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Wednesday, 07 October 09
ESSAR, JINDAL IN TAKEOVER TUSSLE FOR AUSTRALIAN COAL MINER


Reuters reported that, Privately owned Essar Group has launched a surprise A$144.2 million ($128.1 million) bid for Australian coal minnow Rocklands Richfield Ltd, above an earlier offer from Jindal Steel & Power.

Essar on Sunday offered Rocklands A$0.50 per share, trumping a A$0.42 per share bid launched by Jindal in September, coke producer and coal explorer Rocklands said in a statement on Wednesday.

The takeover tussle comes as Indian steel mills ramp up their search for raw material overseas in a bid to feed voracious domestic demand for steel.

Australia is the world's largest coal exporter and has vast resources of quality coking coal, used in steel making.

Indian power companies have also in recent months expressed an interest in buying Australia's coal assets, as forecasts of India's huge growth in power consumption have also sparked concerns of a spike in coal prices over the next few years.

Perth-based Rocklands, which had previously agreed to Jindal's deal, said it would hold a board meeting to consider the merits of the competing proposals.

Shares in Rocklands, closed 17.14 percent higher at A$0.41, outperforming the broader Australian market that settled up 2.3 percent.

The current annual trade in seaborne coking coal is about 250 million tonnes, of which about 130 million tonnes comes from Australian mines operated by companies such as BHP Billiton, Xstrata Plc and Peabody Energy Corp. India consumes about 59 million tonnes.
Source: Reuters



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