While India’s increasing steelmaking and electricity demands are well known, it is rare for Indian companies to ink deals in Australia despite frequent media speculation.
But this situation might be starting to change.
Indian conglomerate Adani Group not only became a preferred proponent to develop a coal export terminal near Hay Point last month, but also spent big on a deal to buy a Galilee Basin tenement from Linc Energy last week.
Wendt noted this asset in Queensland was nowhere near production and Linc long talked about getting Chinese partners on board before they pulled out.
“It seems as though the Indians are starting to realise if we don’t pay up, we are not going to get these assets, and they are disappearing really quickly,” he said.
Whitehaven Coal is widely anticipated to be the next Australia-listed coal company to be taken over.
While the Whitehaven board might not be keen on the press coverage, it remains open to offers.
“Whitehaven has had, and continues to have, discussions with third parties in relation to potential corporate transactions,” the company announced last week.
Wendt said he would not be surprised if at least one of the groups looking at bidding for Whitehaven was an Indian company.
While a takeover play for Whitehaven seems imminent, the book build for Nathan Tinkler’s $400 million float of his company Aston Resources was completed on Friday night.
The target price for the IPO was $8.20 a share according to initial reports but due to weaker than expected interest the offer price will be $5.96 per share with the float expected to be complete on August 23.
While noting Aston’s Maules Creek project was certainly a large deposit, Wendt did not necessarily think the coal was of a “fantastic” quality.
Aston bought the Gunnedah Basin project off Rio Tinto subsidiary Coal & Allied for $480 million back in November.
The fact that such a major Australian coal producer sold the asset suggests it did not meet its needs.
“Rio has always been interested in first rate projects,” Wendt said.
“These projects that require big investment but aren’t first rate might sort of struggle for a little bit longer.”
The project is targeting 13 million tonnes per annum of raw coal for at least 21 years of open cut mining, with development scheduled to start in the December quarter of 2011.
The coal reserves total about 240Mt while total resources are estimated to be 610Mt of thermal and semi-soft coking coal.
Linc managed to sell its Galilee tenement to Adani for $500 million in cash plus a royalties agreement that Linc expects to provide a total cash stream of $3 billion during 20 years of mining.
Thai company Banpu is still working to finalise its takeover of Centennial, while Macarthur Coal was subject to considerable interest from Peabody Energy, New Hope and Noble Group a few months ago.
Yanzhou Coal Mining formally completed its Felix Resources takeover early this year while Noble bought up most of Gloucester Coal last year and is nearing a complete acquisition.
Noble also finished making unlisted New South Wales coal producer Donaldson Coal a wholly owned subsidiary during the March quarter.
