Linc Energy has announced it will divest or demerge its coal division in 2014 once it lists on the Singapore Exchange later this year.
The diversified energy company on Wednesday attached a $440 million valuation to its coal business New Emerald Coal [NEC], which has a Joint Ore Reserves Committee-compliant resource of 344.2 million tonnes of coal.
Linc’s evaluation includes the recently acquired Blair Athol mine and its Teresa coal project in the Bowen Basin.
Linc Energy chief executive officer and managing director Peter Bond said the move to divest and de-merge its coal division in 2014 will allow the company to improve investor returns, focusing on its core energy business of conventional and unconventional oil, gas, shale and UCG.
Bond added that an upgrade in the coal resource at Blair Athol will add an extra ten years mine life at a production rate of three million tonnes per annum.
“NEC is well-positioned to become a leading coal production company through a solid development plan and a focus on purchasing low cost coal assets with immediate production capabilities,” he said.
NEC managing director Michael Mapp said the company is currently negotiating deals to acquire other similar coal assets to add more coal production to the company’s portfolio.
“Our team at NEC has been working hard to realise this divestment and de-merger and we now plan to move forward with developing a strong and dynamic business,” Mapp said.
NEC’s is also developing the Pentland open cut in the Galilee Basin and currently holds 27 exploration permits in Queensland.