LONDON/SYDNEY, June 30 (Reuters) - The final group attempting to buy the Curragh coking coal mine in Australia from conglomerate Wesfarmers Ltd has dropped out, two sources familiar with the matter told Reuters on Friday.
U.S. private equity partners Apollo Global Management and Xcoal Energy & Resources ended their joint pursuit of the 8-million-tonnes-per-year coking coal mine four weeks ago after failing to reach a deal on price, the sources said.
Having expressed an interest in exiting the mining business, Wesfarmers hired UBS to explore a sale of Curragh and its 40 percent stake in the Bengalla thermal coal mine, following a coal price surge at the end of last year, the sources said.
Wesfarmers had told Reuters on April 27 that a “reduced number” of proposals were being assessed and the company was prepared to keep the mines if it was unable to get its price.
“This was a tough one from the start,” said one of the sources, who is part of a private equity group active in Australian mining acquisitions that did not bid for the mines.
“Wesfarmers was always going to be holding out for its price and was only a seller if it made a lot of sense.”
Wesfarmers, more known for its supermarket, hardware and retailing businesses, declined to comment.
Apollo and Xcoal Energy & Resources were not immediately available to comment.
The pair were bidding only for the Curragh mine and their offer was lower than $500 million, according to the sources. Wesfarmers wanted a total of roughly $1.5 billion for the two mines, the sources said.
Apollo and Pennsylvania coal exporter Xcoal, founded by Ernie Thrasher, a billionaire entrepreneur often dubbed the King of Coal, turned their attention to Curragh after Anglo American pulled two coking coal mines off the market, rethinking its plans to exit the coal sector.
The Curragh mine was running at a rolling production rate of 8.3 million tonnes of coking coal and 3.6 million tonnes of thermal coal, according to Wesfarmers’ last quarterly production report.
The Bengalla mine was yielding 3.3 million tonnes of thermal coal annually, it said. (Reporting by Clara Denina in London and James Regan in Sydney; Editing by Dale Hudson)