If such a deal went ahead it would be the latest in a series of takeovers where independent coal mining companies have fallen prey to global mining groups seeking to gain access to Australian prime coking and thermal coal reserves.
The deal would follow in the footsteps of Thai energy group Banpu’s $2 billion acquisition of Centennial Coal.
According to a story in The Australian newspaper, First Reserve, which already owns a 27% stake in Whitehaven, is stalking the New South Wales-based company and owner of the Narrabri coal mine in the Gunnedah Basin.
Whitehaven said on Thursday it was in talks with third parties “in relation to corporate transactions”.
Analysts and industry players see Whitehaven as a logical takeover target.
"Whitehaven would be potentially attractive due to its growth in production from 4 million tonnes per annum now to 9.5 million tonnes per annum (port capacity post NCIG Stage 2) over the next three years. WHC has strategically important infrastructure, such as its shareholding in NCIG as well as securing rail track capacity in the Gunnedah Basin (funded)," UBS analysts wrote in a report released Friday.
Based on analysis by Credit Suisse, released over the weekend, many Australian coal stocks are already trading with a substantial takeover premium in their share prices.
Whitehaven Coal is trading on a dollar per tonne figure of $5.33, which compares to the Felix Coal takeover by Yanzhou Coal of $5.22.
Whitehaven received New South Wales government approval to start the $300 million stage two development of its Narrabri mine.
The first of three continuous miners started cutting coal a month ago with stage one development of the mine costing $227 million for 500,000-700,000 tonnes per annum of production.
Stage two approval is a significant step to allow the mine to be transformed into a longwall operation with production of up to 8Mtpa.
The last hurdle is federal government environmental approval.
Whitehaven expects full production to result in 6Mtpa of low-ash, high-energy, low-sulfur thermal and pulverised coal injection coal for the export market.
Whitehaven’s share price rose by 21c to $6.34 in morning trade.
