In a teleconference discussing the Thai energy giant’s $A2 billion cash takeover offer, which was at a 40% premium to Centennial shares, Cameron said the price negotiations were much easier after the latest decisions by the federal government on its mining tax.
While noting that significant detail still needs to be worked out, Cameron said the Minerals Resource Rent Tax appeared to be better than the resources super-profits tax.
“I suspect that is reflected in the price we’ve managed to negotiate,” he said.
Banpu initially acquired a 14.9% stake in Centennial two months ago while it scooped up another 5% two weeks ago.
Cameron said the first move from Banpu came “totally out of the blue” and Centennial had no indication of the Thai company’s intentions until “very, very recently”
Despite the quick pace of the developments, Cameron reassured those working in Centennial operations.
“We feel there is a very good cultural fit between the organisations and Banpu has confirmed to us that it is their intention to maintain the current operations and the employees.
“So I don’t expect any material change in the day-to-day operations of our mine. Frankly it is, and will continue to be, business as per usual.”
Cameron confirmed Banpu wanted to change the sales mix by increasing export thermal coal sales over domestic market sales.
“With respect to concerns about coal supply to domestic power stations we’re obviously only one of the suppliers the government has got,” he said.
He said the New South Wales government had alternative plans to supply domestic power stations through the development of the Cobbora mine.
“I think they accept the reality that coal pricing will be reviewed not just by us but by all suppliers as long-term domestic contracts roll off.
“And the pricing will be on export parity and I think that’s the case whether Centennial remains as it is or becomes part of Banpu.”
While Centennial is purely a thermal coal producer, the company plans to produce up to 10% of semi-soft coking coal from the Newstan Lochiel project in the Hunter Valley.
The project is in initial feasibility stages and there are plans to use the existing infrastructure at the company’s Newstan mine to reach 4 million tonnes per annum of raw coal output.
The $1.3 billion Cobbora open cut thermal coal project in the Upper Hunter Valley has already created some environmental concerns, which is more notable given the greater community fears over air quality in the region this year.
State-owned utilities Macquarie Generation, Delta Electricity and Eraring Energy have formed an unincorporated joint venture to back the project, but aim to secure a mining company to develop and operate the mine.
The JV is seeking state government approval to mine 30Mtpa of raw coal and produce 20Mtpa of product coal.
Open cut mining is slated to start in 2013 for a life of 21 years.
