04/06/2012 - 12:43

Approval to create biggest coal miner

04/06/2012 - 12:43

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The creation of Australia's largest listed pure-play coal company appears a certainty after Gloucester Coal's shareholders approved a merger deal with Chinese state-owned company Yancoal Australia.

The two companies agreed in December to a tie-up, which will bring together mines in NSW and Queensland.

Separately, Yancoal expanded into WA last year, paying $296 million to acquire Wesfarmers' subsidiary Premier Coal. Ownership of Premier will remain separate from the east coast assets.

Premier produces about 3.5 million tonnes of coal per year, compared with the 11mt produced at Yancoal's east coast mines,

Gloucester shareholders will receive $639 million, or $3.15 per share, as part of the deal to be taken over by the larger Yancoal.

A total of 99.98 per cent of Gloucester's voting shareholders voted in favour of the deal, the company said in a statement on Monday.

Treasurer Wayne Swan and the Australian Foreign Investment Review Board (FIRB) have approved the merger.

Chinese regulators are yet to approve the deal, but the process was progressing well, said Gloucester.

It is the biggest investment by a Chinese state-owned company in Australia's coal industry.

The merged group expects to grow production to 25-33mt a year by calendar 2016.

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