THIS MONTH IN COAL: Xstrata Coal Makes an Offer for Gloucester Coal

Engineering and Mining Journal, Jun 2007

Xstrata Coal announced that it has entered into an agreement to acquire Gloucester Coal Ltd. for A$391 million.

Gloucester Coal's operations further extend the life of Xstrata's New South Wales mines, with good potential to add to the resource and reserve base through near-mine exploration and further resource conversion. "Our ability to blend thermal coal production from Xstrata's existing Hunter Valley mines with Gloucester Coal's thermal coal product, together with the addition of a high-fluidity coking coal to our portfolio, diversifies our coal product offering further and presents significant synergy potential," said Peter Coates, Xstrata Coal chief executive. Gloucester Coal has two mining operations, Stratford and Duralie, both located in the New South Wales Gloucester geological basin. The company also holds coal exploration licenses A311 and A315 which cover a large proportion of the basin and include a number of known coal deposits. In the year ended June 30, 2006, Gloucester Coal produced 1.9 million mt of saleable thermal and coking coal and reported a net profit of A$40.4 million.