Banpu plc, Thailand’s largest coal miner, has made a AU$ 423 million bid for Hunnu Coal Ltd. The Australian coal explorer has several projects in Mongolia, which has attracted intense interest and competition in the last year due to its enormous reserves and close proximity to the energy-hungry China and India.
Hunnu Coal operates the Tsant Uul metallurgical coal project in Mongolia and has stakes in several others, including Altai Nuurs and Unst Khudag.
Banpu is expanding across the Asia-Pacific region, having acquired Australia’s Centennial Coal for AU$ 2 billion in 2010. It already owns 12.4% of Hunnu Coal and is looking to take full ownership.
Hunnu Coal’s board of directors has “unanimously recommended” that the company’s shareholders accept Banpu’s offer.
Hunnu Coal has announced the results of coal quality analyses performed on samples taken from the due diligence drill cores at the Tsant Uul coking coal project. Initial test results demonstrate similarities to coals at the giant Tavan Tolgoi field.
Close to China and its huge demand for natural resources, Mongolia has vast untapped resources that are ripe for exploitation, including huge coal deposits. Hunnu Coal aims to help develop these resources and has recently acquired a 60% interest in the Buyan coal project, in the giant Tavan Tolgoi coking coal field in the Umnugobi Province of Mongolia.