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Mitsubishi mulls selling stake in Australian coal mine www.asia.nikkei.com
TOKYO -- Mitsubishi Corp. looks to unload its stake in an Australian steam-coal mine as the Japanese trading house reshuffles its resources business, which took a big hit from market stagnation last fiscal year.
The Clermont mine in Queensland, which began production in 2010, churns out around 12 million tons of coal yearly, and Mitsubishi's share entitles it to around 3.8 million tons. The stake in this project accounts for around 30% of the trading house's global interest in steam coal, which is used in power generation.
Steps are being taken to solicit buyers via an advisory company. The sale could bring tens of billions of yen (10 billion yen equals $89 million).
Separately, Mitsubishi may sell its stake in Hunter Valley Operations, a steam-coal mine in Australia's New South Wales. Mitsubishi holds around 4.2 million tons of the site's overall annual output of about 13 million tons.
Many general trading houses reliant on resources businesses logged massive impairment losses last fiscal year due to low resource prices. Mitsubishi, which sustained its first-ever net loss, is working to ease dependence on resources.
The company will not increase its balance of investments in and lending to the resources segment, working instead to strengthen some operations and downsize others. Steam coal, likely to become less competitive amid stronger environmental regulations, is among the assets to be unloaded.
Mitsubishi will focus more on coking coal, used in steelmaking, as well as on copper and liquefied natural gas.
The Japanese company has a 50-50 Australian venture with resource major BHP Billiton, and the business operates a coking-coal mine Down Under. Mitsubishi will continue seeking new investment opportunities in promising projects for steelmaking coal, taking advantage of the resource major's broad network.
Mitsubishi also is rebalancing its shale gas business to raise competitiveness. The trading house holds a roughly 40% stake in the Canadian Montney gas field via a joint venture with Japan Oil, Gas and Metals National Corp., and wants to buy additional interest from Jogmec. Meanwhile, Mitsubishi in November decided to unload its stake in another Canadian shale gas field, Cordova.
Published Date:2017-03-22
