MARKETS

China to continue coal buying spree: UBS

CHINA will continue to look at acquiring coal companies and Yanzhou's proposed $A2 billion takeov...

Lou Caruana
China to continue coal buying spree: UBS

UBS head of investment banking for Asia David Chin is reported by Reuters as telling a media briefing in Shanghai that Gloucester's major shareholder, Singapore-based Noble Group, had backed the proposed deal.

“We feel that Gloucester is already a listed company and its parent is also a listed company, in Singapore,” he reportedly said.

“There should be few obstacles and the chance of success is very big."

Chinese companies need to acquire natural resource assets in Australia so they can tap its commodity base and provide the raw material for residential, commercial and infrastructure projects across China.

The proposed Gloucester acquisition was just one of the expected takeovers to come from China in the coming months across the resources and industrial sectors.

Yanzhou announced the $8 billion merger with Gloucester and its Australian Yancoal subsidiary which will see the Chinese giant own 77% of Australia’s largest independent coal mining company.

Under the terms of the proposal, Gloucester shareholders would be given $3.20 in cash and the option to receive either shares in the merged company or a combination of shares and contingent value rights through a scheme of arrangement.

The merged companies would have a strong presence in the Hunter Valley of New South Wales, with combined coal production of 15 million tonnes per annum.

Gloucester issued a statement saying: "The Gloucester directors believe that a combination of Gloucester and the Yancoal assets has the potential to create a world class coal production and export operation".

The merger is conditional on the new entity obtaining a listing on the Australian Securities Exchange and remains subject to shareholder approval, with 75% approval required from Gloucester shareholders.

The Gloucester directors have not yet recommended accepting the proposal but Noble Group, Gloucester’s largest shareholder with 64.5%, has indicated it would vote in favour of the merger.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production