Newpac leases sold to Xstrata

IT WILL be business as usual for Newpac No. 1 colliery operator Resource Pacific despite the sale this week of the Newpac mining leases by Iluka Resources to corporate predator Xstrata Coal for $A15.3 million.
Newpac leases sold to Xstrata Newpac leases sold to Xstrata Newpac leases sold to Xstrata Newpac leases sold to Xstrata Newpac leases sold to Xstrata

Newpac No. 1 colliery

Angie Tomlinson

The mining leases that comprised the Newpac coal resource in New South Wales’ Hunter Valley was owned by Iluka’s 93.3% subsidiary Ashton Coal. In turn they were sub-leased by Resource Pacific.

Resource Pacific managing director Paul Jury told International Longwall News the sale meant “absolutely nothing” to Resource Pacific, except it would now pay royalties to Xstrata instead of Ashton.

“We have a perpetual sub-lease which is pretty watertight so it (the sale) will have no impact on us, just business as usual,” he said.

For Iluka, the sale has been on the cards for some time, with the company in talks with Xstrata over the past few months.

“The proceeds from the sale of Iluka’s interests in the Nardell Colliery are part of the company’s planned second half asset sales and are included in the recently provided 2005 full year net profit after tax guidance of $A130-140 million,” Iluka managing director Mike Folwell said.

The colliery has endured an uneven past but has held strong since a consortium led by Paul Jury bought the mine from Macquarie Bank for $A5.671 million in September 2003. Jury was managing director of the Hunter Valley mine until he resigned in April after Macquarie put the mine in receivership.

The mine was re-opened in April 2004 and seven months later Resource Pacific announced it would raise $A44 million under an initial public offer to expand production at the Newpac bord and pillar operation, with further investment in longwall mining.

In 2005 a $A65 million capital raising lifted the company's market capitalisation to more than $A100 million and longwall development remains on schedule for start-up in January 2007.

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