Japan To Fund NuCoal Resources Project In Australia’s New South Wales
Barely a week after an Australian resources fund received a buy out offer from a Singapore-based firm, Australia's NuCoal Resources Ltd has received a funding assistance from Mitsui Matsushima Co Ltd from Japan that will help develop the Doyles Creek coking coal project in New South Wales.
Valued at A$360 million ($381 million), the Australian firm said on Monday coal miner and trader Mitsui Matsushima has consented to spend up to A$40 million on the coking coal project located in the Hunter Valley coal region. With the arrangement, Mitsui Matsushima automatically earns a 10 per cent stake controllership in the mine.
"The investment . . . demonstrates a significant commitment to the project and the New South Wales coal industry at a time when elsewhere in the Hunter Valley job losses and a reduction to development plans and production levels are being experienced," Glen Lewis, NuCoal managing director, said in a statement.
Moreover, the A$40 million that Mitsui Matsushima allotted to spend on the project corresponds to a NuCoal share placed at 47 cents per, which according to Reuters, is high above the Australian company's share price of A$0.175 before the announcement was made.
The offer further enables the Japanese firm an option to purchase an additional 10 per cent stake in the coal mine project commensurate to the price attached to the level of customer commitments.
Last week, Australia's Linq Resources Fund received a 39 per cent buy out offer, or A$106 million, from Singapore-based IMC Resources Holdings, in what could be a sign that some Asian companies, still with faith that Australia's fading mining boom will rebound, are trying to take advantage of the very downturn to seize Australian mining projects and companies.
IMC Resources actually is Linq's biggest shareholder, controlling a 17.5 per cent stake in the latter. Part of a family-owned business mostly involved in shipping, it offered to buy the remaining shares in Linq at A$0.70 per share.