Felix has set the purchase price at $A68 million, which is due to be completed by the end of February 2007, and said the funds from the sale will be used to develop Felix’s large Moolarben coal deposit in New South Wales.

Felix will continue to manage the Yarrabee operation while CRC will add its expertise in energy marketing.

Yarrabee produces both PCI coal – for use by steelmakers – and thermal coal, which is sold primarily to Europe and China for power generation.

Yarrabee has a long track record of successful operation with current sales capacity of around 1.7 million tonnes per annum.

Felix said today there is some potential to increase production at the mine with the newly formed joint venture planning to study several expansion options in the medium term.

Felix managing director Brian Flannery said the company sees the joint venture as strategically sensible for both Felix and CRC.

CRC is based in Europe and owns coal deposits in Columbia.

Chief executive of CRC John Dreyer said the company is delighted to join forces with Felix and the company is now positioning itself for further expansion in Australia.