the australian

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http://www.theaustralian.com.au/business/wall-street-journal/newmont-mining-finds-two-suitors-for-coal-tenements/story-fnay3vxj-1226260664300

Newmont Mining finds two suitors for coal tenements

by: David Winning
From: The Wall Street Journal
February 02, 2012 12:00PM

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GOLD miner Newmont Mining is putting a final polish to the sale of its Queensland coal assets, with two overseas suitors vying for a resource estimated at more than 1.2 billion tonnes of thermal coal.

Newmont is in advanced talks with two parties interested in buying the undeveloped Felton East/West and Lochbar/Bringalily South tenements in the Clarence-Moreton Basin, a person familiar with the matter told Deal Journal Australia.

Newmont - the world’s second-largest gold miner by output after Barrick Gold - hopes to conclude a deal within the first half of the year.

Newmont's tenements in the Clarence-Moreton Basin lie about 10km from a rail line with access to Gladstone and Brisbane, and contain thermal coal that could be developed for export if capacity at either port becomes available.

The bituminous coal is low in sulphur, and has an energy content of about 6000 kilocalories per kilogram after washing. Thermal coal is chiefly used to generate electricity.

As reported by Dow Jones Newswires in August 2011, Newmont (based in Colorado, US) appointed ANZ Group to find a buyer for its non-core coal assets Down Under.

A successful sale would provide a fillip for other companies with promising, but undeveloped, coal assets on the market, which have been largely overlooked by overseas buyers favouring acquisitions of producing mines.

Rey Resources on Monday said discussions were continuing with Australian and overseas parties interested in taking a stake in its Duchess Paradise project in Western Australia.
The miner appointed Gryphon Partners, a unit of UK-listed Standard Chartered, in 2011 to sell a minority stake in the project that could produce up to 2.5 tonnes of thermal coal annually from 2013.

Bandanna Energy said last week it was assessing a non-binding offer to take a stake in a coal project in Queensland's Bowen Basin, after allowing several parties, including South Korea's Samtan Co, to carry out due diligence. It followed a move to scrap a formal strategic review process, which ran through last year.

Intensifying interest in undeveloped coal deposits reflects the rapid thinning of the ranks of small and mid-cap Australian coal producers, following a rush of M&A activity in 2011.
These included Peabody Energy’s $4.9 billion takeover of Macarthur Coal and a joint offer by Mitsubishi and Rio Tinto to take full control of Coal & Allied Industries, which valued Australia's sixth-largest coal miner by output at $10.6bn.

The remaining six ASX-listed pure coal producers - New Hope, Gloucester Coal, Whitehaven Coal, Aquila Resources, Gujarat NRE Coking Coal and Cockatoo Coal - accounted for less than 5 per cent of Australia's total 2011 output.

New Hope is running a formal sales process currently, while Whitehaven Coal aims to combine with Aston Resources to become a dominant producer in the Gunnedah Basin of NSW. Late in 2011, Gloucester Coal agreed to combine with most of the Australian assets of China's Yanzhou Coal Mining.