Japan Buys into Australian Coal Mine in Shift from Nuclear
Japan is buying stakes in coal mining firms in a bid to shift to coal-fired power following the March 11 tsunami and nuclear disaster.
Aston Resources Ltd. of Brisbane announced Monday it has agreed to sell to Japan's Electric Power Development Co. Ltd. a 10 percent stake in its Maules Creek coal project for A$370 million ($357 million).
Once the transaction is finalized, Aston "would have the majority of the funds required to develop the project,'' Chief Executive Officer Todd Hannigan said in a statement to the Australian stock exchange.
Japan has yet to fully recover from the devastating 8.9 magnitude earthquake that hit northern Japan on March 11. It triggered a tsunami that killed tens of thousands of people and a severely damaged the Fukushima nuclear reactor.
Earlier, Fitch Ratings said Japan's electricity needs would be met in the short term by coal and fuel oil-fired generation.
The Aston stake sale includes a long-term thermal coal offtake agreement with J-Power, subject to agreement by Japan's Itochu Corp. Aston sold to Itochu Corp. in December last year a 15 percent stake in the mine for A$345 million.
Itochu is also entitled to match the terms of the asset sale agreement, Aston further said in its statement.
The agreement with Electric Power Development, also known as J-Power, assesses Maules Creek at A$3.7 billion, suggesting better coal prices following the floods in Australia early this year and a change of mindset on coal as a source of energy in Japan following the nuclear disaster.