Coal news and updates

Australia's South32 said on Thursday it will pay $200 million to acquire Peabody Energy's Metropolitan coal mine in Australia amid a resurgence in demand for coal to make steel.

 

Peabody, the biggest U.S. coal miner, filed for bankruptcy protection in April after a sharp drop in coal prices left it unable to service its $10.1 billion debt, much of it incurred for expansion in Australia.

 

The bankruptcy ranks among the largest in the commodities sector.

 

"The Metropolitan Colliery is a natural fit within our portfolio and the acquisition is consistent with our strategy to invest in high quality mining operations where we can create value," South32 Chief Executive Graham Kerr said in a statement.

 

The deal comes as coking coal prices stage a rally that's seen prices rise more than 200 percent this year to about $230 per tonne.

 

A drop in domestic production in China has been cited for the increase.

 

South32, spun off as a separate entity by BHP Billiton >BLT.L> in May 2015, has made no secret it has been on the lookout for acquisitions. (Reporting by James Regan; Editing by Alan Crosby)

SOurce: Reuters.COm