By Robb M. Stewart
MELBOURNE--Peabody Energy Corp. (BTU) is pushing ahead with the
proposed sale of its Wilkie Creek thermal coal mine in northeastern
Australia, even as the industry continues to be buffeted by weak
prices and rising costs.
"The Wilkie Creek sales process remains under way, with
discussions with interested parties continuing," the global coal
company said in a media release published on its website.
Peabody earlier this year hired UBS to advise on the sale of
Wilkie Creek as it moved to bed down last year's 4.9 billion
Australian dollar (US$5.1 billion) acquisition of Macarthur Coal
Ltd. An information memorandum on the mine in Queensland state,
which has a resource of about 500 million metric tons and an annual
output capacity of 2 million tons, was sent to potential bidders in
March.
A slump in prices for coal and other industrial commodities this
year has forced a number of companies to review their expansion
plans and focus on cutting costs.
Xstrata PLC (XTA.LN) has cut the number of contract workers it
uses at its coal mines in Australia, while Rio Tinto PLC (RIO) is
cutting jobs at one coal mine in Queensland and has said another
will close before the end of the year. Mining magnate Nathan
Tinkler last month walked away from a proposed A$5.3 billion
takeover bid for Whitehaven Coal Ltd. (WHC.AU).
The Wilkie Creek mine, located in the Surat Basin of southeast
Queensland, began operations in 1994 and was acquired by Peabody in
2002. The coal is sent by rail to the Port of Brisbane, where it is
exported to Japan, Taiwan and Korea for use by the power generation
industry. The mine employs about 190 people and 30 full-time
contractors, according to Peabody's website.
Write to Robb M. Stewart at robb.stewart@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
