THE Cobbora coal project may attract bidders looking for cheap coal assets amid depressed market conditions, with the NSW government expecting to close the sale within this year, reporting by DataRoom has found.
The NSW government has opened the data room to several interested parties, after receiving expressions of interest for the project in early September.
It is believed that at least five parties are in the process now, but no names have been revealed so far. Banking sources have suggested that Whitehaven Coal and China’s Yanzhou Coal Mining could be among them, however neither company was available for comment.
Earlier this year, Yanzhou ditched a plan to buy out the minority 22 per cent stake in its local arm Yancoal Australia. But debt-laden Yancoal, on its own, is not in a position to make acquisitions after ongoing losses.
The market conditions are definitely not ideal to sell coal assets, as an oversupply in the market and a slowdown by key buyers such as China are increasing pressure on coal prices.
But an industry source said now could also be an opportunity for buyers looking to pick up cheap assets as part of their longer-term plans.
“As the coal price continues to drop, we are going to see more activities because a lot of coal miners will need money and become takeover targets,” the source said.
“There could also be interest (in Cobbora) because they think they can pick it up cheaply from the NSW government.”
The NSW government flagged its plan to sell or lease the Cobbora mine development in July 2013, and asked for expressions of interest in August this year. The project is estimated to contain at least 140 million tonnes of thermal coal, and mine development and local infrastructure plans are all in place to proceed with the project, the government said.
The project was initiated by the previous Labor government to provide subsidised coal to the state-owned power generators, but the supply contracts were terminated when other generators, including Macquarie Generation, were sold.
It would take at least $1.5 billion to develop and operate the mine, the government said.
Maggie Lu Yueyang and Prashant Mehra |
Business Spectator |
October 02, 2014 3:33PM
