries a large load of debt, according to a report by a Seattle think tank opposed to the terminals.
Seattle Times staff reporter
An Australian company seeking to build two Pacific Northwest coal export terminals at a cost of more than $800 million has yet to show a profit while piling up a large load of debt, according to a report released Wednesday by Seattle-based Sightline Institute.
The report by Sightline, which opposes the terminals, examines the finances of Ambre Energy, from its 2005 launch — with a focus on turning coal into gas and hydrocarbon liquids — to its current efforts to develop two Northwest coal terminals. One would be in Longview. A smaller terminal would allow the shipping of western coal by rail to Port of Morrow in Oregon, and then barge it down river to be loaded for export to Asia.
“What we found so striking ... is the remarkable range of warning signs and red flags that the financial statements raise,” said Clark Williams-Derry of Sightline, the author of the report.
For the fiscal years 2006 through 2012, Ambre accrued losses of more than $128 million, while bringing in less than $7 million in revenue, according to the Sightline report. The company recently disclosed a $10.9 million loss on a coal project in Australia.
In the United States the company faces hundreds of millions of dollars in reclamation, site cleanup, pension and other costs, according to the Sightline report.
An Ambre spokeswoman, Liz Fuller, said that it is not uncommon for a company to show losses early on when they invest in developing a project. Ambre will make money once exports begin, she said.
“This type of negativity from an anti-coal organization is not unexpected,” said a company statement, which accused Sightline of indulging in “corporate character assassination.”
During the last three months, Fuller says Ambre has raised $25 million in private equity and has support for the Longview export terminal from Arch Coal Inc., a major U.S. coal producer.
Sightline Institute is an environmental research group that focuses on sustainability issues.
Alan Durning, who founded Sightline in1993 said: “... if you read what we have been writing about this, you would say that we are opposed to building coal export terminals in the Northwest. Our analysis is that they are a bad deal for us.”
Ambre’s two export terminals are part of a broader group of controversial proposals to develop Northwest coal export terminals, including a plan for a major new facility at Cherry Point near Bellingham.
Proponents embrace the coal ports as an important economic boost for the region. Opponents cite a range of concerns including how the burning of coal contributes to global warming and the impacts of increased train traffic through the region.
Sightline, in its report, tags Ambre as a company with deeply troubled finances.
The report notes a 2012 statement in the company’s annual report by an independent auditor, Grant Thornton, that said if planned funding or alternative sources of revenue did not come through, “ ... there exists significant uncertainty whether Ambre Energy Limited and its controlled entities would be able to continue as a going concern ...”
Ambre’s spokeswoman, Fuller, said that audits — like stock offerings — are required to look at all barriers to success and that the same statement had been included in three consecutive audits.
Hal Bernton: 206-464-2581 or firstname.lastname@example.org