Wesfarmers hunting for coal buyers

PERTH (miningweekly.com) – ASX-listed conglomerate Wesfarmers on Wednesday confirmed that it was evaluating "strategic options" for its coal assets.

The company, which is better known for its retail businesses, was responding to reports that it had launched a A$2-billion sale of its Curragh and Bengalla mines, in Queensland and New South Wales, respectively.

Wesfarmers said it was evaluating its options for the coal operations with a view to maximising shareholder value.

“Wesfarmers is continuing to consider a broad range of options, from operational to divestment initiatives, including recently seeking expressions of interest from external parties who may want to acquire the coal assets,” the company said.

However, it cautioned that there was no certainty that the process would lead to a transaction. 

The Curragh mine produces around 12-million tonnes a year of metallurgical coal and steaming coal, while the Bengalla mine, in which Wesfarmers owns 40%, is capable of producing around nine-million tonnes a year of thermal coal.

Rio Tinto in March exited the Bengalla joint venture, selling its 40% interest in the mine to New Hope Corporation for $616.7-million.

Metallurgical coal prices have doubled in the last year and thermal coal has almost doubled since July.