Straits, PTT reach financial closure on coal alliance

ASX-listed mining firm Straits Resources Limited (SRL) announced on Tuesday financial close of its strategic co-investment alliance with the PTT Group of Companies (PTT) via the sale of a 60% interest in SRL s wholly owned subsidiary, Straits Bulk & Industrial (SBI), for up to US$335 million.

SBI is the holding company for SRL?s Brunei coal exploration interests, Madagascar coal exploration interests and for SRL?s 47.1 percent shareholding in the SGX listed Indonesian coal company, Straits Asia Resources Limited (SAR).

SRL has received the upfront cash completion payment of US$220 million from PTT. The remaining performance payment of up to US$115 million relates to certain matters in connection with reserve upgrades in relation to the mine located on Sebuku Island, South Kalimantan, controlled and operated by SAR or as otherwise agreed between PTT and SRL, the company said.

The performance payment is expected to be realized during 2009.

SAR is expected to produce 9.-9.5 million tonnes of coal this year from its mines in South Kalimantan and East Kalimantan. (denny)