Xstrata Coal has agreed to acquire the Sukunka hard coking coal deposit in Canada from Talisman Energy for total consideration of $500m in cash.
Sukunka is located in the Peace River Coalfield of northern British Columbia, contiguous with First Coal Corp and Lossan tenements purchased by Xstrata Coal in August and October 2011 respectively.
Xstrata Coal chief executive Peter Freyberg said: "Based on our due diligence and technical analysis, Sukunka has the potential to be a high quality metallurgical coal mine.
"Once developed, Sukunka would meaningfully increase our exposure to hard coking coal, while unlocking synergies with our neighbouring assets in the Peace River coalfield and providing additional regional scale," said Freyberg.
The company said that Sukunka has 236 million tonnes of coal in the measured and indicated categories.
A pre-feasibility study for a long wall mine producing hard coking coal has been completed by Norwest Corporation.