Xstrata claims Cumnock Coal

FACING an uncertain future due to the impending closure of its only mine, Cumnock Coal has become a wholly owned subsidiary of Xstrata-owned Helios Australia.

Staff Reporter

Under the deal, Helios paid Cumnock shareholders a cash payment of 57c per share.

Cumnock Coal's only source of coal production is from the opencut Cumnock No. 1 mine, in the Hunter Valley coal fields, which is due to cease mining next year.

"Besides rewarding Cumnock's shareholders, today's vote will enable Xstrata Coal to continue to consolidate its operations in the Hunter Valley while removing the administrative costs associated with managing a small publicly listed entity," Xstrata Coal chief executive Peter Coates said.

While the remaining resources at the site were unable to be extracted economically by Cumnock, Xstrata hopes higher coal prices, lower costs of production due to advances in technology and cost sharing could make mining viable in the future.

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