Calgary Herald

Collapse of coal prices highlighte­d by $1 sale

- JESSE RISEBOROUG­H AND JUAN PABLO SPINETTO

LONDON The destructiv­e force of a collapse in world coal prices has been underscore­d by the sale of a mine valued at $860 million Australian (US$631 million) three years ago for just a dollar.

Brazilian miner Vale SA and Japan’s Sumitomo Corp. sold the Isaac Plains coking-coal mine in Australia to Stanmore Coal Ltd., the company said in a statement. Sumitomo bought a half stake for A$430 million in 2012.

A slump in the price of coking coal, used to make steel, to a decade low is forcing mines to close across the world and bankruptin­g some producers.

Isaac Plains in Queensland “was one of the most exciting coal projects in Australia,” Investec Plc analysts said in a note to investors on Friday. The site has a resource of 30 million metric tons, according to Stanmore.

The company plans to restart output at Isaac Plains at a reduced production rate. It sees “significan­t” synergies with its adjacent Wotonga deposit, recently acquired. It’s also secured a US$42million loan to help finance a return to production.

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