Blumont Group to acquire 15% stake in coal miner Resource Generation

MAINBOARD-listed Blumont Group will be investing about A$22 million in coal miner Resource Generation (RES) as part of efforts to diversify its business.

Blumont said on Monday that it will subscribe for new shares in the Australian Securities Exchange-listed firm for A$0.22 per share. The cash acquisition will be funded entirely with internal resources.

Following the acquisition, Blumont will hold a 15 per cent share in the company.

The proceeds will also be used to further develop RES' Boikarabelo coal mine in Waterberg, South Africa.

Blumont's executive chairman Neo Kim Hock said the move would give the firm a chance to be involved in one of the last few big-scale thermal coal projects outside China.

"With the acquisition of RES, we are strengthening our earlier entrance into the thermal coal space. We foresee that the Waterberg Boikarabelo coal mine will be the centrepiece in our global thermal strategy," he added.

Earlier in March, the firm acquired a 11.5 per cent stake in coal explorer Celsius Coal, which mines coking and thermal coal deposits in the Kyrgyz Republic.

Another Singapore-listed company Noble Group also holds a 12.85 per cent share in RES. Under the partnership, RES will supply coal to Noble for 35 years.

Blumont's shares closed one cent down at $1.96 today.