The company bought Itochu’s 10% interest while Itochu agreed to take a 5% equity stake in Gloucester Coal by buying 4.15 million shares at $A3.32 each. The funds from the placement will be used to acquire Itochu’s 10% stake including freehold land, coal handling plan, mining operations and reserves and resources.

“Gloucester Coal is pleased to announced the proposed acquisition of Itochu Corporation’s 10% interest in the Stratford joint venture. At the same time, Itochu will take up a share placement in Gloucester Coal and enter into a new coal sales agency agreement continuing the strong relationship between the companies,” Gloucester said.

The two companies have been partners in the Stratford operation since operations began in 1995.

Gloucester said the step was an important one in rationalising and optimising the mining operations. The result will be more efficient administration and a cleaner corporate structure. Gloucester will consolidate its 100% ownership of the Gloucester Basin coal tenements and boost its share of annual production by 11% from July.

Gloucester’s Stratford operations produced 2.7 million tonnes of thermal coal in 2004.