The pursuit of grass roots (or tree fossils NYway) energy assets goes on , and the purchase price seems to be no problem for some people. RTP is in the news again...
newsday.com
Cheers
Edit
Also........MINING giant Rio Tinto has extended its Australian buys this year to $7 billion, agreeing to acquire the local coal assets of US-based Peabody Resources.
Rio, through 71 per cent-owned Hunter Valley miner Coal and Allied (CAA), will pay $US455 million in cash as well as assuming another $US111 million worth of Peabody's debt, taking the total value of the deal to $US566 million ($1.014 billion).
The deal completes the most acquisitive year in Rio's history.
It has already spent $1.5 billion to mop up aluminium subsidiary Comalco, $3.5 billion to win rival iron ore miner North, $712 million to take over diamond producer Ashton Mining, and through CAA, $242 million for Exxon-Mobil's Lemington coal mine in the Hunter Valley, in NSW.
Rio, along with BHP, is also expected to lodge a bid next month for giant Brazilian group Caemi, the world's No.4 iron ore producer.
Peabody's assets will lift Rio's attributable Australian coal output by 11 million tonnes to 30 million tonnes a year, just behind BHP – which is expected to produce 36 million tonnes next year following its takeover of QCT Resources.
The deal will lift Rio-controlled – and marketed – Australian production to 55 million tonnes, equal to that managed by BHP here each year.
But while BHP primarily produces coking coal for the highly cyclical steel market, Rio will be Australia's biggest producer and exporter of thermal coal, used to generate power, for which demand and prices are set to explode.
That should have a big impact on forecasts for Rio's future coal earnings, given some analysts are already tipping net profit increases of 20 per cent a year.
Rio's global coal operations earned net profits of $US220 million last year; the Peabody assets alone are expected to add $US100 million to CAA's pre-tax profits in calendar 2001. CAA posted net profits of $67.6 million from sales of $548 million last year.
CAA managing director Kim Tronson heralded the deal as "the critical step" in the rebirth of the 150-year-old company after two decades of diminishing returns.
"We are now big enough to make a difference," Dr Tronson told The Australian yesterday. "Any major Asian power utility . . . wanting to procure a supply from the Hunter Valley really needs to deal with Coal and Allied."
Four of Peabody's five operations are in the Hunter Valley, namely Bengalla (37 per cent Peabody), Warkworth (100 per cent), Narama (50 per cent) and Ravensworth (72.5 per cent). It also owns 80 per cent of the big Moura mine in central Queensland's Bowen Basin.
The NSW mines lie adjacent to, or near, CAA's existing Mount Thorley, Hunter Valley and Lemington mines, meaning that significant synergy gains should be possible.
Dr Tronson said that having acquired Lemington and the Peabody assets in the past two months, CAA would now focus on maximising returns from its expanded asset base.
With CAA's sole focus on the Hunter Valley, the company is expected to sell its stake in Moura to Rio's wholly owned Pacific Coal, which manages the Blair Athol, Kestrel and Tarong operations in Queensland.
Dr Tronson said it was "too early" to speculate on Moura's ultimate fate.
On settlement next month, Rio will be the western world's second biggest coal producer, with total attributable group output of about 155 million tonnes a year, not far behind Peabody at 170 million tonnes.
Rio shares closed up 39c at $28.80 yesterday. |
