Glencore rescues troubled KPC mining contractor

Financially troubled Australian mining contractor Henry walker Eltin announced on Thursday it was in A$100 million re-capitalization deal with Swiss privately held miner-trader Glencore AG.

Under the deal, Glencore will buy $60 million of HWE?s five-year convertible preference shares and underwrite $40 million rights issue. The new capital will be used to pay HWE?s financial obligations as well as for working capital.

A report said that HWE has $50 million in bank debt, A$57 million in performance bonds and derivative exposure of A$17 million. It also has around A$170 million in U.S. private placement bonds. The report said that without fresh fund injection, the company would be put into administration.

HWE is a mining contractor for East Kalimantan miner PT. Kaltim Prima Coal, a subsidiary of coalmining house PT. Bumi Resources. HWE won a US$1.2 billion contract to mine KPC?s Bnegalon mine, with production expected to commence April next year.

Glencore is holding monopoly to sell KPC?s coal production except top Japan. (alex)