Whitehaven Coal Ltd. (WHC), the Australian coal miner that put itself up for sale in October as demand for the commodity boosted mergers and acquisitions, said a number of parties have submitted formal proposals.
“Whitehaven is now in discussions with a number of these parties to determine which proposal, if any, will be recommended by the board,” the Sydney-based company said in a filing.
Whitehaven, which has a market value of A$3.5 billion ($3.7 billion), on Oct. 29 said it allowed interested parties to study its books and submit proposals for a takeover. Purchasing Whitehaven would give the buyer four mines and projects in New South Wales’ Gunnedah basin that produce pulverized coal for steelmaking as well as energy coal.
Demand for coal from steel and power producers has spurred global mining companies to add coal assets, triggering more than $10 billion of takeovers during the first quarter, the strongest start to the year in at least five years, according to data compiled by Bloomberg.
Whitehaven rose 0.7 percent to close at A$7.15 in Sydney trading. It has gained 6.4 percent since the start of the year.
The company also owns 11 percent of Newcastle Coal Infrastructure Group, a port developer that commissioned 30 million metric tons of export shipping capacity last March. A further 23 million tons are due to become available in mid-2012.
There have been a total $28 billion of mining mergers and acquisitions during the first quarter, the best start to the year since 2008. In the most expensive deal in the coal industry’s history, Alpha Natural Resources Inc. agreed Jan. 29 to buy Massey Energy Co. for $7.1 billion in cash and stock.
Coal producers in Australia, the biggest exporter, are being targeted as prices gain, prompting companies to spend more on acquisitions to secure reserves as consumption in China and the developing world drives up prices.
Record rains in Australia are likely to push contracts for both thermal and coking coal to record highs, Royal Bank of Scotland Group Plc analysts, led by Head of Commodity Strategy Nick Moore, said in a March 16 report. “We forecast robust demand for imported thermal coal from China, South Korea and Japan to drive global growth,” Moore said. (sourced Bloomberg)