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Wesfarmers Sees Value in Coal Mines Amid Price Fall

Wesfarmers Ltd. (WES), the retail, industrial and mining company that’s Australia’s biggest private employer, sees value buying more coal mines after a 64 percent slump in high-grade coal prices drove down valuations.

Weakness in the coal market “provides an opportunity for us,” Richard Goyder, group managing director, told investors at a conference today in Sydney. “There may be further opportunities such as MDL-162,” he said, referring to a coal mine lease adjacent to one of the company’s existing pits that Wesfarmers bought from Peabody Energy Corp. in January.

Proposed takeovers in Australia’s mining sector have jumped since the start of April to their highest quarterly level since 2011, according to data compiled. Whitehaven Coal Ltd., Mount Gibson Iron Ltd., and Oz Minerals Ltd. are potential takeover targets as weak commodity prices weigh on valuations, James Wilson, an analyst at Morgan Stanley in Perth, wrote in a note to clients May 14.

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