Glencore’s Queensland coal mines up for sale

Japan’s Itochu Corporation and Sumitomo Corp are looking distance themselves from coal by selling their combined 45 per cent stake in two of Glencore’s Queensland coal operations.

Itochu has reportedly hired JP Morgan to move its 35 per cent holding, while Sumitomo has called on Rothschild to find a buyer for its 10 per cent interest as the trading companies move away from coal amid a price downturn.

Assets up for grabs include both the Newlands and Collinsville mines as well as access to a coal terminal at Abbot Point.

Business Spectator reports both firms are looking to shed the assets before the end of the year.

The move comes as the price for thermal coal drops from highs of above $US190 in 2008 to around $US70 a tonne.

The price plunge is due to decreasing demand out of the China and made worse by an over-supply of cheap coal from the US and has seen other Queensland assets also sold this year.

Nathan Tinkler bought Peabody’s Wilkie Creek coal mine in May for $US70 million while Glencore snapped up Rio Tinto’s Clermont mine for $1 billion.

A downturn in coal has also seen hundreds of jobs lost in the sector this year as companies push to become more efficient and cut workforces to pre-boom numbers.

Despite this, authorities in the sector see long-term demand as stable.

Demand for energy coal is expected to grow from the 5.4 billion tonnes produced today to 6.3 billion tonnes over the next 20 years.

In its annual word energy report, BP said world energy consumption is expected to rise by 45 per cent by 2035, with coal to make up 26 per cent of the energy mix.

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