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Xstrata Coal Announces Bid for Austral Coal Limited

Monday, September 17th, 2007

Xstrata Coal Pty Limited announce its intention to make an off-market takeover cash bid to acquire 100% of shares in Austral Coal Limited for A$1.83 per share, valuing Austral at approximately A$557M on a fully diluted basis (“Offer”).
Under Xstrata Coal’s proposal, Helios Australia Pty Limited (“Helios”), a subsidiary of Xstrata Coal, will offer to acquire all of the shares in Austral.
Xstrata Coal, Austral and Helios have signed a bid implementation agreement under which standard exclusivity arrangements have been agreed. The Offer is subject to limited conditions, including an 80% minimum acceptance condition and regulatory approval. The conditions are described in Appendix A.
The Offer is unanimously recommended by the Austral Board of Directors, (with Mr Robert Cameron abstaining), subject to the absence of a superior proposal and an independent expert concluding that the Offer is fair and reasonable for Austral shareholders. Austral has commissioned KPMG Corporate Finance as an independent expert.
Mr Cameron will excuse himself from consideration by the Company’s Board of the Helios Offer, due to his position as the Managing Director of Centennial Coal Company Limited, the Company’s 85.85% shareholder.
Peter Coates said, “Xstrata Coal’s offer to acquire 100% of Austral is fair and in the interests of shareholders.
“The acquisition of Austral’s Tahmoor underground mine will increase Xstrata Coal’s exposure to hard coking coal at a time of significant growth within the market. It will also facilitate the Company’s entry into the southern coalfields and allow immediate access to an unconstrained port.
“Xstrata Coal takes its responsibility for the communities which neighbour its operations seriously and we look forward to working with the Tahmoor community to achieve our longterm production, environmental and sustainability goals. Today’s announcement also demonstrates our continuing commitment to investment within NSW.”
Austral’s Tahmoor mine is an underground longwall hard coking coal operation in the southern coalfields of NSW, producing approximately 2.3Mt (ROM) in the last financial year. Tahmoor exports via Port Kembla, near Wollongong.
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