Glencore and Sumitomo purchase majority stake in Australia's Clermont mine
Two of the largest mining firms, Glencore Xstrata Plc and Sumitomo Corp would be paying USD1.02 billion for a share in the third largest thermal coal mine in Australia. This investment comes as demand from power producers for energy sources climb to meet overall demand for electricity.
The said payment would be for 50.1% of the Clermont mine located in the Australian state of Queensland. The previous owners, Rio Tinto Group was included in the confirmation made by the Japanese mining firm. Glencore and Sumitomo would each own 25.06% with the former managing the asset and then marketing the extracted product.
The deal would allow for the stability of both supplies and prices for the Japanese market as well as the rest of Asia. This was confirmed by the Sumitomo statement on the acquisition of the shareholdings. This comes as coal prices rebound from the most dismal month in the past four years. As Chinese and Asian demand increases, especially to fuel industries in their respective countries, the firms expect a fruitful investment in the long run.