Mitsubishi accepts Yancoal’s bid for Coal & Allied stake

PERTH (miningweekly.com) – ASX-listed Yancoal’s bid for Coal & Allied has received a boost with project partner Mitsubishi Development accepting the Chinese firm’s offer for its 32.4% interest in the Hunter Valley operations joint venture for $710-million.

Diversified miner Glencore this week made a surprise $2.5-billion rival bid for mining major Rio Tinto’s Coal & Allied subsidiary, also offering Mitsubishi $920-million for its interest in the Hunter Valley operations, as well as its 28.898% interest in the Warkworth joint venture, subject to Rio accepting its offer for Coal & Allied.

The Glencore bid rivalled Yancoal’s earlier $2.45-billion offer for Coal & Allied, which it made in January.

Yancoal said on Tuesday that Mitsubishi had also agreed to grant the ASX-listed company a call option over its interest in the Warkworth operation for $230-million.

Mitsubishi previously accepted Glencore's $920-million proposal for its joint venture interests, meaning the company has now agreed to sell its stake in the assets to whichever party was successful in acquiring the Coal & Allied assets, be it either Yancoal or Glencore.

Meanwhile, Yancoal also reached agreement for Mitsubishi to provide exclusive agency arrangements for thermal coal sales to Japanese power utilities.

Yancoal has acknowledged the rival bid from Glencore, noting that it had a right to match or better the proposal if Rio considered the Glencore offer to be superior.

Yancoal’s offer for Coal & Allied has been approved by Chinese regulatory authorities, as well as by the Australian Foreign Investment Review Board.