Glencore finds a Donkin buyer

GLENCORE will finally exit the Donkin underground coal project in Canada’s Nova Scotia province under a deal with US coal investor, the Cline Group.

Blair Price

Miner Xstrata wanted to divest its 75% stake of the project in 2012 – a year before its merger with commodities trader Glencore.

The project’s other partner, Morien Resources Corporation (25%), revealed the deal with Cline in an announcement this week.

“The Cline Group has a strong reputation as a high quality mine developer and operator,” Morien CEO John Budreski said.

“Their development experience in both continuous miner and longwall mining and growing market exposure for similar quality product to the Donkin mine provide great synergy.

“Cline and Morien will now work with all stakeholders to ensure conditions are met to bring this arrangement to a successful conclusion. We look forward to entering a new phase of the Donkin project with a new, high quality partner.”

Donkin is expected to produce about 3.6 million tonnes annually, probably from longwall and continuous miner operations, for a projected 30-year lifespan.

Cline’s underground coal exposure is through its stake of New York-listed longwall miner Foresight Energy.

The project received approval from Nova Scotia Environment Minister Sterling Belliveau five weeks ago.

No payment amounts were revealed for the Donkin deal.