2nd UPDATE: Anglo American Sells Australian Coal Assets
July 05 2010 - 11:50AM
Dow Jones News
Anglo American PLC (AAL.LN) said Monday it has agreed to sell
its stakes in five undeveloped coal assets in Australia for roughly
$500 million to a consortium of companies including state-run Korea
Electric Power Corp. (015760.SE).
The conditional agreement with Korea Electrical, or Kepco,
Korean steel producer Posco (005490.SE) and Australia's Cockatoo
Coal Ltd. (COK.AU) is for A$580 million in cash and covers the
Bylong and Sutton Forest coal deposits in New South Wales and the
Collingwood, Ownaview and Taroom open-cut deposits in Queensland.
Anglo's stake in each is 51% and Mitsui & Co.'s (8031.TO)
49%.
The London-based company said it expects the deal to be
completed in the fourth quarter, subject to regulatory and other
approvals. Mitsui has preemptive rights over the Queensland assets,
it said.
Kepco separately said it has agreed to buy full control of the
Bylong assets for 403 million Australian dollars (US$338 million),
which will double its coal self-sufficiency ratio to 24% and
propels it into supplier status.
The company said it plans to start producing at Bylong in 2016,
and eventually produce 7.5 million metric tons a year.
A Kepco official said that the company was among 70 bidders for
the five assets Anglo American put up for sale.
Posco, Korea's largest steel producer by sales, said it and
Cockatoo will jointly buy 100% of Anglo American's smaller Sutton
Forest asset.
In a statement, it said it had agreed to pay A$50 million for a
70% stake in Sutton Forest, while Cockatoo will buy the remainder.
It didn't specify the total value of the deal although Kepco said
in its own statement the deal was worth A$72 million.
Greg Germon, head of investor relations at Cockatoo Coal, wasn't
immediately available for comment.
State-owned Korean energy companies, including Kepco, invested a
combined $4.5 billion last year in overseas resources companies and
energy development projects, bringing total spending over the past
10 years to $9.48 billion as part of their efforts to secure stable
supply of energy sources.
Kepco said Cockatoo had won a bid to buy a 51% stake in Ownaview
and two other mines from Anglo American for a combined A$105
million, Kepco said.
Kepco said it will allow Cockatoo to run Bylong and also give
the Australian company an option to buy 30% of the mine in three
years. Kepco said it will in return take over the 51% stake in
Ownaview from Cockatoo.
Anglo American said the five coal assets have an estimated
attributable resource of 847 million tons.
Goldman Sachs JBWere advised Anglo American on the sales
process.
-By In-Soo Nam and Robb M. Stewart, Dow Jones Newswires;
822-3700-1902; In-Soo.Nam@dowjones.com,
robb.stewart@dowjones.com
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