Peabody Continues Sale Talks For Australia Wilkie Creek Mine
09/07/2012| 02:06am US/Eastern
By Robb M. Stewart
MELBOURNE--Peabody Energy Corp. (>> Peabody Energy Corporation) is pushing ahead with the proposed sale of its Wilkie Creek thermal coal mine in northeastern Australia, even as the industry continues to be buffeted by weak prices and rising costs.
"The Wilkie Creek sales process remains under way, with discussions with interested parties continuing," the global coal company said in a media release published on its website.
Peabody earlier this year hired UBS to advise on the sale of Wilkie Creek as it moved to bed down last year's 4.9 billion Australian dollar (US$5.1 billion) acquisition of Macarthur Coal Ltd. An information memorandum on the mine in Queensland state, which has a resource of about 500 million metric tons and an annual output capacity of 2 million tons, was sent to potential bidders in March.
A slump in prices for coal and other industrial commodities this year has forced a number of companies to review their expansion plans and focus on cutting costs.
Xstrata PLC (>> Xstrata PLC) has cut the number of contract workers it uses at its coal mines in Australia, while Rio Tinto PLC (>> Rio Tinto plc) is cutting jobs at one coal mine in Queensland and has said another will close before the end of the year. Mining magnate Nathan Tinkler last month walked away from a proposed A$5.3 billion takeover bid for Whitehaven Coal Ltd. (>> WHITEHAVEN COAL LIMITED).
The Wilkie Creek mine, located in the Surat Basin of southeast Queensland, began operations in 1994 and was acquired by Peabody in 2002. The coal is sent by rail to the Port of Brisbane, where it is exported to Japan, Taiwan and Korea for use by the power generation industry. The mine employs about 190 people and 30 full-time contractors, according to Peabody's website.
Write to Robb M. Stewart at email@example.com
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