Billionaire's Coal Venture Expects Financing Within Six Months

  • MACH Energy agreed to buy Rio coal assets for $224 million
  • Coal will still be part of energy mix in Asia, MACH says

The Indonesian buyer of Rio Tinto Group’s discarded Mount Pleasant coal project in Australia is expecting to secure financing for the mine within six months and is on the look out for more opportunities for contrarian investments in the industry.

MACH Energy Australia Pty, owned by billionaire Anthoni Salim’s Droxford International Ltd., has already held talks with potential investors as it seeks financing from infrastructure and other groups, Managing Director Scott Winter said by phone from London, declining to say how much money the company is seeking. 

Salim Group “are fundamental believers in energy as a natural building block for economies and communities,” Winter said. “Coal still sits as a key part of the energy mix going forward as we transition into renewable energy.”

The Indonesian company is betting on growing coal consumption in Asia overcoming the current glut that’s pushed prices down for five years. Australia is forecast to overtake Indonesia and regain its position as the world’s largest coal exporter, according to the International Energy Agency.

Winter, who previously worked as general manager at Nathan Tinkler’s Tinkler Group, said he expects the Mount Pleasant thermal coal project in New South Wales to start production in late 2017. Rio’s agreement earlier this week to sell the coal assets to Perth-based MACH for $224 million is due to be completed in the second quarter.

“We have had discussions with various investors, and we’ve had very strong support,” Winter said. “It’s our priority over the next six months to finalize the project finance.”

Salim Group was drawn to Australia’s “higher-quality” coal that produces less pollution, Winter said. The Indonesian company controls First Pacific Co., a Hong Kong-based conglomerate with interests ranging from noodle maker PT Indofood Sukses Makmur to Philippine Long Distance Telephone Co. Salim has a net worth of about $4.3 billion, according to the Bloomberg Billionaires Index.

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