Citic Resources: Macarthur Coal Remains Long-Term Investment
May 05 2010 - 6:03AM
Dow Jones News
Citic Resources Holdings Ltd. (1205.HK) said Wednesday its stake
in Australian coal miner Macarthur Coal Ltd. (MCC.AU) remains a
long-term investment for the company, despite the Australian
government's proposed new tax on the mining sector.
"Australia's proposed resources tax will have an impact on
mining firms," Chief Executive Sun Xinguo told reporters in Hong
Kong after a shareholders meeting. "We will find out the impact on
our business after examining more of the details of the tax plans,"
he said.
Citic Resources and state-run parent Citic Group are the largest
shareholders in Macarthur Coal, the world's biggest exporter of
pulverized coal by volume, with a combined stake of 22.4%.
Citic Resources' shares are down 13% this week as investors
factored in lower earnings for its Australian investment after the
Australia government said Sunday it planned to introduce a 40% tax
on the mining industry's profits. The benchmark Hang Seng Index is
down 3.7% this week.
The company's shares ended down 3.6% at HK$1.62 Wednesday,
compared with a 2.1% decline on the benchmark index.
Asked whether Citic Resources will support Peabody Energy
Corp.'s (BTU) takeover bid for Macarthur Coal, Sun said the company
has nothing to add to the statement it made last month, in which it
said it hadn't yet decided whether to back the bid.
U.S. coal company Peabody Energy sweetened its takeover offer
for Macarthur Coal to A$4.07 billion in April but investors are
concerned it may now try to lower the price after Australia
proposed the new mining taxes.
Peabody, the world's dominant producer of coal for use in blast
furnaces, told Macarthur this week it was working through the
impact of the tax plans on its bid for Australia's biggest coal
exporter.
Citic Resources also operates an aluminum smelter in Australia,
and produces manganese in China's Guangxi province and in Gabon,
West Africa.
-By Yvonne Lee, Dow Jones Newswires; 852-2802-7002;
yvonne.lee@dowjones.com
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