DIVERSIFIED energy company Linc Energy has announced its successful acquisition of Rio Tinto’s dormant Blair Athol coal mine in Queensland’s Bowen Basin, just days after the company declared it would quit the ASX in favour of Singapore’s oil and gas specialities on the SGX.
The junior – with interests across oil, gas and coal – reportedly plans to resuscitate the formerly lucrative mine site, creating up to 100 new jobs for the central Queensland area in the process. Rio Tinto officially closed its Blair Athol operations in November 2012, after describing the 29 year old site as “largely mined out”. The site had since entered into care and maintenance rehabilitation. According to The Australian, Linc Energy – via its subsidiary New Emerald Coal – would restart mining operations at the site within six months.
In a statement to the ASX, Linc said the acquisition had not incurred any upfront payments, including mining tenure, on-site assets or infrastructure.
Linc Energy chief executive Peter Bond said he was pleased with New Emerald’s new asset, which he expected would produce sound figures of up to 3 million tonnes of coal per annum across a 10 year mine life.
“We’ve done a very good deal,” Mr Bond said.
“It is an iconic asset, probably one of the most profitable mines Rio owned for many years.”
Mr Bond stated that Linc’s junior size in comparison in Rio Tinto would work in its favour to create a new and successful mining operation, allowing it to succeed where Rio could not.
“The cost base of a big company is very different to a smaller operation,” he said. “Rio could not run [Blair Athol] at a profit; [however] we have up to 10 years of coal available if we’re clever.
“[Rio] shut it for several reasons; but they have effectively left it on care and maintenance, so all the equipment is still there and ready to go.”
Mr Bond said de-listing from the ASX in favour of Singapore’s SGX would help broaden Linc’s shareholder base and improve access to international investors – particularly due to the SGX’s affinity for oil and gas.
“We will be well-positioned to capitalise on Singapore’s strategy to become one of the world’s top three major oil and gas trading hubs,” Mr Bond said.
“The company believes that listing on the SGX will help to unlock the value of Linc Energy’s conventional and unconventional oil, gas and coal assets and its underground coal gasification technology, to provide benefits for all shareholders.”
Investors appeared mixed on Linc’s relocation and its new asset, as reflected in Linc’s subsequently erratic trade; Mr Bond stated that the company would push to move to the SGX before the end of 2013.