Cyprus Amax takes final bow

Staff Reporter

The long-anticipated exit of American group Cyprus Amax from Australia's coal sector has finally happened, bringing to an end another chapter in the restructuring of the domestic coal scene. New Cyprus Amax owner, Phelps Dodge, announced the sale of the New South Wales assets to Glencore International subsidiary, Glencore Coal Australia, for $150 million in March.

Included in the deal is a 50% stake in the Springvale underground coal mine and a 47.96% interest in Oakbridge Pty Ltd. The Oakbridge assets include 90% of the Bulga open cut and underground mines, 95% of the Baal Bone open cut and underground mines and 100% of the Running Stream resource.

Last year Glencore bought the Pasminco coal assets for $70 million and a suite of collieries from insurer HIH for $140 million. Its also owns the NSW Mt Owen operations. Following the latest purchase, Glencore Coal Australia had amassed annual managed tonnage of nearly 26 million tonnes.

Managing director of Glencore Coal Australia, Peter Coates, said it was an exciting time for a company which has grown very rapidly in the past two years but dismissed as "speculation" rumours that Glencore was considering selling off some of the assets to Centennial Coal Company. "We work well with Centennial on the Cook joint venture and we will continue to work well with them," Coates said.

Meanwhile, a consortium led by Centennial was named the exclusive preferred bidder for Samsung Corp's 50% stake in the Springvale colliery. The consortium includes SK Corp of Korea and Korea Resources Corp.

Springvale is attractive because of its strategic location to Mt Piper Power Station to which it supplies 2Mt of coal per annum. The mine's contract to the power station has 14 years remaining.

Coates said the immediate focus for Glencore would be to put in place satisfactory financial and operating performances. "Our priority is to establish a proper management structure to run the mines in the way we see fit."

The burgeoning asset base has necessitated the development of new corporate roles. These have been filled by the following: Ian Cribb assumes the role of general manager underground; Toby Bradbury, general manager open cut operations; and Glen Robinson, technical services manager. Val Istomin holds the position of general manager major projects.

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