Gloucester Coal plans acquisitions

Company seeks to raise A$230-million to acquire two coal miners.

{reg] Gloucester Coal has announced that it will be raising A$230 million to fund a series of acquisitions reports Mining Weekly.

The company is planning to acquire two coal miners in New South Wales in a deal worth A$615-million. The company has entered into an agreement with shareholder Noble to buy Donaldson Coal, which owns thermal and semi-soft coking coal mines in New South Wales and an 11.6 percent shareholding in the new coal export terminal at Newcastle, giving it access to critical port capacity.

The company also plans to buy the Monash Group from Ellemby Holdings, which would give it access to a prospective semi-soft coking and thermal coal development opportunity, located in the Hunter Valley. Monash owns two exploration licenses covering 22.19 km2 in New South Wales. The company says the licenses contain some 287-million tons of export-grade coking and thermal coal. The company hopes to begin developing these reserves by 2017, ramping up to full production of nine-million tons a year by 2022.

Analysts say the deals have the potential to turn the company into a premier coal producer in Australia. The deal will allow it to significantly enhance its resource and existing production base and provide opportunities to improve its product offering through blending opportunities. Finally, the company through its Donaldson's shareholding in the coal export terminal should also have a significantly enhanced platform for growth, with port capacity to deliver its stated growth plans, and ability to develop other early stage projects such as Monash with this port capacity. {/reg}