on deal journal australia

i dont know if this has been posted before. On the 4th last paragraph Bandanna is mentioned.

FEBRUARY 14, 2012, 5:35 PM
Xstrata Hires Macquarie to Sell 20% Stake In Wandoan
DEAL JOURNAL AUSTRALIA

By David Winning

Mining giant Xstrata is close to approving construction of its 6 billion Australian dollars (US$6.4 billion) Wandoan project in Queensland, and it wants a new investor to come along for the ride.

A logo of the Swiss mining company Xstrata is pictured at its headquaters in Zug, February 6, 2012.
Xstrata has appointed Macquarie Capital to advise on the sale of a 20% interest in the Wandoan project in Queensland, as it awaits a land court ruling that will go a long way to determine whether its mining license application succeeds, a person familiar with the matter told Deal Journal Australia.

A deal would see Xstrata retain majority control of the project, which initially aims to produce 22 million tons of thermal coal annually for use in power generation, rising to 63 million tons later.

The Anglo-Swiss miner owns 75% of Wandoan, with Japan’s Itochu and Sumitomo sharing the remaining interest.

Codenamed “Project Thatcher”, the sales process also includes offering potential suitors offtake rights for up to 12.6 million tons of coal from the project in the Surat Basin in southeast Queensland, the person said.

However, it isn’t known if Xstrata’s proposed combination with commodities trader Glencore to create an integrated mining giant with a market value above US$80 billion will affect the terms of any deal involving Wandoan, including the rights to market the coal.

An Xstrata spokesman said the company and its current partners “are investigating options for the project’s development, including the potential to introduce an additional partner.”

Asian buyers are continuing to circle Australian thermal coal assets as they look to secure fuel supply for power plants at home, while Western miners are seeking greater access to reserves that can be developed for export.

According to an International Energy Agency report in November, global coal demand is set to rise by 60% between 2009 and 2035 even though countries are taking firmer action on tackling climate change and rolling out incentives for greater renewable energy use.

M&A activity is being driven largely by China’s emergence as a swing consumer of coal. China was a net exporter of coal until the end of 2008, but has considered capping domestic production as it worries about using up its reserves too quickly.

Last year, the country tapped seaborne markets for 182.4 million tons of coal to overtake Japan as the world’s largest coal importer.

This surge in imports since 2009 has prompted overseas companies—especially from India, Korea and Japan—to bid more aggressively for coal assets in Australia.

India’s GVK Group acquired a 79% stake in the Alpha coal project in Queensland’s relatively undeveloped Galilee Basin from Hancock Prospecting for US$1.26 billion in one of the sector’s biggest deals last year. Indian peers Lanco Infratech and Adani Group have also invested heavily in Australian acquisitions.

Xstrata isn’t the only miner seeking to take advantage of this rising interest in Australian coal assets.

Deal Journal Australia reported Jan. 25 that Peabody Energy has hired UBS to find a buyer for its Wilkie Creek coal mine in Australia, which analysts value at more than A$700 million.

ASX-listed Bandanna Energy has also received a non-binding offer to take a stake in an undeveloped coal project in Queensland’s Bowen Basin after allowing several parties, including South Korea’s Samtan, to carry out due diligence.

Xstrata is currently awaiting a ruling by the Queensland Land Court on whether it will be granted a mining license for Wandoan, enabling construction of the mine to begin.

The court heard last year that several objections had been lodged against the mining license application, including in relation to the management of greenhouse gas emissions associated with mining and subsequent burning of coal.

Xstrata already has conditional federal government environmental approval for Wandoan, and previously said it consulted with the local community and addressed key issues extensively in its environmental impact statements. Wandoan will generate up to 1,300 new jobs, better infrastructure, government royalties and boost local businesses, the company added.