oxrzfx eyes csm industry

From the AUSTRALIAN today:

Merged Oxiana-Zinifex eyes coal seam gas
Matt Chambers | June 18, 2008

IN an attempt to stave off surging energy costs, the combined Oxiana-Zinifex could look at grabbing a slice of Queensland's booming coal seam gas industry, the head of the new company says.

Zinifex chief executive Andrew Michelmore, who will be head of a merged company to be called OZ Minerals, says he is keen to hedge energy costs at Century -- the world's second-biggest zinc mine, near Mount Isa.

"We would be interested in locking up supply" of CSG in Queensland as a part-owner of assets, Mr Michelmore said yesterday in an interview. He said OZ had no plans to become active in CSG exploration or getting into production itself, which were areas outside its expertise.

Zinifex shareholders voted last Monday to merge with Oxiana to form OZ, which would have a market value of $9 billion and was formed partly to enable bigger acquisitions than either company could make on its own.

Oxiana shareholders do not need to vote on the deal, but can vote down the name change next month. The merger is expected to be sanctioned by the courts on Friday.

Mr Michelmore said he was looking to make OZ a "leader in mid-caps" globally, which would mean growing the value of the company to more than $20 billion.

OZ, with $1.2 billion cash in the bank, has flagged acquisitions worth up to $3 billion and will look at base metals, where it is already heavily entrenched, as well as bulk commodities such as iron ore, and energy assets including coal, uranium and natural gas.

Indonesian thermal coal assets were also an area of interest, Mr Michelmore said, again pointing to the urge to hedge energy costs at nearby operations.