Muswellbrook's Bengalla open-cut in $860-million ownership change

SALE: Coles has sold part of its stake in Bengalla.
SALE: Coles has sold part of its stake in Bengalla.

COLES’ owner Wesfarmers has agreed to sell its 40 per cent stake in the Bengalla open-cut near Muswellbrook to its joint-venture partner New Hope, which will emerge with at least 80 per cent of the operation.

In a statement this week to the stock exchange, New Hope managing director Shane Stephan said New Hope’s ultimate stake would depend on whether Mitsui and Taipower, which held 10 per cent each, decided to stay or go.

“The acquisition of an additional interest in Bengalla demonstrates New Hope’s long term commitment to the Bengalla mine and a positive outlook for the global export thermal coal market,” Mr Stephan said.

New Hope, which is part of the Soul Pattinson group, began the purchase of its original 40 per cent stake from Rio Tinto in late 2015.

Wesfarmers is reviewing its industrial division and sold its other coalmine, WA’s Curragh, in March. It expects to book at least $670 million in profit on the sale, which should be finalised this year.

Despite the growing controversy over coal, New Hope chairman Rob Milner is unashamedly optimistic in his outlook for the sector, and for the company.

“Unlike many of our competitors, New Hope is committed to the supply of high quality thermal coal to our valued customers in the growing energy market of Asia over the long term,” said in the company’s 2017 annual report.

“The results achieved this past year validate the decisions taken during the recent cyclical price downturn to maintain our globally competitive corporate capabilities in resource and project development.

“The ownership of the Australian thermal coal industry is becoming more concentrated and this fact is being noticed by those responsible for the sustainable supply of reliable and cost effective base load power into Asia.”

In the three years since New Hope bought into Bengalla, the price of Newcastle thermal coal, its main product, has gone from about $US60 ($80) a tonne to about $US115 ($154) a tonne this month.

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