Yancoal Australia is likely to buy more mines in Australia. The company which is a subsidiary of the fourth biggest coal producer in China, the Yanzhou Coal Mining company is looking at spending $1 billion to acquire new Australian mines.
The managing director of Yancoal Australia Murray Bailey said that they would consider large takeovers of more than $1bn. Mr Bailey said market conditions were creating potential opportunities and the company would consider both developed and undeveloped assets in Australia, including either thermal or steelmaking coal.
Yancoal Australia bought Felix Resources in 2009 for $3.1 billion. It is now likely to spend another $500 million buying assets in the country. Whitehaven Coal and assets of Bandanna Energy may be likely targets as per economic resource analyst Colin McLelland of Investec Bank Australia.
The company has been fairly active agreeing to buy Wesfarmer’s Premier Coal mine in Western Australia for a sum of $297 million this week. Last month it has spent $202.5 million on buying Syntech Resources, an Australian coal developer.
If the market stays like this for a period of time, you could certainly see people look at their projects and decide they’re better off selling some of those,said Colin McLelland. A sentiment that was echoed by Mr Bailey, when he said that there were some opportunities there with companies that are sitting on resources that may not have the capacity to fund their development.