The transaction, which is expected to be completed by the end of April 2004, increases Xstrata Coal’s shareholding in Cook Colliery from 50% to 95% inclusive of management rights. Tokyo Boeki Limited continues to hold the remaining 5%.

The underground bord and pillar operation near Blackwater in Queensland’s Bowen Basin produces approximately 500,000 tonnes per annum, over 50% of which is hard coking coal with thermal coal the remainder. Cook’s coal resources include 128Mt of measured and indicated resources, with a further 750Mt of inferred resources.

For Xstrata the deal increases its exposure to coking coal, in line with the company’s strategic intent, said Peter Coates, chief executive Xstrata Coal.

“…the scale and potential of Cook’s resources is therefore of particular interest,” he added. “We intend to leverage this opportunity as soon as practicable, and will commence on lease exploration in the latter half of this year.”

Xstrata said the transaction is expected to have a positive impact on earnings.

From Centennial’s point of view the sale is regarded as a strategic divestment and necessary to allow management to concentrate on the rapidly expanding NSW operations.

“Focus will also continue on our two NSW development projects - Mandalong which is scheduled to commence mining in January 2005, and our Anvil Hill open cut project in the Hunter Valley,” said Centennial’s managing director Bob Cameron.