Glencore, the world’s biggest exporter of coal, bought out its two Japanese partners in an Australian coal venture that includes two mines and a stake in an export terminal.
The company has “moved to full-ownership of the Newlands-Collinsville joint venture in Queensland,” chief financial officer Steve Kalmin disclosed for the first time on a call to investors on Thursday. He said Glencore previously held 55% and had increased its stake in the past few months.
A spokesman for the company declined to comment on the cost of the acquisition from Japanese partners Itochu Corp and Sumitomo Corp, which owned 35% and 10% respectively. Itochu hired advisers from JPMorgan Chase & Co and Sumitomo assigned Rothschild in 2014 to sell their interests in the NCA joint venture, the Wall Street Journal reported at the time.
The price of coal from Australia’s Newcastle port, a benchmark for Asia, has surged 53% this year, peaking at its highest in more than four years last month, as reduced output in China tightens global supplies.
The global coal industry is in the midst of a revival as higher prices prompt mine restarts and expansions from Australia to the US as loss-making ventures turn profitable.
The acquisition will help boost Glencore’s coal production next year by 7.4% to an estimated 135mn tonnes next year, Kalmin said. The company restarted the Collinsville open cut mine in October. It produced 2.6mn tonnes in 2015. The Newlands operation, located in Australia’s far north-east, produced 7mn tonnes in 2014. Underground mining ceased in 2016, according to its website. An Itochu spokesman wasn’t immediately available to comment. A spokesman at Sumitomo wasn’t available to comment.
The logo of Glencore in front of the company’s headquarters in Baar, Switzerland. The firm’s acquisition of two Japanese partners will help Glencore boost its coal production next year by 7.4% to an estimated 135mn tonnes, an official said.
