WCL 0.00% 39.5¢ westside corporation limited

why is anglo american selling dawson?

  1. 615 Posts.
    With all the talk about how cheap the Dawson acquisition is, I was curious as to why Anglo American would sell such an asset for an apparently cheap price? WCL makes it clear that they are picking up Dawson for a very cheap price. Based on what I have found researching Anglo American and their operations, it appears that Anglo American don't seem interested in getting into the Coal Seam Gas (CSG) space. This can be seen as a positive and/or negative.

    Positive aspect is that they might be selling Dawson because it doesn't fit with where they want to be. This gives me some comfort that Westside isn't acquiring a dud asset.

    The negative aspect surrounds the question as to why Anglo American doesn't want to be in the CSG space? Could it be that CSG isn't all that great? Could it be that CSG isn't the place to be? Are there some inherent problems or inefficiencies with CSG? There are some comparisons out there between CSG and Underground Coal Gasification (UCG) and even though UCG is in its infancy, UCG does seem to have some major advantages over CSG. I am not suggesting the UCG is superior to CSG but I am concerned as to the long-term success of CSG. I dont think anyone wants to invest money in an obsolete process/technology.

    I am happy to hear opinions and to be corrected about any information/opinion within this post.
 
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