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M&A update: EMEA coal mining – April 2014

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World Coal,

M&A intelligence and news service, Mergemarket, rounds up pending and rumoured deals in the EMEA coal mining sector over the past month.

BHP Billiton

UK mining company X2 Resources is thought to have tabled a bid for BHP Billiton's thermal coal business, The Sunday Times reported, citing industry sources. The sources said X2 boss, Mick Davis, may succeed in buying some "lower-tier" assets, but thought he is unlikely to be able to acquire all of BHP's disposal candidates. The item also reported that Davis is also thinking about buying BHP's nickel, manganese and aluminium assets, which the Australian miner has deemed non-core.


The Russian investors, which own the controlling stake in Ukrainian industrial group Industrial Union of Donbass (ISD), may receive a US$1.8 billion loan from VEB for the purchase of Russian coal group Sibuglemet, Kommersant reported, citing sources familiar with the situation. In 2012, Sibuglemet posted revenue of RUB32.57 billion (US$910.7 million) and a net profit of RUB1 billion, according to the report.

Prairie Downs Metals

Prairie Downs Metals, an Australian coal miner focused on Poland, is interested in a dual listing on a European stock exchange, Mergemarket reports, citing CEO Benjamin Stoikovich. Warsaw Stock Exchange and London Stock Exchange are the two most realistic options for the company.


The Russian government is seeking a Chinese investor to partner with listed Russian coal producer, Mechel, in developing the Elginsk coal deposit, RBK Daily reported, citing Deputy Prime Minister Arkady Dvorkovich. The report noted that Mechel is seeking to sell a 25% stake in Elgaugol, its subsidiary that handles the development of Elginsk for US$1 billion.

UC Rusal

Russian aluminium producer UC Rusal is preparing a sale of non-core assets, according to Vedomosti. The most likely assets for sale are UC Rusal's foreign enterprises, according to a Deutsche Bank analyst cited by the newspaper. UC Rusal may sell its Nigerian asset Alscon, the daily noted, citing a source close to shareholders. UC Rusal paid US$250 million for Alscon in 2007. The company's non-core asset in Kazakhstan – a 50% stake in coal company Bogatyr - may be also sold, though UC Rusal has not yet shown any intention to sell it, the newspaper added, quoting a Societe Generale analyst.

Note: The list does not take into account deals that may have been completed but not yet made public.

Written by Mergemarket.

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