Cobbora conundrum

THE depressed coal market is leading to expectations that the New South Wales government’s underway efforts to sell the Cobbora thermal coal project will only attract bargain hunters.
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Cobbora project location.

Blair Price

“As the coal price continues to drop, we are going to see more activities because a lot of coal miners will need money and become takeover targets,” an industry source told The Australian.

“There could also be interest (in Cobbora) because they think they can pick it up cheaply from the NSW government.”

Expressions of interest from selected initial bidders for the $1 billion-plus project were received last month.

“It is believed that at least five parties are in the process now, but no names have been revealed so far,” the newspaper reported.

“Banking sources have suggested that Whitehaven Coal and China’s Yanzhou Coal Mining could be among them, however neither company was available for comment.”

The open cut project near Dunedoo in Central West NSW is targeting 220 million tonnes of thermal coal production over a 27-year mine life and was initially designed to supply subsidised coal to state-owned power stations.

In August, NSW Treasurer Andrew Constance said the previous Labor government’s Cobbora plans had exposed taxpayers to a liability of more than $1.5 billion in development and operation costs.

“The NSW Liberals and Nationals government has made clear from day one that the state should not be in the business of running a coal mine,” Constance said.

“The launch of the transaction process for the Cobbora site is another step in cleaning up the fiscal mess left by Labor and its failed energy reforms.”

The Cobbora project, which aims to mine up to 20 million tonnes per annum over the next 21 years, is expected to create more than 1100 construction and operational jobs.

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