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Straits sells coal assets to Thai interests for $486m

STRAITS Resources says it is well placed for acquisition opportunities after selling a stake in its coal assets to Thailand's PTT International Company for $US335 million ($A486 million).

The transaction will give PTT International a 28.26 per cent interest in Straits' Singapore-listed coal subsidiary, Straits Asia Resources, which operates two thermal coalmines in Indonesia.

The base and precious metals miner had been reviewing its 47.1 per cent holding in Straits Asia since receiving a number of unsolicited expressions of interest for the stake in late 2008.

Straits chief executive Milan Jerkovic said the part sale would provide the company with the funds to pursue potential acquisitions, particularly in precious metals, copper or bulk commodities.

"Straits will be well placed to look at attractive acquisitions at a low point in the cycle," he said.

"While we don't have anything specific in mind, copper and precious metals are probably the initial areas that we'll look at."

Mr Jerkovic added that the company was looking at other uses for the funds, including a distribution to shareholders and the repayment of debt facilities.

Straits operates the Whim Creek copper mine in Western Australia, the Tritton copper mine and Hillgrove antimony/gold mines in NSW, and the Mt Muro gold mine in Indonesia.

The PTT transaction will be completed by the Thai company buying a 60 per cent stake in Straits Bulk & Industrial Pty Ltd, the holding company of Straits' 47.1 per cent interest in Straits Asia.

The transaction will dilute Straits' interest in Straits Asia to 18.84 per cent.

Straits Asia operates the Sebuku and Jembayan thermal coal mines in Indonesia, which are expected to produce about 10 million tonnes in 2009, and holds an interest in a coking coal exploration concession in central Kalimantan.

The group also has coal projects in Brunei and Madagascar and is set to pick up the Yannarie Solar salt project in WA from Straits after the completion of a sales and purchase agreement.

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