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August 12, 2009

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Home » Business » Energy

Yanzhou in talks to buy Aussie miner

CHINA'S Yanzhou Coal Mining is in talks to buy Australian coal miner Felix Resources Ltd in a cash takeover bid worth about A$3.5 billion (US$2.9 billion), a person close to the negotiations said yesterday.

The Chinese miner is offering slightly less than the A$20 per share previously mentioned in media reports, said the person close to the deal who spoke on condition of anonymity because the bid is not finalized. Shares of the Brisbane-based Felix last traded at A$16.90.

China, which relies on coal for about 60 percent of its power and is the world's biggest coal consumer, has been buying coal and other resources from overseas to meet growing demand. But there has been some opposition in Australia to China's bids for the country's mineral resources.

Shares of Felix were suspended from trading in Australia on Monday, as were shares of Yanzhou in Hong Kong.

In an announcement on Monday to the Australian Securities Exchange, Felix said it expected to remain suspended from trading for five days pending an announcement on a potential change of control. Felix officials declined to comment further.

A woman at Yanzhou's office for the board secretary, who would not give her name, referred questions to a statement the company posted on Monday to the Shanghai Stock Exchange. In the statement, Yanzhou said it was suspending trading while it worked on a "major capital restructuring project."


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