Final bids in for Whitehaven

PEABODY Energy, China’s Yanzhou Coal Mining and Indian conglomerate Aditya Birla are reportedly in contention to acquire Whitehaven Coal, with an outcome expected in the coming weeks.
Final bids in for Whitehaven Final bids in for Whitehaven Final bids in for Whitehaven Final bids in for Whitehaven Final bids in for Whitehaven

Narrabri North mine, image courtesy of Whitehaven.

Blair Price

All three companies have previously been linked to the bidding process for the Gunnedah Basin miner. The Australian Financial Review reported that the preferred bidder could be revealed by the end of April.

While Aditya does not have any coal mines in Australia, it is a major cement producer and is India’s second-largest producer of carbon black, which is commonly used in tyre manufacturing.

Yanzhou already has a strong coal mining presence in Australia after completing its acquisition of Felix Resources in early 2010.

If it makes a successful bid for Whitehaven, the AFR postulated, Yanzhou might seek consent from the Foreign Investment Review Board to delay listing its Yancoal Australia subsidiary, as it will need time to integrate Whitehaven’s mines.

In gaining FIRB approval to acquire Felix, Yanzhou agreed to float Yancoal on the Australian Securities Exchange by the end of 2012 and to own less than 70% of the company at that time.

Yanzhou chairman Li Weimin discussed the merits of the Yancoal float in the company’s recent annual report.

“Direct financing channels in different currencies are available by taking advantages of the listing platform, thus providing direct financing at low cost,” he said.

Peabody is well established in Australia’s coal industry and made a failed $3.8 billion bid for Macarthur Coal last year.

Whitehaven’s board has not announced a definitive timeline for the sale, which was officially launched in late October.

Korea Resources and Daewoo International collectively own 7.5% of Whitehaven’s flagship Narrabri North underground coal mine, but the Korean companies decided against making a final bid for Whitehaven to focus on other businesses.

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