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Australia : Mitsubishi Corporation has Reached Agreement to Sell its Interests in the Hunter Valley Operations and Warkworth Coal Mines in Australia.

Mitsubishi Corporation (MC) hereby makes an announcement in relation to its interests in the Hunter Valley Operations (HVO) and Warkworth (WW) coal mines in Australia. MC currently holds a 32.4% and 28.9% ownership interest in HVO and WW, respectively, through its wholly owned subsidiary Mitsubishi Development Pty Ltd (MDP).

Following Rio Tintos agreement to sell 100% of its shares in Coal and Allied Limited (C&A) to Yancoal Australia Ltd (Yancoal), MC has been in discussion with Yancoal in respect of its tag along right triggered by this transaction. MC received an offer from Yancoal for it to purchase MCs interest in HVO for the amount of U$710 million and MC has now accepted this offer. MC has also agreed to grant Yancoal a call option over MCs 28.9% interest in WW requiring MC to sell for the amount of U$230 million in connection with the agreement to sell its HVO interest.

Separately, Glencore has made a proposal to MC for Glencores purchase of its HVO and WW interest at the price of U$920 million, in connection with Glencores offer to Rio Tinto to purchase all of the shares in C&A. MC has accepted the proposal, subject to Glencore successfully completing the acquisition of C&A.

Based on its mid-term strategic plan, MC has been taking steps to improve its asset portfolio without increasing its overall investment balance, particularly as it relates to its mineral resources investment business. In line with this strategy, MC has agreed to sell both its interests in HVO and WW to whichever party (being either Yancoal or Glencore) that ultimately becomes the successful purchaser of all of the shares in C&A.

In addition to the divestment of its ownership interest in HVO and WW, MC has also reached an agreement with Yancoal on exclusive thermal coal sales agency arrangements for the Japanese market. Through our mineral resources trading division, MC will continue to contribute to the stable supply of thermal coal to power utilities in Japan and more broadly across Asia, where overall demand for thermal coal is expected to grow. MC has agreed separate arrangements with Glencore regarding the Japanese market. 1. MCs right to sell its interest in HVO to the third party to which Rio Tinto sells its share of C&A.

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Publication:Mena Report
Geographic Code:8AUST
Date:Jun 14, 2017
Words:401
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