Macarthur to make Bowen Basin acquisition

Finance

ASX-listed miner Macarthur Coal Ltd called for a trading halt today as it announced plans of an institutional placement to raise funds for an acquisition in Queensland.

The Brisbane-based company is seeking to raise a minimum A$429 million (US$379 million) to fund the acquisition of a 90% interest in MDL162, a mining tenement in the Bowen Basin owned by contract miner MCG Group.

According to Macarthur, MDL162 is located close to established rail and road infrastructure, has access to power and water and will be reliant on Wiggins Island coal export terminal’s supplementary stage for export.

Macarthur intends to pay MCG Group A$334 million for the share in MDL162, providing it the right to market all coal from the tenement. The remainder of the funds would be used for further exploration of MDL162 and a bankable feasibility study, and as working capital for the company’s exploration and evaluation programme.

Nicole Hollows, Macarthur chief executive, said the opportunity to acquire the share in MDL162 was consistent with the company’s current business strategy.

“MDL162 would enhance Macarthur’s footprint in the Bowen Basin, Australia’s largest coal reserve, and provide the company with additional exposure to export quality metallurgical coal,” Ms Hollows said.

“MDL162 is expected to begin producing after 2014 and will provide up to 6Mt/y ROM at full run-rate.”