Mining Journal > Finance > Korean companies target Whitehaven Coal

Korea Resources Corp and Daewoo International Corp, the trading company controlled by Posco, made an initial bid for Whitehaven Coal Ltd, an Australian producer with a market value of A$3.6 billion (US$3.6 billion).

The two companies made a preliminary offer, Kang Shin Young, a spokesman for state-run, Seoul-based Korea Resources, said without giving details. Korea Resources is leading the bid, Kim Beom Suk, a spokesman for Daewoo International, said by phone. Whitehaven, which offered itself for sale in October, short-listed potential buyers this month.

Demand for coal from steel and power producers has spurred mining companies to seek assets worldwide, with deals worth US$38 billion announced in the past year. Whitehaven, which produces both energy and steelmaking coal, may be looking for offers greater than A$3.7 billion, UBS AG said in a report last month.

“Everyone wants a slice of the coal market,” Lucinda Chan, division director and head of Asian business at Macquarie Private Wealth in Sydney said. “Commodity prices are expected to be strong, so there’s a lot of interest as coal is a highly used commodity.”

Whitehaven rose 2% to A$7.24 at the close of trade in Sydney, the highest since June 1, 2007. It has climbed 13% since opening its books to potential bidders on October 29. Daewoo International rose 0.4% to close at W36,950 (US$32.81) in Seoul trading.

Whitehaven won’t comment on which parties have made bids, managing director Tony Haggarty said by phone.

(Bloomber)