Eurasian Natural Resources Corporation Plc (ENRC) today said that it will buy the 75 per cent it does not already own in Kazakh coal producer Shubarkol Komir JSC, for $600 million.
ENRC, a large diversified natural resources group with its main production assets located in Kazakhstan, said that its directors have approved to exercise the company's rights under a call option to acquire the 2,638,103 outstanding shares of Shubarkol from current owner Eurasian Industrial Company JSC, for up to $600 million, plus assumed debt of $50 million, valuing the coal miner at $850 million.
ENRC is planning to buy through a tender offer, all the outstanding preference shares of Shubarkol for up to $12.6 million or about $106 per preference share.
London-based ENRC said that it will use the coal purchased from Shubarkol to lower its own fuel costs and export any excess coal as well as sell in the domestic market.
Formed through 2002 merger of Shubarkol Razrez and Shuborkol Loading and Transport Management, Shubarkol Komir is Kazakhstan's largest coal company having produced 6 million tonnes of coal last year, accounting for 5.4 per cent of Kazakhstan's total coal production.
As of 1 January 2011, Shubarkol held 326.2 million tonnes of thermal coal reserves, it also produces semi coke, and sold around 161,000 tonnes last year.