aoe cashed up and on the hunt, page-34

Intereting article today on another cashed up coal miner with interests in CSG selling its AOE shares and on the acquisition look out.

smh.com.au
Gloucester looks good to cashed-up miner
Jamie Freed
March 25, 2009

THE chairman of the Queensland coalminer New Hope, Robert Millner, said his company was looking to put some of its $2.6 billion of cash towards acquisitions in the sector.

When asked whether his company would consider buying the NSW miner Gloucester Coal, which has received a bid from its largest shareholder, Noble Group, he told the Herald: "Yes, we would."

New Hope failed in its previous attempt to crack the NSW market when Xstrata won a bidding war for the underground miner Resource Pacific last year.

Like Resource Pacific, Gloucester would add coking coal to New Hope's portfolio of thermal coalmines.

"We've got our ears and eyes open at the moment, looking at options," Mr Millner said. "We are in a very strong position. We can move tomorrow if we need to."

New Hope plans to return to its shareholders in November $600 million of the proceeds from its sale last year of the New Saraji coking coal project to the BHP Billiton Mitsubishi Alliance. The rest will be available for acquisitions, taxes and internal growth projects.

The miner yesterday reported a 143 per cent rise in first-half operating profit, to $78.8 million, which does not include the interest received on its big bank balance. It retained its previous guidance of a full-year operating profit of $125 million to $150 million, with production of 4.8 million tonnes expected.

Unlike some of its rivals, which have experienced softer demand for thermal coal in recent weeks due to lower industrial output in Japan, Taiwan and Korea, New Hope has been able to sell all of its production.

"A lot of it comes back to us having our own port," Mr Millner said, referring to the Queensland Bulk Handling operations at the port of Brisbane.

He said a Chinese customer had recently inquired about the possibility of signing a long-term contract.

Only about 1 per cent of Australia's coal is shipped to China, which has traditionally been a net exporter of the product, but demand from China appears to have picked up in recent weeks because its domestic prices remain high.

New Hope owns a 17 per cent stake in the Queensland coal-seam gas producer Arrow Energy, on which it had an unrealised gain of $145.2 million as of the end of January.

Mr Millner said New Hope intended to keep the stake for the time being. When asked whether anyone had expressed interest in buying the holding, he said: "Not lately. We haven't been out hawking it either."

New Hope declared a fully franked interim dividend of 4.75c a share.