The Aurizon Holdings Ltd (ASX: AZJ) share price has struggled through 2021 and one expert is predicting it might be in for more trouble in the new year.
The rail freight operator moves around half the country's coal exports. It hauled 202 million tonnes of the commodity in financial year 2021.
But with big banks turning away from coal, the head of Australian equities at Tyndall, Brad Potter, believes the cost of capital could soon increase for the haulage company.
At the time of writing, the Aurizon share price is $3.44, 0.15% higher than its previous close. For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.21% right now.
Let's take a look at Potter's prediction for the future of the rail freight operator's shares.
Aurizon share price could suffer alongside coal in 2022
Potter recently told Livewire he believes the coal industry will begin to struggle in the coming years, and Aurizon won't be immune to the pain.
Livewire quoted Potter as saying:
In our view, companies such as Aurizon Holdings that own and operate coal haulage operations in both Queensland and New South Wales are likely to have availability of funding reduced, and they are also likely to find asset owners excluding them from their investable universe.
Even if Aurizon manages to dodge the potential carnage, a spin away from the commodity by super funds will likely reduce the availability of equity.
Additionally, Potter said Australian banks are beginning to turn their backs on coal, potentially leaving companies digging for the black rock looking internationally for funding.
Challenges for coal producers could impact the Aurizon share price as the company's income is largely dependent on the commodity. In its most recent financial year results, it reported a drop in volumes across its coal network substantially impacted its finances.
The Aurizon share price has been suffering lately. It has fallen around 12% since the start of 2021. However, it has gained around 2% over the past month.
