Seems as though the chatter about the coal mine purchase is in very early stage talks, the main thing being talks.
By GILLIAN TAN SYDNEY—Australia's Linc Energy LNC.AU -11.17%is in early stage talks to acquire a coal mine jointly owned by BHP Billiton Ltd. BHP.AU -1.12%and Mitsubishi Corp., 8058.TO -0.41%people familiar with the matter said.
Negotiations over a deal for the Gregory Crinum coking coal complex in Australia's Queensland state marks the latest step in BHP's move to cut costs by selling smaller or unprofitable assets.
The BHP Billiton Mitsubishi Alliance, known as BMA, shut the open-cut Gregory mine last year because it was no longer profitable due to falling prices, high mining costs and a strong Australian dollar. The companies later packaged the mine with the nearby Crinum underground mine and hired UBS AG UBSN.VX -2.22%to find a buyer.
Gregory Crinum has 8.3 million metric tons of coal and mining is forecast to continue for four more years, according to BHP's annual report.
Brisbane-based Linc has focused on the development of cleaner transport fuels in recent years, but retains a portfolio of undeveloped coal assets in Australia that includes the Teresa deposit in Queensland.
BHP said in February it would be unlikely to make any decision to proceed with the sale of Gregory Crinum until the second half of this year.
LNC Price at posting:
82.5¢ Sentiment: ST Buy Disclosure: Held
