Coalspur Mines Ltd., developing the C$864 million ($870 million) Vista coal project in Canada, said it’s close to selling a 25 percent stake in the asset as it seeks funds to start production in three years.
“We’ve shortlisted, and we’ve gone through quite a large number of names, and we believe we’re only a few months away,” Eugene Wusaty, managing director of the Perth-based miner, said in a phone interview yesterday. Coalspur is trying to form a venture with some of the big Asian companies, he said.
The Vista coal project in Alberta province is slated to produce 11.2 million metric tons of power station coal from early 2015 as demand for the fuel is forecast to rise. Coal consumers in Japan, South Korea and China would be the logical offtake partners, Wusaty said.
Vista has access to an existing rail line and port, unlike many other coal development projects, Andrew Harrington, a Sydney-based resources analyst with Patersons Securities Ltd. who has a buy rating on the stock, said by phone. “The management team is solid with its focus on a single project.”
Coalspur expects to sign a final agreement with Canadian National Railway Co. to ship Vista’s coal this year, after an initial pact in November, the company said in a Feb. 29 presentation. It has secured a total of 8.5 million tons of export capacity at the Ridley Terminals.
China’s thermal coal imports may rise to 1 billion tons by 2030 from 175 million tons last year as growth spurs demand for power, Wood Mackenzie, the Edinburgh, U.K.-based consultancy, said in a March 14 report. Long-term export prices are set to stay high, even with supply growth, because of rail and port bottlenecks, rising production costs and regulations such as Australia’s carbon tax, according to the report.
The coal resource at the Vista project increased by 87.2 million tons to 1.29 billion tons, Coalspur, listed in Australia and Canada, said June 14.
Coalspur gained 3.8 percent to A$1.51 at the close in Sydney yesterday. The shares have fallen 16 percent over the past year, compared with an 8.1 percent drop in the benchmark S&P/ASX 200 Index.