Linc acquires Rio coal mine
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Shares in Linc Energy (LNC) have jumped after announcing the acquisition of Rio Tinto's (RIO) Blair Athol coal mine in Queensland.
The stock lifted 5% to $1.32 after coming out of a trading halt at 1421 AEST, partially recovering from its 10.4% decline yesterday when the company said it was de-listing from the ASX.
Linc said there was no upfront cost for the acquisition – to be owned by subsidiary New Emerald Coal – which includes the mining tenure, on-site assets and infrastructure.
The group said there is provision for commercial agreements to be put in place to provide access to train-loading capacity, workforce accommodation and port and rail capacity to Abbot Point.
New Emerald Coal expects the acquisition to be unconditional in the next six months, at which point it will begin mining with a view to produce up to three million tonnes of thermal coal a year.
"This enhances the value of New Emerald Coal and will deliver maximum value to Linc Energy shareholders as we continue towards the planned divestment of this non-core division,” said Linc Energy President of Coal Michael Mapp.
Linc Energy plans to divest the New Emerald Coal – which holds Linc's coal assets – through an IPO, joint-venture, merger or complete sale at some point in first half of 2014.
Rio Tinto decided to shut the mine in November last year after three decades of operation amid the declining coal price (see Tim Treadgold's Hot coal is cold comfort) and its $5 billion cost-cutting program.
Rio said at the time that there was around 10 million tonnes of coal left in the mine that was harder to reach in the seams and poorer quality.
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