Mitsubishi to cash out of 2 Aussie coal mines
Japanese trading house shifting away from resources as prices slump
TOKYO -- Mitsubishi Corp. has decided to sell its interests in a pair of coal mines in New South Wales, Australia, as weak resource prices prompt trading companies to replace existing interests with new assets.
Combined proceeds are seen topping 100 billion yen ($910 million). Mitsubishi has stakes of 32.4% in the Hunter Valley Operations mine, which produces 14 million tons a year, and 28.9% in the Warkworth mine, which produces 8 million. The interests correspond to the amounts invested.
Each mine is jointly owned with Coal & Allied Industries, a unit of Anglo-Australian mining multinational Rio Tinto. Rio Tinto was proceeding to sell C&A to Yancoal Australia, a subsidiary of China's Yanzhou Coal Mining. But Swiss commodity trader Glencore also threw its hat into the ring Friday.
Mitsubishi has the right to sell if a co-owner changes. The trading house received offers from both Yancoal and Glencore of around $920 million to $940 million and decided to sell Monday. It will sign an exclusive sales contract with the buyer and continue receiving coal after the sale.
Mitsubishi, which logged its first-ever net loss in fiscal 2015, has decided not to increase investment and lending in businesses vulnerable to market fluctuations. In metal resources, the company is concentrating on copper as well as on coal used to make steel materials and is considering acquiring new assets.
Mitsui & Co. is thinking about selling an interest in Australia's Dawson mine, which it has been developing since the 1960s. The trading house acquired a stake in a Mozambique coal mine in 2016 as it also shuffled assets.