NEMI holds 17% interest in the Peace River Coal partnership which operates the Trend metallurgical coal mine in British Columbia, Canada.

Aviva’s main assets are the Coolimba power project in Western Australia and the Mmamantswe thermal coal project in Botswana.

The merger will take place through an Aviva scheme of arrangement in Australia, with Aviva shareholders to receive 0.59 NEMI shares for each Aviva share held.

The companies will have 50:50 ownership of the new entity and the board will comprise three representatives from each company.

These will include NEMI president and chief executive officer Pat Devlin as executive chairman and Aviva chief executive officer Lindsay Reed as president and chief executive officer.

The merged company will keep its primary listing on the Toronto Stock Exchange and apply for listings on the Australian Securities Exchange and Botswana Stock Exchange, where Aviva is listed.

The two companies have a current combined cash balance of around $C25 million ($A30.5 million)

“We’re well positioned from a cash point of view and we have a good growth pipeline to take us forward,” Reed said today during a conference call.

“We also have strong balance sheets enabling us to undertake the development work on our power developments, which actually don’t require a lot more work from where we’ve got them to now to get them to the capital commitment stage,” he said.

“We’re well insulated in the current environment and when the current environment turns around – and it will – we’re even better positioned to take advantage of the growth.”

The merger is expected to be voted on by shareholders of both companies in January, with the final transaction expected to be completed in February.