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Glencore and Bloomfield acquire Vale’s Integra coal complex

Australia's Glencore and the Bloomfield Group have acquired Brazilian Vale’s Integra coal complex in the Hunter Valley, the buyers said in a statement on August 25.

The binding agreement saw Bloomfield acquire the Integra open cut mine together with the wash plant and rail loop facilities, while Glencore acquire the Integra underground operations.

The Integra coal mine complex, located near Singleton in the NSW Hunter Valley, was put into care and maintenance by Vale in May 2014 due to negative earnings.

The Integra underground had been a profitable semi-hard coking coal mine in the past, with annual production capacity at 4.5 million tonnes; while the open cut mine’s annual capacity was 3.6 million tonnes.

The underground operation will be renamed “Rix’s Creek North” and would run as a bolt on to Bloomfield’s Rix’s Creek business, which lies adjacent to the south.

“This is a logical and unique opportunity that would strengthen our ability to operate over the long term,” said John Richards, managing director of Bloomfield.

Head of Glencore’s Australian Coal operations, Ian Cribb said there are no immediate plans to reopen the underground operation.

Vale sold its thermal coal at an average of $54.55/t in the second quarter, 20% less than a year ago and far from the more than $100/t the company used to fetch two years ago. The producer's coal unit has been posting negative earnings before interest, taxes, depreciation and amortisation, or adjusted EBITDA, since 2010.

"There is a strategic shift," Vale said in an e-mailed statement, adding the miner was concentrating on "world-class assets with high reserves volume and lower cost potential."

source: http://en.sxcoal.com