Macarthur Coal Takeover Could Trigger Noble Group Mine Purchase
September 05 2011 - 3:12AM
Dow Jones News
Peabody Energy Corp. (BTU) and ArcelorMittal's (MT) takeover bid
for Macarthur Coal Ltd. (MCC.AU) could trigger a sale of the
miner's stake in the Monto thermal coal project to commodity trader
Noble Group Ltd. (N21.SG), according to a target statement from
Macarthur released Monday.
Peabody and ArcelorMittal last month secured the support of
Macarthur's board for its A$16-a-share cash offer, which values the
Brisbane-based company at A$4.83 billion. Macarthur is the world's
largest producer of pulverized coking coal, a low-cost variety of
coal used in steelmaking, by volume.
Located in Queensland state, Monto is the second-biggest coal
resource in Macarthur's portfolio after the West Rolleston deposit.
Monto has 328.4 million metric tons of coal resources, with
Macarthur's share amounting to 134.6 million tons of that
total.
Such a sale would add to Hong Kong-based Noble's growing
portfolio of Australian coal assets, mostly now held indirectly
through its 63%-controlled Gloucester Coal Ltd. (GCL.AU).
Gloucester's current resources amount to 340 million tons,
according to its preliminary annual report last month.
Monto could produce 1 million tons a year of thermal coal from
around 2015, with capital spending estimated at A$80 million,
according to Queensland's state government. Macarthur considers the
project--which was halted in 2003 and is embroiled in a court
battle between its joint venture owners--to be under
evaluation.
Macarthur and Noble hold a controlling 51% stake in the mine
through their joint venture, Monto Coal 2. Macarthur's target
statement says a successful takeover by Peabody and ArcelorMittal
would give Noble the option, but not the obligation, to buy
Macarthur's 80.39% share in Monto Coal 2 at fair market value.
The junior partners in the Monto mine, a series of trusts, have
brought legal action against Macarthur and Monto Coal 2 over the
decision to stop work on the mine in 2003 and are seeking damages
of A$1.19 billion.
A spokesman for Noble said he wasn't immediately able to
comment.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com
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