LG bidding for Wilkie Ck: report

SOUTH Korean industrial conglomerate LG is reportedly bidding for Peabody Energy’s Wilkie Creek thermal coal mine in Queensland and is believed to be willing to pay up to $700 million.
LG bidding for Wilkie Ck: report LG bidding for Wilkie Ck: report LG bidding for Wilkie Ck: report LG bidding for Wilkie Ck: report LG bidding for Wilkie Ck: report

Wilkie Creek location courtesy of Peabody Energy

Lou Caruana

In a sign of the growing attraction of the Australian coal mining sector to Korean companies, the Wall Street Journal reported LG is expected to increase its footprint beyond the 15% stake it acquired in the Ensham coal mine in Queensland last October.

Korean companies are keen to shore up supply of coal as traditional rivals Japan as well as China and India increasingly lock in supply agreements.

This week Indian steel giant Jindal Steel & Power forged a partnership with Gujarat NRE Coking Coal and the Japanese Mitsui Matsushima International signed a $40 million preliminary agreement with NuCoal Resources to jointly develop the Doyles Creek underground coal project in NSW and ensure the supply of coal to its Japanese customers following the Fukushima nuclear disaster.

Fellow Korean company POSCO has a 70% stake in Cockatoo Coal’s Hume coal exploration project in the Southern Highlands of New South Wales.

Peabody decided to divest Wilkie Creek because it felt that it did not fit into its portfolio of Australian assets which now include the operations of Macarthur Coal, which it acquired this year for $4.9 billion.

Wilkie Creek, which is in the Surat Basin, is near New Hope’s New Acland mine, has a resource of over 500 million tonnes and 2Mtpa of coal production.

There is some speculation that a cashed-up New Hope may also make a bid for Wilkie Creek as it has been frustrated in its plans to expand New Acland because of local opposition and ongoing discussions with the new coordinator general of Queensland.

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