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Australia's NuCoal signs up Japan partner for coal project
MELBOURNE, Sept 17 |
MELBOURNE, Sept 17 (Reuters) - Japan's Mitsui Matsushima Co Ltd has agreed to help fund a coal project being developed by NuCoal Resources Ltd in Australia, effectively valuing the project at A$360 million ($381 million), the Australian firm said on Monday.
The deal comes only a week after a Singapore-based firm offered to buy out an Australian resources fund, illustrating that some Asian companies are trying to take advantage of a downturn in Australian mining as sliding commodities prices and soaring costs have dented project valuations and share prices.
NuCoal said Mitsui Matsushima, a coal miner and trader, has agreed to spend up to A$40 million on the Doyles Creek coking coal project in the Hunter Valley coal region in New South Wales, which would give it the right to earn up to a 10 percent stake in the mine.
"The investment ... demonstrates a significant commitment to the project and the New South Wales coal industry at a time when elsewhere in the Hunter Valley job losses and a reduction to development plans and production levels are being experienced," NuCoal Managing Director Glen Lewis said in a statement.
The Japanese firm has the option to buy a further 10 percent stake in the mine for a price tied to the level of customer commitments for the coal which is used in steelmaking, and it is entitled to exclusively market the coal in Japan.
The A$40 million the Japanese company has agreed to spend effectively values the project at A$360 million, or 47 cents per NuCoal share, well above the company's share price of A$0.175 ahead of the announcement.
Last week, Singapore-based IMC Resources Holdings offered a 39 percent premium to buy out Australia's Linq Resources Fund for A$106 million.
($1 = 0.9457 Australian dollars) (Reporting by Sonali Paul; Editing by Daniel Magnowski)
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