CORRECTED-Australia's Cockatoo lines up Asian funding for coal expansion
(Corrects first figure in paragraph 4 to A$113 million)
MELBOURNE Oct 18 (Reuters) - Cockatoo Coal Ltd has managed to line up funds from three Asian firms for a A$286 million ($275.49 million) coal mine expansion in Australia in a sign of confidence in long-term demand for coal used in steel mills.
At a time when almost no one is investing in mines due to a slump in coal prices, Noble Group Ltd has agreed to take a 21 percent stake in Cockatoo and South Korea's SK Networks Co Ltd's and Indonesian coal miner Harum Energy Tbk PT have agreed to increase their stakes in the miner.
Spot coking coal prices have dropped from a high this year of around $170 a tonne to around $150 a tonne, but have recovered from a low of $130 in July.
Together the Asian firms have committed to buy at least A$113 million in new shares as part of a A$153 million equity raising, Cockatoo said on Friday.
The money raised will be used to repay a loan to Korea Exchange Bank and help fund the expansion of its Baralaba mine in the Bowen Basin, Australia's biggest source of coking coal.
Cockatoo expects to start producing from the expansion, being developed with Japan's JFE Shoji Trade Corp, in mid-2014, and aims to reach full capacity of 3.5 million tonnes a year in late 2016 up from about 750,000 tonnes now.
Australia and New Zealand Banking Group has fully underwritten a A$255 million project finance facility for the expansion.
In another deal involving Noble Group, Cockatoo announced a friendly takeover of coal explorer Blackwood Corp Ltd in a scrip offer worth A$21.8 million, based on Cockatoo's last trade. The takeover would expand Cockatoo's pipeline of coal opportunities in Queensland.
Noble, Blackwood's top shareholder, has agreed to sell its 51.2 percent stake to Cockatoo in the absence of a higher offer, Cockatoo said.
Blackwood shares jumped 16 percent to A$0.087 after the offer was announced.
SK Networks' stake in Cockatoo will increase to 25.8 percent following the placement, while Harum's stake will increase to 12 percent.
($1 = 1.0382 Australian dollars) (Reporting by Sonali Paul; Editing by Michael Perry)