Anglo American, the third largest metallurgical coal shipper in the world by sales volume, agreed to sell its 70% stake in the Foxleigh PCI mine to Taurus Fund Management, according to a company statement released Monday.
The sale came after Anglo American had put the Foxleigh PCI mine in central Queensland, Australia, on the market over a year ago, in February 2015.
Anglo American's share of coal production from the mine was 1.86 million mt in 2015, a 9% drop from 2014, the company's production report showed. Market sources agreed that the Foxleigh brand name was well-established and known for its good specifications. The specifications of Foxleigh PCI is 12%-13% volatile matter, 8%-9% ash, 0.5%-0.6% sulfur and about 7,850 kcal/kg GAR calorific value.
An international trader was surprised that the deal was concluded with a fund management company and not a mining company.
The buyer could "try to hold and sell when market is better," which is the probable approach, a mining source said.
The Q2 settlement price for PCI was $73/mt FOB Australia, $4/mt higher than the previous quarter, according to sources, while the spot price of Low Vol PCI was $72.15/mt FOB Australia on April 1.
The recent cuts in PCI output at loss-making mines, as well as greater diversion of PCI from steelmaking to the thermal coal market and high mining cash costs, have all helped underpin prices in the PCI market, industry sources have previously said.
According to Platts data, the last Foxleigh PCI spot trade was done in H2 2014, after which all volumes were sold on a term-basis, mostly to steel mills in Northeast Asia and Southeast Asia, according to sources.
Australia-based Taurus specializes in investment products based on the mined commodities industry. Its team of geologists, mining engineers, mining financiers, metallurgists and portfolio managers provide the skills and experience for successful investing, the company said on its website.
The mine, located approximately 12 km southeast of Middlemount in central Queensland, is part of the Capcoal complex which consists of the Grasstree longwall operation, the Aquila underground mine and the open-cut operation "CapFox," which includes three open-cut mines: Lake Lindsay, Foxleigh and Oak Park in the Bowen Basin, according to Anglo American's website.
The remaining 30% stake of Foxleigh mine is held by Mitsui Coal Holdings Australia.
Other than the Capcoal complex, Anglo American had announced in February the intended sale of its two other Australian met coal assets Moranbah North and Grovesnor, with total output of over 5 million mt.
