Yancoal could target Kestrel if its Anglo ambitions fail to fly

The locally listed coal miner Yancoal is known to want to buy up assets

Listed coal miner Yancoal is believed to be angling to buy the $US3bn Kestrel coal mine when it is due to come up for sale by private equity owner EMR Capital – if it misses out on the $US4bn worth of Anglo American coal assets on offer, sources say.

EMR Capital is set to launch the sale process of Kestrel at the conclusion of the Anglo American process.

Kestrel is the world’s largest underground coking or metallurgical coal mine, producing about 7.1 million tonnes of coal annually that is used to make steel throughout the world.

It is located in Queensland’s Bowen Basin, 51km northeast of Emerald, and was purchased by the Owen Hegarty-chaired EMR Capital in 2018 from Adaro Energy for $US2.25bn.

The developments come as more information filters out about the sale process for the Anglo American coal assets on offer through Goldman Sachs and Morgan Stanley.

The understanding is that suitors are being told to ascribe zero value to the Grosvenor mine that has caught fire and been closed as a result.

Earlier, the value of Anglo American’s coalmining portfolio on offer was thought to be about $US5bn but based on loose assumptions, the Grosvenor mine, which has produced about four million tonnes of coking coal annually, would be worth about $US1bn, so that would take the value of the offering down to about $US4bn.

In reality, analysts believe Grosvenor may in fact be a cost to any buyer because it comes with rail and port commitments for four million coal tonnes annually.

The fire at the mine at Moranbah, about 1000km northwest of Brisbane, was caused by a gas ignition incident in June and has since been suffocated.

Yancoal, which is 62 per cent owned by Chinese state-owned Yankuang Energy, is being assisted by CITIC CLSA and Royal Bank of Canada in its quest to buy the Anglo American portfolio. Chief executive David Moult made it clear during the company’s results presentation this month he is a keen buyer, with the group suspending distribution payments to keep its $1.5bn war chest to use for acquisitions.

Swiss commodity trader Glencore is also expected to run hard at the opportunity, while Stanmore Coal’s boss Marcelo Matos somewhat laid his cards on the table during the company’s result this week. While he would not say if Stanmore was a participant in the sale, he noted that its asset (Poitrel) was next to Anglo American’s (Grosvenor and Moranbah North).

Stanmore’s Indonesian backers, such as Golden Energy, are likely to be there to support its bid, as could BUMA Energy. Or it may play separately.

On offer are Anglo American’s Capcoal and Dawson assets, and its most attractive mine is Moranbah North as well as Grosvenor. Also in the mix are its Aquila project, an interest in Jellinbah and the potential Moranbah South project.