Australia’s Linc Energy has begun early talks to acquire Gregory Crinum coking coal complex in Queensland, which is jointly owned by BHP Billiton and Mitsubishi.
The talks are considered to be part of BHP’s plans to cut down production costs and close unprofitable assets, the Wall Street Journal reported.
In the backdrop of falling coal prices, high mining costs and a strong Australian dollar, BHP Billiton Mitsubishi Alliance (BMA), suspended operations at the mine in October 2012.
Responding to the market speculation, Linc Energy reiterated in a statement that it has not made any binding offer or reached any agreement with any entity in relation to a deal.
Linc Energy CEO Peter Bond said that the company is currently focused on developing its core business of oil production and the commercialisation of UCG on a global scale.
"As such, Linc Energy is committed to divesting its coal division, and is actively pursuing a course to achieve this," Bond added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Low coal prices and surging production costs have prompteed several mining companies in the region to undertake cost-saving programmes.
Earlier this month, Anglo American announced that it would suspend operations at the Aquila mine in Queensland’s Bowen Basin.
Mining major Rio Tinto is also looking for a buyer for stakes in several Australian coal mines.
Image: The Gregory open-cut mine was shut down in October 2012.