Effective from the start of the year, the acquisition involved purchasing Resource Capital Fund’s 35% share and SADA’s 23% share, to add to Excel’s existing 42% share of SouthCoal. SouthCoal, through subsidiary Helensburgh Coal, owns and operates the Metropolitan coking coal longwall.

Excel said the change in ownership did not mean any operational changes, and Excel would continue to focus on consolidating Metropolitan’s position as a reliable, competitive supplier.

“Global demand for high quality hard coking coal is currently very strong and is expected to remain so for the foreseeable future. There are limited sources of supply around the world and Metropolitan is well placed with substantial coal reserves and resources of over 70 million tonnes in its existing leases,” Excel said in a statement this week.

The company said it believed there were opportunities to increase Metropolitan’s saleable production from the current level of 1.3Mtpa.

Excel said the acquisition was a major step in consolidating ownership of the company’s major assets. Excel now has majority ownership and management control of each of its three operating coal mines (Wambo 75%, Metropolitan 100% and Chain Valley 72%) and holds 100% of the new Wilpinjong opencut development near Mudgee, which is expected to begin supplying coal to Macquarie Generation in early 2007.

Excel currently produces around 5Mtpa of saleable coal in NSW from its three operating mines. Following the SouthCoal acquisition, Excel’s equity share is now 4Mtpa.

The company expects production to increase to 10Mtpa over the next few years through the expansion of existing mines and the development of the Wilpinjong mine.

The acquisition of SouthCoal from Resource Capital Fund and SADA involved a combination of cash and Excel ordinary shares. As a result of the share issue to RCF, which is an existing Excel shareholder, RCF will increase its ownership of Excel to approximately 10% and Ian Burvill, RCF’s senior Australian representative, will join the Excel board.

SADA will become an Excel shareholder with approximately 5% of the company. SADA’s coal preparation and handling contract at Metropolitan has also been extended for a further four years.

Debt funding and ongoing working capital requirements of Excel and its subsidiaries has been provided by SG Australia and Standard Bank London.