Xstrata buys cattle farm for coal mine

Monday, 25 Jul 2011

It is reported that a large Queensland pastoral farm used for wagyu cattle breeding is set to become a coal mine after Australian Agricultural Company agreed to sell a property to mining company Xstrata.

The global miner will pay USD 21.6 million cash for the 17,474 hectare Meteor Downs property without any cattle or machinery. It completes a decade long encroachment by Switzerland based Xstrata on to AAC property having previously bought a south eastern corner of Meteor Downs for the Rolleston Coal mine.

AC says that the price was well in excess of the book value of the property which was used as a stud farm but had become a non core asset.

Mr David Farley managing director and chief executive said ahead of the company half year results this morning the money would be reinvested in other business areas, such as grazing land and a beef processing facility in Darwin

But Mr Farley was also critical of mineral rights laws that he said gave mining activity priority over farming. He said that "If Australia wants to sustain its agricultural services and it needs to have a proper audit and have a clear understanding of the impact of mining and coal seam gas."

Xstrata recently received federal approval to double accommodation at the Rolleston coal mine for up to 700 workers.

An application to expand mining operations still requires environmental approval because it could affect the Fitzroy River which flows out into the waters of the Great Barrier Reef.

Xstrata hopes to start mining the expanded Rolleston Mine by 2015.

(Sourced from www.smh.com.au)