MSC to acquire stake in C. Kalimantan coal project

The world's largest tin smelter, Malaysia Smelting Corporation Bhd (MSC), has signed a share sale agreement (SSA) with Taurus Capital Incorporated for the proposed acquisition of a 30 percent stake in Asiatic Coal Pte Ltd for US$6.75 million, Bernama reported Tuesday.

Similarly, MSC's 42.7 percent associate company, Australia Oriental Minerals NL (AOM) has also proposed to acquire a 30 percent stake in Asiatic Coal for the same purchase consideration.

The purchase price was based on a valuation of US$15 per tonne of coal resources of 1.5 million tonnes for the entire interest in Asiatic Coal, MSC said in a statement to Bursa Malaysia.

Asiatic Coal via its 99 percent owned subsidiary in Indonesia, PT Asiatic Coal Nusantara, has secured the exclusive right to mine and market for coal on 4,005 hectares located in the central Kalimantan province.

MSC estimates that Asiatic Coal would require US$6.2 million to commence its coal mining operations to be financed via contributions from shareholders, in proportion to their shareholding in Asiatic Coal, upon completion of the SSA.

The proposed acquisition is expected to be completed in the third quarter this year.(*)