Citigroup analysts estimate the company can make a tidy $20 per tonne profit after tax and cash flow generated by the company’s Australian operations are more than enough to cover the asking price for Syntech, which is expected to increase its 1.4 million tonne production to 11.4Mt within two years.
The acquisition has also delivered the Chinese group 1.4Mt of strategic port access at Brisbane and 2.3Mt at Gladstone on top of 440Mt of JORC-compliant reserves.
Yanzhou, which recently retrenched 18 workers at its Ashton mine in the Hunter Valley, is reportedly ready to raise $1 billion for its Australian subsidiary company Yancoal on the Australian Securities Exchange by the end of the year after walking away from an acquisition of Whitehaven Coal.
The company would sell approximately a third of Yancoal, which owns the Moolarben and Austar mines in New South Wales, through an initial public offering, according to Bloomberg.
Yancoal investor relations manager Ian McAleese said it had a “strategy to be IPO-ready by the end of 2011”
“We would like to have our prospectus ready to be able to take advantage of market conditions,” he told Bloomberg.
“The preferred way to do this is to sell more stock than 30 per cent of the total value.”
Yanzhou, which paid $3.1 billion for Felix Resources in 2009, operates four mines in Australia and reported a net income of $415 million last year.
